Canada Urged by Central Bank Governor to Lower Trade Barriers in Light of Supply Chain Risks

Bank of Canada governor Tiff Macklem emphasizes the importance of Canada seizing opportunities to solidify its position in the evolving global trade landscape.

Speaking at the Canada-UK Chamber of Commerce in London, Macklem highlighted the ongoing rewiring, recasting, and redirection of international trade.

“To influence the reshaping and redirection of trade, we must be proactive on the global stage,” Macklem stated in his prepared remarks.

He emphasized the need for Canada to invest in trade infrastructure, reduce trade barriers, and adapt to shifting supply chains that present both risks and opportunities for Canadian businesses.

Macklem stressed the importance of investing in electricity grids, transportation infrastructure, and fostering innovation in order for businesses to stay competitive.

With global trade shifting from goods to services and China’s changing role, Macklem acknowledged the slowdown in global trade growth.

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“To compete globally, we must strengthen relationships, produce in-demand products, enhance infrastructure, and increase productivity,” Macklem added.

Macklem acknowledged that while the Bank of Canada does not dictate trade policy, understanding these shifts is crucial due to their impact on costs and inflation.

He warned, “With the slowdown in globalization, the reductions in global goods costs may not be as significant, potentially leading to inflationary pressures.”

This address by the governor follows the recent decision by the central bank to lower its key interest rate target by a quarter point to 4.25 percent.