BoC Holds Rate at 2.25%; Macklem Backs Diversification

Bank of Canada Governor Tiff Macklem expressed encouragement Wednesday over federal government efforts to diversify Canada's economy and shield it from global trade disruptions, while highlighting energy price spikes from Middle East conflicts and U.S. trade uncertainties as key risks.

In an interview following the central bank's decision to hold its benchmark interest rate steady at 2.25 per cent for a fourth consecutive time, Macklem outlined steps to build resilience, such as expanding export markets beyond the United States, reducing interprovincial trade barriers and streamlining regulatory approvals to attract foreign investment. "These things are not going to get fixed overnight," he said. "It's going to take a determined plan and a willingness to keep the momentum. But yes, I think the direction is encouraging and now a lot of it is about execution."

Macklem noted renewed momentum in addressing longstanding economic vulnerabilities that have hampered productivity and investment, including overreliance on U.S. markets. He emphasized the bank's role in maintaining price stability amid a "more shock-prone world," with inflation projected to peak near three per cent in April...