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Canada Must ‘Lean Into’ Economic Disruption, BoC’s Macklem Urges

On Thursday, Bank of Canada governor Tiff Macklem urged firms to lean into disruptive forces at an Empire Club of Canada luncheon in Toronto, signalling no further stimulus is likely.
Three forces—U.S. protectionism, artificial intelligence and slower population growth—are reshaping Canada’s economy by lowering potential output and slowing labour-force growth.
The Bank forecasts muted GDP growth of 1.1 per cent in 2026 and 1.5 per cent in 2027, citing trade uncertainty and slow population growth, and sees early evidence that AI is reducing entry-level jobs.
Firms face restrained hiring this year, and Macklem warned that lowering rates risks stoking inflation and delaying structural change if businesses fail to adapt.
Macklem said the transition will be measured in years not quarters and could ultimately make the economy more resilient; the Bank's next interest-rate decision is set for March 18, and financial markets expect it to stand pat through 2026.

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