Skip to main content
// //

Bank of Canada Governor Stephen Poloz said the Canadian economy is thriving – with low unemployment and companies looking to hire – even as several factors will continue to keep global growth subdued and interest rates near historically low levels for some time to come.

Canada’s central bank governor indicated he is not overly concerned by last Friday’s jobs report, which showed the economy shed about 71,000 positions in November, as he cautioned that monthly numbers are volatile and chief executives tell him their main concern is labour shortages.

Mr. Poloz made the remarks in Toronto after a speech Thursday to the Empire Club of Canada. While the speech focused on the longer term, the governor addressed the jobs report, which revealed November was the worst month for job losses in over a decade.

Story continues below advertisement

“We don’t normally put a lot of weight on individual data points, especially in the labour market report, which is a very volatile report. Nor did we put a lot of weight on the extraordinarily strong numbers that we received earlier in the year,” Mr. Poloz told reporters. “So, you tend to see through these things and watch the trend and the trend has been quite a positive one for the labour market.”

Mr. Poloz said monthly job numbers can be a lagging indicator, meaning they are not necessarily a precursor of what’s to come.

Friday’s job numbers also showed that employment in Canada is up by 293,000 jobs – or 1.6 per cent – compared with November, 2018. The labour figures were released two days after the Bank of Canada decided to keep interest rates unchanged, maintaining its key rate at 1.75 per cent.

The governor noted that this week’s announcement by Canada, Mexico and the United States that they will move to ratify an updated North American free-trade agreement should encourage more investment in Canada that might have been sitting on the sidelines.

“There’s no question that the uncertainty around the future of NAFTA began to bite almost immediately after [U.S.] President [Donald] Trump came to office," Mr. Poloz said. “We should wait and see it before we assume it, but my presumption is that the ratification of [the agreement] … will make a positive difference to investment sentiment in Canada."

In his speech – titled Seeing The Big Picture With 2020 Vision – Mr. Poloz said several factors are holding back the global economy, including slowing population growth, subdued productivity gains, trade conflicts and the emergence of nationalist or populist policies around the world.

“It looks like the global economy is set for continued slow economic growth and this is for mostly structural reasons,” he said. “For these same reasons, this means that the low interest rates we see are likely to persist also.”

Story continues below advertisement

Thursday’s speech, as well as a related research paper authored by Mr. Poloz, touched on the global economy, the bank’s consultation plans ahead of the 2021 decision on renewing its five-year inflation-targeting agreement with the government, and the impact of technological change and efforts to ensure it is being properly measured.

He also stated that for the Canadian economy, household indebtedness is the most important financial vulnerability.

The governor wrapped up his speech by highlighting the bank’s most pressing concerns, while placing them in a more upbeat context.

“We can see the broad forces of low interest rates, rising debt [and] technological change working in combination to bring stress to households, companies and governments,” he said. “That sounds challenging, and I will not pretend otherwise ... Yet here we are in a thriving modern economy.”

Mr. Poloz noted that over the past decade, Canadians have dealt with the global financial crisis, the collapse of oil prices and “political uncertainty abroad.”

“Despite all of that, Canada’s economy, today, is operating very close to its capacity, inflation is on target, labour force participation is up across almost all age groups, and the jobless rate is near historic lows,” he said.

Story continues below advertisement

Mr. Poloz also announced last week that he will step down as governor in June when his seven-year term expires.

“This is my dream job. It’s been wonderful," he said Thursday. "I feel very proud of the team that I’ve worked with and what we’ve been able to accomplish together, but for me, I think it’s about time to do something else.”

Your time is valuable. Have the Top Business Headlines newsletter conveniently delivered to your inbox in the morning or evening. Sign up today.

Report an error Editorial code of conduct
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

Comments that violate our community guidelines will be removed.

Read our community guidelines here

Discussion loading ...

To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies