is also subject to several important risks. for example, it ’ s possible that consumption could be stronger than expected if households quickly reverse the buildup in savings they have accumulated since the start of the pandemic. in contrast, an economic setback could lead to a sharp tightening of financial conditions, further slowing both growth and inflation. the governing council sees the risks around the projection to be roughly balanced. but it ’ s important to remember that we are operating at the effective lower bound for our policy interest rate and inflation is well below target. so, we are particularly focused on the downside risks to our projection. given the outlook, the governing council agreed that extraordinary monetary policy support will continue to be needed. accordingly, we will continue to hold the policy interest rate at the effective lower bound until economic slack is absorbed so that the 2 percent inflation target is sustainably achieved. in our current projection, this takes us into 2023. we are providing exceptional forward guidance combined with a full economic projection to provide as much clarity as we can to canadians in an environment of considerable uncertainty. our forward guidance is being reinforced and supplemented by our quantitative easing ( qe ) program. we are recalibrating our program of government bond purchases, and i want to take a moment to explain what we are doing and why. at the outset of the pandemic, our bond purchases were focused on restoring orderly market conditions, and we concentrated on buying bonds with shorter maturities where issuance was strongest. now that markets are functioning well and the yields on shorter maturity bonds are well anchored by our forward guidance, we can concentrate more of our bond purchases at longer maturities. shifting our purchases to longer - maturity bonds increases the amount of monetary stimulus provided per dollar purchased. that ’ s because it focuses more directly on the borrowing rates that are most relevant for households and businesses. given the expected impact from buying more longer - term bonds, the governing council judges that, as we gradually reduce our total weekly bond purchases from at least $ 5 billion to a minimum of $ 4 billion, our qe program will continue to provide at least as much stimulus as before. this recalibration of the program will increase its effectiveness. the qe program will continue until the recovery is well underway. we are committed to providing the monetary policy stimulus needed to support the recovery and achieve the inflation objective. 2 / 3 bis central bankers'speeches with that, senior deputy governor wilkins and i will now be happy to take

tiff macklem : opening statement before the standing senate committee on banking, trade and commerce opening statement by mr tiff macklem, governor of the bank of canada, before the standing senate committee on banking, trade and commerce, ottawa, ontario, 27 april 2022. * * * good evening. i ’ m pleased to be here with senior deputy governor carolyn rogers to discuss our recent policy announcement and the bank of canada ’ s monetary policy report ( mpr ). we published our mpr as russia ’ s unprovoked invasion of ukraine entered its eighth week. the war is causing tremendous human suffering, and our hearts go out to the ukrainian people. the war has also injected new uncertainty into the global economic outlook. it is boosting already high inflation in many countries, including canada, and it is disrupting the global recovery from the covid - 19 pandemic. against this backdrop we have three main messages. first, the canadian economy is strong. overall, the economy has fully recovered from the pandemic, and it is now moving into excess demand. second, inflation is too high. it is higher than we expected, and it ’ s going to be elevated for longer than we previously thought. third, we need higher interest rates. our policy interest rate is our primary tool to keep the economy in balance and bring inflation back to the 2 % target. two weeks ago, we raised our policy rate by 50 basis points to 1 %. and we indicated canadians should expect further increases. let me expand on each of these three themes. canadians have been through a lot in the past two years. everyone has been touched by the pandemic, through illness or the loss of loved ones, fear and uncertainty, job loss or business closure. we experienced the sharpest and deepest recession on record. and repeated waves of the virus have made the recovery bumpy. thanks to exceptional monetary and fiscal stimulus, effective vaccines and a willingness to adapt and innovate, the economy has bounced back remarkably quickly. it has been the fastest and sharpest recovery ever. and now demand is beginning to run ahead of the economy ’ s productive capacity. the labour market shows this clearly. before the pandemic, canada ’ s unemployment rate was 5. 7 %. when the pandemic hit, it quickly soared to 13. 4 %. and now, two years later, it is at a record low 5. 3 %. job vacancies are elevated,