tiff macklem : opening statement before the house of commons standing committee on finance opening statement by mr tiff macklem, governor of the bank of canada, before the house of commons standing committee on finance, ottawa, ontario, 16 june 2020. * * * introduction good afternoon, chair and committee members. it is an honour for me to appear before you as the 10th governor of the bank of canada. i look forward to working with parliamentarians over the next seven years through regular appearances before committees of the house and senate. these are an important part of the bank of canada ’ s accountability to canadians. today, senior deputy governor wilkins and i are pleased to be here as part of your study of the government ’ s response to the covid 19 pandemic. we particularly look forward to your questions and feedback on the foremost concerns of canadians at this very difficult time. the bank of canada is committed to doing everything we can to help the canadian economy recover from the enormous impact of covid 19. today i will talk about the bank ’ s four main functions and elaborate on how the bank is responding to the pandemic. then i will say just a few words about our operations in general. after that, we will be happy to answer your questions. currency let me begin with our most visible and tangible function — our bank notes. as a central bank, we provide a public good through a universally accepted means of payment. it is the bank of canada ’ s job to provide canadians with safe, secure, high - quality bank notes that they can use with confidence. we know covid 19 has changed the relationship some canadians have with cash, at least temporarily. the bank recently carried out a survey in collaboration with ipsos and statistics canada. we found that about one - third of canadians say they are using bank notes less frequently because of the pandemic. and we know that some retailers are asking canadians to use electronic payment methods instead of cash. the bank strongly advocates that retailers accept cash, for two reasons. first, some canadians don ’ t have a bank account, and many others have accounts that limit the number of debit transactions or subject them to fees. these are often canadians who are particularly vulnerable economically, and they depend on cash to make essential purchases. refusing cash puts an unfair burden on canadians who do not have the same ease of access to financial services that many of us take for granted. second, it is important to note that handling bank notes is no more

david dodge : canada ’ s experience with inflation targets and a flexible exchange rate : lessons learned remarks by mr david dodge, governor of the bank of canada, to the canadian society of new york, new york city, 20 february 2002. * * * the canadian economy has undergone a dramatic transformation over the past decade. and it has emerged as a low - inflation economy, with declining levels of public and foreign debt and a private sector that is more cost - conscious, productive, and efficient, thanks to restructuring and investments in new technology. there is little resemblance between this economy and the one many of us had to contend with in the 1970s and 1980s - one that was racked by high and variable inflation and by unsustainably large and rising public deficits and debt. since the 1990s, canada ’ s monetary policy framework, based on an explicit inflation - control target and a flexible exchange rate, has contributed importantly to putting the canadian economy back on the right path to longer - term prosperity. this is the main theme of my talk today. i will conclude with a few remarks on recent developments and the outlook for the canadian economy. the mark of the 1970s and 1980s : high inflation and fiscal excesses to put canada ’ s inflation - targeting approach to monetary policy in context, a quick look into our economic history over the past three decades is in order. through the 1970s and 1980s, canada, like many other countries, found that high inflation, large fiscal deficits, and rising public debt exacted a heavy toll on the economy. indeed, those of us who had to struggle with those unhappy times do not need to be reminded that high, variable, and unpredictable inflation increases uncertainty about the future. that it distorts the key signals and information individuals and businesses rely on to make important economic decisions. that it leads to exaggerated ups and downs in economic activity and employment. that it wastes valuable economic resources - resources that ought to be going into productive uses, but are instead diverted into hedging, as people seek protection from rising inflation. to make matters worse, through much of the 1970s and 1980s, canadian governments were running large budget deficits. those deficits were absorbing a major part of our national savings. the resulting accumulation of public debt meant high risk premiums in our interest rates. and these, in turn, discouraged the investments in equipment and technology that were necessary to improve productivity. to state the obvious, this was not a sustainable situation. speaking for monetary policy, i