Remarks by the Deputy Prime Minister and Minister of Finance on Bank of Canada rate decision

June 7, 2023

I first want to acknowledge the decision taken by the Bank of Canada this morning.

The Bank of Canada pursues a monetary policy that is independent of the government, and we respect that independence.

Canada’s pioneering tradition of central bank independence is respected around the world, and the strength and independence of our institutions—including the Bank of Canada—is one of the fundamentals that makes Canada a safe and reliable place to do business.

Second, I want to underscore for Canadians why they should be confident in the strength and resilience of the Canadian economy.

Canada saw the strongest economic growth in the G7 in 2022, and in the first quarter of this year, our economy grew by 3.1 per cent, the strongest in the G7.

Just this morning, the OECD predicted the Canadian economy will see the fastest rate of growth on average in the G7 for 2023 and 2024.

In April, after we tabled the budget, S&P reiterated Canada’s AAA credit rating, and Canada has both the lowest deficit-to-GDP and the lowest net debt-to-GDP ratio in the G7— lower than our two other G7 AAA-rated peers, the United States and Germany, and also lower than some other major AAA-rated economies like the Netherlands.

Most important of all, there are 900,000 more Canadians working today than before COVID first hit. In the first four months of 2023, the Canadian economy added nearly a quarter of a million jobs.

We have now recovered 129 per cent of the jobs that were lost in the first months of the pandemic—compared to just 115 per cent in the United States—and at five per cent, our unemployment rate remains near its historic low. That really matters in the lives of Canadians across the country.

The 2008 recession was much shallower than the COVID recession, but it scarred a generation of young people. We were determined not to let that happen again—and because of our relentless focus on jobs during the pandemic, we are succeeding on that front.

Following the 2008 financial crisis, it took more than nine years for Canada’s unemployment rate to return to its pre-crisis level. After the devastating COVID peak, it took just two.

The Canadian economy is strong and resilient—and more Canadians have good jobs today than ever before.

A strong and resilient economy with plentiful job opportunities is good for Canadian workers and it is good for families across our country.

Inflation has fallen from its peak of 8.1 per cent last June to 4.4 per cent in April.

That is lower than the UK at 8.7 per cent, lower than Germany at 7.2 per cent, and lower than inflation in Australia, Norway, France, Denmark, the Netherlands, the United States, and the EU overall.

The Bank of Canada has predicted that inflation will fall to three per cent this summer. We are not there yet, but we have made some real, meaningful progress which is being felt in people’s lives.

Getting through COVID was hard, getting through the deep recession caused by COVID was hard, and today, getting through the global inflation caused by COVID and Putin’s invasion continues to be hard.

But there is no country in the world that is navigating these challenges more effectively than Canada—and there is no country in the world better positioned for a soft landing than Canada.

We are very close to the end of this difficult time—and to a return to low, stable inflation and strong, steady growth.

Thank you very much, and I am happy to take your questions.