Contributed by Robert Lyman @2025. Robert Lyman’s bio can be read here.

On September 23, 2025, Tiff Macklem, Governor of the Bank of Canada, gave a speech in Saskatoon largely on the consequences for Canada of changes in the global economic situation, and specifically on the changes in international trade patterns as a result of the tariff policies of the United States. In the speech, he commented on what these developments mean for Canada and made some recommendations for change. In what follows, I will list the actions he recommended for governments and comment on them. He did not assign any responsibility to business.

Action: Governments should strengthen trade ties with countries other than the United States

Comment: Canadian governments for decades have been claiming that they were seeking to diversify trade away from heavy reliance on the United States. The share of Canada’s exports that go the USA have varied over time, but generally they rose from 65% in 1980 to 76% in 2024. Lip service does not cut it.

Action: Governments should be prepared for new financial stability risks. They should strengthen surveillance of financial liabilities – especially as hedge funds and non-bank financial intermediaries play an increasingly important role. The IMF and the Financial Stability Board need to identify potential systemic risks.

Comment: The international financial institutions, public and private, have increased financial risks by claiming that climate change poses so large a risk that it requires heavy regulation of financial institutions and of the firms regulated by them including burdensome and costly financial reporting. They are a large part of the problem.

Action: Governments need to help diversify trade by growing our internal market and finding new overseas markets, and helping to increase productivity. They need to lower the cost of doing business across the country. This includes removing trade barriers and many small regulatory differences, mutually recognizing provincial labour accreditation for many professions, removing unneeded barriers to investment by shortening regulatory approvals and reducing regulatory uncertainty.

Comments: This looks like a list of all the things that Canadian governments have not done since 2000, but especially since 2015. The federal and provincial governments have protected the continuation of exemptions from provisions allegedly guaranteeing free inter-provincial trade. They have failed to use their regulatory powers to facilitate the construction of the road, rail, pipeline and port infrastructure needed to increase access for Canadian producers of all goods to non-US export markets. They have empowered environmentalists, leftists and indigenous groups to use the regulatory regimes and the courts to block major new investments. They have imposed expensive DEI obligations on almost all Canadian firms. They have spent like drunken sailors and taxed companies that otherwise might have used those funds to invest in new production capacity or to increase productivity. They have blocked over $100 billion (and perhaps as much as $160 billion) in project investment in the oil and gas industry alone and that number continues to increase yearly as a result of the Impact Assessment Act.

Action: Governments should support better east-west transportation links to grow our internal market and get our products to overseas markets.

Comment: Almost all major east-west oil and gas pipelines proposed over the past 15 years have been blocked either by the actions of federal or provincial governments. In the few cases where the federal government has intervened to support oil pipelines or electricity transmission lines (the TransMountain Expansion Pipeline and the Muskrat Falls/Lower Churchill Project in Labrador), the capital costs escalated to levels the private sector would never have financed. Some east-west projects make economic sense; the best way to ensure that they do not is to have governments sponsor and pay for them.