Skip to main content
The Globe and Mail
Support Quality Journalism.
The Globe and Mail
First Access to Latest
Investment News
Collection of curated
e-books and guides
Inform your decisions via
Globe Investor Tools
per week
for first 24 weeks

Enjoy unlimited digital access
Cancel Anytime
Enjoy Unlimited Digital Access
Get full access to
Just $1.99per week for the first 24weeks
Just $1.99per week for the first 24weeks
var select={root:".js-sub-pencil",control:".js-sub-pencil-control",open:"o-sub-pencil--open",closed:"o-sub-pencil--closed"},dom={},allowExpand=!0;function pencilInit(o){var e=arguments.length>1&&void 0!==arguments[1]&&arguments[1];select.root=o,dom.root=document.querySelector(select.root),dom.root&&(dom.control=document.querySelector(select.control),dom.control.addEventListener("click",onToggleClicked),setPanelState(e),window.addEventListener("scroll",onWindowScroll),dom.root.removeAttribute("hidden"))}function isPanelOpen(){return dom.root.classList.contains(}function setPanelState(o){dom.root.classList[o?"add":"remove"](,dom.root.classList[o?"remove":"add"](select.closed),dom.control.setAttribute("aria-expanded",o)}function onToggleClicked(){var l=!isPanelOpen();setPanelState(l)}function onWindowScroll(){window.requestAnimationFrame(function() {var l=isPanelOpen(),n=0===(document.body.scrollTop||document.documentElement.scrollTop);n||l||!allowExpand?n&&l&&(allowExpand=!0,setPanelState(!1)):(allowExpand=!1,setPanelState(!0))});}pencilInit(".js-sub-pencil",!1); // via darwin-bg var slideIndex = 0; carousel(); function carousel() { var i; var x = document.getElementsByClassName("subs_valueprop"); for (i = 0; i < x.length; i++) { x[i].style.display = "none"; } slideIndex++; if (slideIndex> x.length) { slideIndex = 1; } x[slideIndex - 1].style.display = "block"; setTimeout(carousel, 2500); } //

Bank of Canada Governor Tiff Macklem speaks during a news conference in Ottawa, on Oct. 28, 2020.

Sean Kilpatrick/The Canadian Press

Bank of Canada Governor Tiff Macklem said the central bank remains focused on an inclusive economic recovery that brings women, youth and racialized Canadians back into the work force, even as it begins to tighten its monetary policy.

“We are in the sharpest and most unequal economic cycle in our lifetime,” Mr. Macklem said in a virtual speech to a group of universities in Atlantic Canada on Thursday, noting that low-wage workers have borne the brunt of job losses throughout the pandemic.

“We won’t fully heal the economy until we address these unequal impacts. And rather than just trying to recover to where we were before the pandemic, maybe we can bring the economy to a better place for everyone,” Mr. Macklem said.

Story continues below advertisement

This has been a recurring theme for Mr. Macklem; his last major speech, in February, also focused on the unequal impact the pandemic has had on the labour market.

At the same time, the bank has taken the most aggressive approach among global central banks in beginning to wind down the extraordinary monetary stimulus launched last spring. Three weeks ago, the bank cut its weekly federal government bond purchases by 25 per cent and pulled forward its timeline for a potential interest-rate hike.

Mr. Macklem also acknowledged that some of the bank’s own actions over the past year – cutting rates and buying Government of Canada bonds, also known as quantitative easing – may be fuelling inequality. The main goal of quantitative easing is to reduce borrowing costs, which stimulates demand and encourages job creation, Mr. Macklem said. But QE also boosts asset prices.

“That benefits Canadians’ RRSPs, their pension plans. But wealth isn’t distributed equally in society, so it can benefit wealthy Canadians more than other Canadians,” he said in a news conference after the speech.

The speech comes on the heels of the April jobs report from Statistics Canada that showed the labour-market recovery stalling amid renewed lockdown measures. Employment fell by 207,000 jobs last month, and the unemployment rate rose 0.6 per cent to 8.1 per cent.

In the news conference, Mr. Macklem said the bank’s outlook for inflation remains largely unchanged from its April projections, despite stronger-than-expected U.S. inflation numbers, published Wednesday. The U.S. consumer price index rose 4.2 per cent in April, compared with the previous year, while core inflation – which excludes volatile elements such as food and gasoline – was up 3 per cent. Much of this increase was the result of year-over-year comparisons with low prices early on in the pandemic.

“Large parts of our economy remain very weak. There are far too many Canadians unemployed, and that is putting downward pressure on inflation. And so yes, we expect [CPI inflation] to go up to around 3 per cent [in the coming months] and then diminish thereafter,” Mr. Macklem said.

Story continues below advertisement

Mr. Macklem’s challenge right now is balancing inflation pressure – which is coming from large amounts of fiscal stimulus, pent-up consumer savings and supply chain bottlenecks – with his goal of achieving an inclusive economic recovery. In an effort to do this, Mr. Macklem and his team are looking at a broader set of labour-market indicators than just the aggregate unemployment to determine what “full employment” looks like.

“This pandemic has had very unequal effects on Canadians. It has particularly affected low-income workers, women, racialized Canadians, new immigrants, youth. So we can’t just look at the macro aggregates. We’ve got to look under the hood, we’ve got to look at things on a more disaggregated level,” he said.

In this, the bank appears to be in line with the U.S. Federal Reserve, which has redefined its idea of full employment to take into account segments of the population that tend to rejoin the labour force later in an economic recovery.

In the news conference after the speech, Mr. Macklem was asked whether the next senior deputy governor would be a woman. The position has been empty since Carolyn Wilkins’s departure in December. All five members of the current governing council are white men.

Mr. Macklem said he could not comment on the recruitment process, but he did say that “moving forward, I think it will be important for the governing council to become more representative of the diversity of Canadians.”

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

Your Globe

Build your personal news feed

  1. Follow topics and authors relevant to your reading interests.
  2. Check your Following feed daily, and never miss an article. Access your Following feed from your account menu at the top right corner of every page.

Follow the author of this article:

Follow topics related to this article:

View more suggestions in Following Read more about following topics and authors
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 If you want to write a letter to the editor, please forward to

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 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 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

If you do not see your comment posted immediately, it is being reviewed by the moderation team and may appear shortly, generally within an hour.

We aim to have all comments reviewed in a timely manner.

Comments that violate our community guidelines will not be posted.

UPDATED: 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