Evidence of meeting #12 for Finance in the 45th Parliament, 1st session. (The original version is on Parliament’s site, as are the minutes.) The winning word was economy.
A video is available from Parliament.
Liberal
Kent MacDonald Liberal Cardigan, PE
Okay.
I think our government identifies that if the housing supply is increased, housing costs will come down in the long term.
Liberal
The Chair Liberal Karina Gould
Thank you very much, Mr. MacDonald.
Mr. Martel and Mr. Chambers will share the floor for five minutes.
November 5th, 2025 / 5:40 p.m.
Conservative
Richard Martel Conservative Chicoutimi—Le Fjord, QC
Thank you, Madam Chair.
It's interesting. Canada's national debt is important, but what concerns me is wealth creation. I'm concerned about the possibility of foreign investors no longer coming to Canada.
You said that we need to improve infrastructure so that we have better transportation corridors from west to east and better port infrastructure.
Earlier, you said that foreign investors had to come to Canada. That said, how can we attract them without touching the regulations? Investors always complain that it takes too long here. That's why they go elsewhere.
Governor, Bank of Canada
I agree. That's a factor that I've often heard myself in talking to foreign investors.
Yes, Canada's provincial and federal regulatory system has a reputation for being complicated and a source of great uncertainty. If we want more foreign investment—and I think we do—it's a crucial factor that we need to improve.
Conservative
Richard Martel Conservative Chicoutimi—Le Fjord, QC
Even if the federal government and the provinces harmonized their regulations, would it be possible to attract investment without touching the regulations? I'm thinking, for example, of licensing.
Governor, Bank of Canada
I think it's an important question.
The regulations are there for good reasons. However, could we remove certain regulatory provisions that no longer meet a need? Could we speed up the regulatory review processes?
Conservative
Governor, Bank of Canada
These are questions we need to ask ourselves in order to attract investment.
Conservative
Richard Martel Conservative Chicoutimi—Le Fjord, QC
Everyone says that breaking down interprovincial barriers would help Canada's economy. However, that would take the will of the government.
There's no sign that provincial ministers will ever agree on uniform regulations for interprovincial trade, because leadership is needed. How will we be able to do that? We're limited. If the money doesn't come in, how are we going to get through this? There's no light at the end of the tunnel.
Governor, Bank of Canada
Over the past few months, we've seen a lot of interaction between the provinces regarding regulatory differences and trade barriers between the provinces. There are a number of memoranda of understanding between the provinces, and that's good news.
However, frankly, if the goal is to reduce costs for businesses, it's important that the provinces take a more comprehensive approach. With all the different memoranda of understanding between various provinces, businesses will have to work just to figure out what they can and can't do.
So they have made some progress, but there's more work to do. I worry about them reporting that they have worked everything out before they actually have. I hope they will keep going.
Conservative
Richard Martel Conservative Chicoutimi—Le Fjord, QC
I forgot to say that I wanted to share my time with Mr. Chambers. I'm sorry.
Conservative
Adam Chambers Conservative Simcoe North, ON
Thank you very much.
Perhaps I can take you back to my question about a lot of debt being borrowed. If the Canadian government runs into issues—for example, yields spike up or there's a problem with funding—would you consider using quantitative easing as a tool again?
Governor, Bank of Canada
Quantitative easing is not a tool that you would use for something like that. Quantitative easing is a tool that, first of all, you would only use in extremely....
We've only used it once in the history the country, as you well know, during a 100-year pandemic. It's really something that you would use when you have interest rates at zero and you feel that you need a lot more monetary—
Conservative
Adam Chambers Conservative Simcoe North, ON
If you were trying to keep interest rates down though, if there was an issue with funding and interest rates were going up...?
Conservative
Adam Chambers Conservative Simcoe North, ON
I'm very glad to hear that you're very reticent to use quantitative easing—
Conservative
Liberal
Carlos Leitão Liberal Marc-Aurèle-Fortin, QC
Let's go back to inflation. It is the mandate of the Bank of Canada to keep prices low, stable and predictable. I think the Bank of Canada has done an excellent job. Inflation has come down from 8% or 9% at some point.
In fact, if I'm not mistaken, maybe you could confirm this: The Bank of Canada was one of the first in the G7 to bring inflation back within range—because this was a worldwide phenomenon, actually—before other central banks.
Governor, Bank of Canada
Yes, inflation peaked at 8.1%. We were among the most aggressive in raising interest rates. In fact, we raised interest rates the fastest in the Bank of Canada's history, and it worked. Look, it didn't work without some pain. Certainly, higher borrowing costs restrained spending, but frankly that was what the economy needed. The economy was overheated. We did bring down inflation relatively quickly. Importantly, while we slowed the economy, we didn't cause a recession. We didn't cause a big increase in the unemployment rate.
This time last year, I have to say, we were feeling pretty good. Inflation was back to 2%. We were lowering interest rates. The unemployment rate was starting to fall. Unfortunately, at the beginning of this year, a whole new threat developed.