We did an extended survey of Canadians leading up to the renewal of our inflation-control mandate. When we talk directly to Canadians, one of the things we hear from them—particularly from Canadians who are saving for retirement—is that very low interest rates make it hard for them to save.
One thing that was interesting when we surveyed Canadians was that Canadians care about themselves, but they also care about other Canadians. They weren't very enthusiastic about having negative interest rates, like those that have been implemented in other countries. They also don't like really high interest rates. Part of that reflects the notion that if you want to save, having higher interest rates makes that easier.
Overall, households' balance sheets have actually performed quite well through this pandemic. In fact, household savings are quite a bit higher. A lot of that has to do with people not being able to buy a lot of things. They haven't been able to travel. They haven't been able to go to restaurants. They've been buying more goods, but they haven't substituted one for one, so their savings have gone up.
The balance sheets of Canadians on average are actually in better shape. With interest rates higher, when they save, yes, they will get some more return on that.
Higher interest rates basically encourage less spending and more savings. That's how monetary policy works to moderate spending.