Macklem Calls for Investment in Workforce and Productivity to Drive Economic Growth In a speech to the Halifax Chamber of Commerce, Bank of Canada Governor Tiff Macklem highlighted the urgent need for Canada to prioritize investments in its workforce and productivity to sustain economic growth. “The economy must invest in its workforce and address productivity if it is to continue to grow and prosper,” Macklem said. “We need to find ways to make workers more productive and to increase the number of people in the labor force.” The governor emphasized that Canada faces significant challenges in terms of labor force growth, with the economy projected to need over 1 million new workers by 2030. He also pointed out that Canada’s productivity growth has been lagging behind other advanced economies in recent years. To address these challenges, Macklem outlined several key areas for investment: * Education and training: Canada needs to invest in programs that provide workers with the skills and knowledge they need to succeed in the changing economy. * Child care: Affordable and accessible child care is essential for enabling more people to participate in the labor force. * Immigration: Canada should continue to welcome skilled immigrants who can contribute to the economy and address labor shortages. * Innovation and technology: Investments in innovation and technology can lead to productivity gains and new job opportunities. * Addressing barriers: Canada needs to remove systemic barriers that prevent underrepresented groups from fully participating in the labor force. Macklem acknowledged that investing in these areas will require careful planning and collaboration between governments, businesses, and educational institutions. However, he emphasized that the potential benefits for the economy far outweigh the costs. “By investing in our workforce and productivity, we can create a more prosperous and inclusive future for all Canadians,” Macklem said. “The time to act is now.” Macklem’s speech underscores the growing recognition among policymakers that Canada’s economic competitiveness and long-term growth prospects depend on addressing the challenges of labor force growth and productivity. By prioritizing investments in these areas, Canada can position itself for continued economic success in the years to come.The Bank of Canada’s top official ignited a storm of controversy during a speech in which he emphasized the critical need to prioritize investments in the Canadian workforce and address long-standing productivity deficiencies as the country grapples with various economic challenges. According to Macklem, “We face a number of significant challenges, including a tight labour market, persistent inflation, and geopolitical uncertainty,” he stated, underscoring the pressing nature of these concerns. “To navigate these challenges successfully, we need to invest in our workforce and address productivity.” Macklem highlighted the need for a significant increase in participation rates not just among new immigrants but also among underrepresented groups like Indigenous peoples, people with disabilities, and women, emphasizing that “We need to ensure that everyone has the opportunity to contribute to their full potential,” he stressed. Additionally, he emphasized the importance of initiatives aimed at improving the skills and adaptability of the workforce, stating that “We need to equip our workers with the skills and knowledge they need to succeed in the jobs of today and tomorrow.” The Bank of Canada is solely focused on combating inflation, with an inflation target of 2%, and Macklem suggested that increasing productivity is essential for accomplishing this objective. “Productivity growth helps us to produce more goods and services with the same resources,” he explained. “This can lead to lower costs for businesses and consumers.” He called on businesses to take a leading role, stating that “Businesses have a key role to play in investing in their workers and improving productivity.” He highlighted the importance of providing training and development opportunities, as well as implementing new technologies and streamlining processes in order to boost efficiency. Macklem’s message sparked varied reactions, with some commending his focus on human capital development and others expressing skepticism about the potential impact of his suggested initiatives. In the upcoming months, the Bank of Canada’s policy decisions will be closely watched as it strives to balance its inflation-fighting mandate with the need to bolster the Canadian economy’s capacity for long-term growth.