Governor of the Bank of Canada Tiff Macklem delivers a speech at a Calgary Economic Development event in Calgary, Alta. on March 20, 2025. (Credit: THE CANADIAN PRESS\/Jeff McIntosh) <\/p>\n
Canada must make urgent structural reforms to ensure its long-term economic prosperity in the wake of the U.S. trade war, the full impact of which has yet to hit the world\u2019s economy<\/a>, Bank of Canada governor Tiff Macklem<\/a> said Tuesday.<\/p>\n \u201cThe global economic fallout from the U.S. trade war has so far been milder than first predicted \u2014 both because the U.S. tariffs are not as high as initially feared and because retaliatory tariffs<\/a> were limited,\u201d Macklem said during a speech to the Greater Saskatoon Chamber of Commerce. \u201cBut the full impact has yet to be seen.\u201d<\/p>\n Macklem said Canada\u2019s economic growth trajectory has been permanently lowered as the result of U.S. trade action and can only be reversed through strong policy action to increase investment and productivity.<\/p>\n \u201cCanadian leaders \u2014 business, political and economic leaders \u2014 need to chart a new course,\u201d he said. \u201cWe should have been making these changes 15 years ago. But the best time is now.\u201d<\/p>\n While monetary policy can support the economy in its adjustment to the new U.S. trade reality, Macklem said it cannot reverse the damage from tariffs. Last week, the Bank of Canada<\/a> lowered its policy rate to 2.5 per cent, the first trim since March amid signs of a weakening economy.<\/p>\n