TORONTO — Fixing Canada’s productivity problems will likely take a top-to-bottom overhaul of government rules that obstruct people’s ability to do their best work and businesses’ ability to grow, Bank of Canada governor Tiff Macklem said at The Logic Summit on Monday.

“Monetary policy, fiscal policy, tax policies, competition policy, IP policy—we need to look at those,” Macklem said at the annual gathering, as he was interviewed on the main stage by economics columnist Kevin Carmichael.

Interprovincial trade barriers—often in the form of different regulations covering the same basic activities—are another set of problems. Recognizing professional credentials in different jurisdictions would help, Macklem said, as would quickly integrating people trained abroad, so they can put their skills to work in Canada as speedily as possible.

Many of these things are “own goals,” he said, things we’re purely doing to ourselves without outside pressure. Some rules exist for good basic reasons but need updating or tweaking.

“We caused these problems, we can un-cause them,” Macklem said.

Macklem was freshly back in Canada after meetings of the International Monetary Fund in Washington, D.C.—where the mood, if sometimes grim, was better than it was a year ago, he said. Canada is in a good position, globally, with a hard-working, highly educated population and strong fundamentals like the rule of law.

Though he refused to be drawn on what the consequences for Canada might be of either a Kamala Harris or Donald Trump presidency, Macklem said Canada has strong agreements with the United States on numerous areas of shared interest and those have staying power. 

“North America is a very good neighbourhood to be in,” he said.

Nevertheless, the country is grappling with a productivity crisis that Macklem’s senior deputy, Carolyn Rogers, called a “break the glass” moment last March. 

A less productive economy is more prone to inflation, and that prompts central banks to impose higher interest rates, she said at the time. Nobody much likes either of those, but the Bank of Canada can’t will the country into producing greater quantities of desirable goods from fewer inputs.

Leaders of businesses have to decide to invest in productivity improvements and to pursue higher-value activities. Startups have to challenge stodgier established companies, and governments have to make all of this as easy as possible, Rogers said then.

Macklem repeated all those sentiments Monday: “I don’t have all the answers,” he said.

Setting monetary policy to deal with the ordinary ups and downs of the business cycle is one thing. Macklem has been guiding the bank through exceptional challenges, ones that even ideal monetary policy can’t fix.

He succeeded Stephen Poloz as governor midway through 2020, as the economy teetered amid some of the worst of the COVID-19 pandemic. Then came the highest inflation rates in recent memory, which the central bank moved to throttle by hiking interest rates.

“We raised interest rates faster than we ever did before,” Macklem said Monday. It was a harsh series of moves, he acknowledged, meant to deal with an extraordinary problem as fast as possible.”

“It squeezed many of you. It squeezed Canadians. But it has worked,” he said.

Now inflation is under control but the economy is anemic, and the Bank of Canada is cutting rates aggressively to try to juice activity again.

It’s been a wild time, and it’s not over. Wars in Ukraine and the Middle East, besides the horrifying humanitarian consequences, are sources of profound economic and financial uncertainty for Canadians, even if we’re physically far removed from both.

But there’s hope, said Macklem. “We’re coming out the other side.”