Finance Committee on May 4th, 2026

[The Chair, Liberal, Karina Gould]

Thank you, Mr. Macklem.

[Tiff Macklem]

—particularly for lower-income Canadians, it's a big part of their basket.

[The Chair, Liberal, Karina Gould]

We're going to have to leave it there.

We'll continue now with Mr. Leitão.

[Carlos Leitão, Liberal, Marc-Aurèle-Fortin, QC]

Thank you. I don't have any questions.

Briefly, I want to thank you and to note that the bank has appointed two new deputy governors, which I think will make a difference.

On top of that, they're both francophone. I believe Nicolas Vincent and Marc André Gosselin will be an excellent addition to the Bank of Canada. I would therefore like to commend and say kudos to the bank. That is all I had to say, and I just wanted to put that on record.

The floor is back to you, Madam Chair.

[The Chair, Liberal, Karina Gould]

Thank you, Mr. Leitão.

My colleagues have kindly let me take some time to ask questions, so I will do that.

I also want to begin with gratitude. In your opening remarks and throughout this conversation, you've spoken about the many challenges that our country is facing that are, quite simply, beyond our control. I recognize that for many people in leadership positions right now, we're facing a lot of challenges, and so I thank you for the work you're doing to try to balance them for Canadians.

I want to expand a little bit on the question by my colleague, Mr. Turnbull. Mr. McLean and I were actually at the IMF and the World Bank a couple of weeks ago for their spring meetings, and one of the things they talked about that is really important right now—and you mentioned it—is for governments to respond with short-term and targeted measures, as opposed to long-term structural changes. I'm wondering why this, from the bank's perspective, is important and how this impacts the decisions you might be making when it comes to interest rates.

[Tiff Macklem]

I think prices send important signals in your economy, and you want people to invest and to take decisions. You want to let the price system work. There are situations where, on a temporary basis, governments need to intervene to relieve extreme hardship, but these measures can be very expensive for governments and can destroy the economy. From a fiscal perspective, the cost simply may not be worth the benefit. Ultimately, they're not going to promote the efficiency and strong functioning you need for your economy.

Yes, the IMF's advice is that when you're in a moment of intense pressure, governments may need to step in; but generally, markets are sending signals and you don't want to short-circuit those.

[The Chair, Liberal, Karina Gould]

Please go ahead.

[Carolyn Rogers]

It comes back to questions Mr. Kelly and Mr. Hallan were asking too. What we're facing right now doesn't affect every part of the economy the same. As the governor said, for people in low-income brackets, the price of food and the price of transportation—if you're commuting to work—are really difficult or impossible to avoid. There aren't substitutes for them.

If you support people in those situations, you are not necessarily stoking demand, whereas if you have a broad measure, you are short-circuiting the price signals. Those types of targeted measures that help people in those categories—people who are putting groceries on their credit card—are really important.

[The Chair, Liberal, Karina Gould]

Thank you very much for that.

Briefly in my last minute here, I want to touch on two things you've mentioned throughout the meeting today, particularly some of the strengths that we have in Canada right now. We talked about energy and fertilizer particularly. We don't know how long the conflict in Iran is going to carry on and the impact it's going to have. I'm wondering if you can just touch on why that's important for us in Canada in this moment and then also on some of the regional differences that we're experiencing.

Here, I'd mention that one of your other considerations is the review of CUSMA. I come from southern Ontario. I can see steel mills to the west and the Ford auto plant to the east. When it comes to how tariffs are impacting my region, it's very different from other regions. I'm just wondering if you can talk a little bit about how the regional differences impact your thinking and what Canada's strengths are.

Actually, I'm sorry, your time is up.

[Voices]

Oh, oh!

[The Chair, Liberal, Karina Gould]

I spoke too long. Maybe I'll talk to you afterwards. I don't usually get to ask questions.

I will allow Monsieur Garon to conclude for two and a half minutes.

[Jean-Denis Garon, Bloc, Mirabel, QC]

Thank you, Madam Chair.

Mr. Macklem, I'd like us to talk about competition. We know that there is a lack of competition in some sectors in Canada. This committee and the Standing Committee on Agriculture and Agri-Food have released some reports on that.

For instance, we often suspect that a reduction in the number of grocery companies, supermarkets and so forth could play a part in food prices.

When prices of inputs, such as oil go up, at some point, which could be in the medium term, businesses will end up passing on these increases to consumers. I'd like to know whether its easier for a business to pass on the higher costs of inputs to consumers if there's less competition. Ultimately, if we had more competition and less market power in some sectors in Canada, would that make the work of the Bank of Canada to control inflation easier? I'd also like to know what the most problematic markets are.

[Tiff Macklem]

Competition can really affect prices. Competition is probably not very cyclical and so it's not clear that it will have a big impact on changes in prices, but nevertheless, it's possible. I think the most important thing is that it affects our productivity and our revenues.

Getting back to the issue of affordability, more competition means more revenue, and that will make things more affordable. We have seen that Canadian sectors that have strong exports invest more and are more productive. They probably face more international competition compared to companies with a solely domestic market.

My answer is therefore yes, I think there's that aspect of competition.

[Jean-Denis Garon, Bloc, Mirabel, QC]

Okay.

I have 30 seconds left and you can use them to answer the Chair's question if you wish.

[Tiff Macklem]

On the regional aspects and our strengths, I'm probably going to run out of time, so let me focus on a positive note. Let's talk about a few strengths.

We talked about some of them. I think we have a very well-educated labour force in this country. We have among the highest rates of post-secondary education in the world. That is a real strength of the country.

The other thing I would say is that international investors are looking to diversify their investments. A lot of money has been flowing into the United States. International investors are looking to diversify. Canada looks pretty good, when they're looking at us with the rule of law, a well-diversified economy, natural resources, a solid manufacturing sector and a vibrant services sector.

One thing we haven't talked about is that when we travel and hear from international investors, we hear that the length of time for regulatory approvals is long. That can be a barrier to international investment. These regulatory approvals are there for good reasons; they're well-intended. Nonetheless, where we can streamline them and make them more predictable, I think we could benefit more from our relatively good international standing in terms of international investment.

[The Chair, Liberal, Karina Gould]

That's great.

Thank you very much, Mr. Macklem.

Mr. Garon, thank you for sharing the rest of your time. I really appreciate your gesture.

On behalf of the committee, I would like to thank Governor Macklem and Senior Deputy Governor Rogers for their time today.

We look forward to seeing you again in the fall, I'm sure. Thank you very much.

If the committee agrees, we shall adjourn.

[Some hon. members]

Agreed.

[The Chair, Liberal, Karina Gould]

We shall adjourn.