Bank of Canada Governor Tiff Macklem holds a press conference at the Bank Of Canada in Ottawa on Wednesday, Oct. 28, 2020. THE CANADIAN PRESS/Sean Kilpatrick

Canada must fight to retain talent after Biden enters White House, Macklem says

Canada must fight to retain talent after Biden enters White House, Macklem says

OTTAWA — Canada’s top central bank warned Tuesday that this country will face a fight to retain and attract top talent when the White House gets a new occupant next month.

Protectionist policies and attitudes stemming from U.S. President Donald Trump have helped make Canada a more attractive landing spot for global talent over the past four years.

But the advantage for international students and workers is likely to disappear when Trump leaves, Bank of Canada governor Tiff Macklem said in a speech to the Greater Vancouver Board of Trade.

He said being welcoming to newcomers can boost the economy and increase exports in goods and services needed for a recovery from the COVID-19 pandemic.

Macklem also said Canadian schools and companies may have to fight harder to attract and retain talent after Joe Biden is sworn in as president.

But Macklem warned that fighting for talent isn’t enough on its own to create a sustainable recovery, noting that governments must also invest in infrastructure and remove internal trade barriers to help exports recover.

He said federal and provincial governments have co-operated often through the pandemic, suggesting it could finally lead to an end to interprovincial trade hurdles that stymie the movement of goods, services and professionals.

Government infrastructure spending should focus on trade enhancements so exporters know there is a way to easily get their products to market and alleviate bottlenecks, particularly at ports, he said.

The recovery so far has seen the country recoup just over 80 per cent of the three million jobs lost during spring shutdowns and output is climbing closer to pre-pandemic levels.

Earlier-than-expected arrivals of vaccines, coupled with rising COVID-19 case counts, will mean a mixed bag for the economy in 2021. Macklem said the economy could go in reverse for the first quarter of 2021 before improving as vaccinations roll out.

The bank’s official outlook will be updated next month.

“Clearly the biggest thing right now is there is a lot of excess supply in the economy. There are still roughly 575,000 Canadians who lost their job during the pandemic and have not gotten it back,” Macklem told reporters after the speech.

“It’s going to be an uneven, a long, a choppy recovery. And I’m sorry to say, but we’re seeing that chop right now.”

The central bank plans to keep its key policy rate at 0.25 per cent until inflation gets back to the bank’s two per cent target.

Statistics Canada will release November’s inflation reading on Wednesday morning. The average economist estimate is for an increase of 0.8 per cent in the consumer price index, according to financial data firm Refinitiv.

Household spending is fuelling the rebound, but the country will need to see a rise in exports and business investment if the recovery is to be sustainable, Macklem said.

The path exports take will rest on global forces, Macklem said, including whether international co-operation on vaccines and distribution break through protectionist policies.

Everyone is hoping for a best-case outcome, Macklem said, adding, “but hope is not a strategy.”

The last time Canada climbed out of a recession, following the 2008-09 global financial crisis, Macklem was the second-in-command at the central bank.

Even though Canada’s recession was not as long or as deep as other countries, domestic exports fell by close to 30 per cent, higher than the 20 per cent decline globally.

The reason was a combination of weak foreign demand, particularly from our biggest trading partner in the United States, Canada’s reliance on the U.S. and other slow-growth markets instead of emerging economies, and a lack of competitiveness.

But while the period before that crisis was relatively positive for trade, Macklem said the same can’t be said this time around, pointing to trade disputes started by Trump.

As well, Canada’s trade in services, such as tourism, hasn’t recovered as well as goods such as automobiles, even though service exports had been growing faster than goods.

What’s needed is for companies to think about what products are in demand in fast-growing markets, Macklem said. He pointed in his speech to digital services like online education and e-commerce, or applying new technology to traditional sectors.

He also said the export potential for green technology is high given global concerns about climate change.

This report by The Canadian Press was first published Dec. 15, 2020.

Jordan Press, The Canadian Press


Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

NDP MP Heather McPherson pictured in Edmonton on Friday, March 6, 2020. Alberta’s legislature may have been silenced but its partisan warfare has relocated to the House of Commons as MPs hold an emergency debate tonight on the province’s soaring COVID-19 cases. THE CANADIAN PRESS/Jason Franson
Kenney under fire during Commons emergency debate on Alberta’s COVID-19 crisis

Edmonton New Democrat MP says Kenney ignored the evidence of science

A General Motors sign in Oshawa, Ont., is photographed on Wednesday, June 20, 2018. General Motors Canada says it will start truck production at its assembly plant in Oshawa, Ont., ahead of schedule. THE CANADIAN PRESS/ Tijana Martin
Oshawa assembly plant restart ahead of schedule, GM Canada says

Closure of plant in 2019 was huge blow to Canada’s manufacturing sector

FILE - In this Jan. 24, 2019, file photo, a woman walks by the Australian Embassy in Beijing. China on Thursday, May 6, 2021 suspended an economic dialogue with Australia, stepping up a pressure campaign that began over Australian support for a probe into the origins of the coronavirus. (AP Photo/Andy Wong)
China suspends economic dialogue with Australia

China’s relations with Australia, India and some other neighbours are increasingly strained

An electric car is seen getting charged at parking lot in Tsawwassen, near Vancouver, Friday, April, 6, 2018. Should Canada introduce a national mandate requiring the auto industry make or sell more zero-emission vehicles is a question facing the Liberal government as it’s not on the road to meet its own sales targets. THE CANADIAN PRESS/Jonathan Hayward
Should Canada mandate sales targets for electric vehicles? Report says ‘yes’

Parliamentary committee studied how to incentivize the purchase and production of electric vehicles

LtE bug
Letter: Restrictions are a crime against humanity

I was distressed to note the seemingly superficial understanding of the holocaust… Continue reading

LtE bug
Letter: Follow restrictions so pandemic can be behind us

From one who feels that COVID could have been overcome long ago… Continue reading

LtE bug
Letter: Westerner needs help now

I have spent the last few days sifting through many pieces of… Continue reading

Jets beat Flames 4-0 to snap seven-game losing streak and clinch playoff spot

Jets beat Flames 4-0 to snap seven-game losing streak and clinch playoff spot

Most Read