The second-in-command at the Bank of Canada says breaking down inter-provincial trade barriers and reforms to tax and regulatory systems would keep the country’s economy humming into the future.
In a speech in Toronto today, Carolyn Wilkins says the bank’s monetary policy tool kit will only take Canada’s economy so far in outlining the need for innovation and investments across a range of economic actors.
The bank’s senior deputy governor points to low neutral interest rate levels — where monetary policy doesn’t stimulate or hold back the economy — as leaving central banks with less room to cut rates to stimulate growth.
Citing a slew of policy organizations, Wilkins says investing in digital infrastructure, optimizing the tax and regulatory environment, and getting government and business to tag-team on skills training would make Canada more productive and more competitive abroad.
Wilkins says policies like these could “restore some lost manoeuvrability for monetary policy” and keep the global economy on a more even keel.
Her speech comes as the central bank considers how it could complement federal policies as it sets to renew its inflation-target framework next year with the federal government.
This report by The Canadian Press was first published Feb. 5, 2020.
The Canadian Press