Macklem Warns Tariffs, Energy Prices Threaten Canadian Economic Growth

Bank of Canada Governor Tiff Macklem said that the Canadian economy's growth could be cut in half due to US tariffs and rising energy prices. The tariffs, which affect approximately 5% of Canada's exports to the US, could lead to a decline in gross domestic product (GDP) growth to below 1% in the fourth quarter.

Macklem also mentioned that the ongoing war in the Middle East is reducing global refining capacity and increasing gasoline and diesel prices. This development is keeping consumer price index inflation near 3% for several months.

When asked about the upcoming interest rate decision on October 28, Macklem emphasized that monetary policy has its limits and cannot offset tariff effects or control global energy prices. However, he noted that the bank will adjust monetary policy as needed to keep inflation low, stable, and predictable.