Bank of Canada warns of a tougher economy as structural shifts reshape trade, immigration and jobs
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The Bank of Canada has warned that the Canadian economy is entering a more difficult phase, shaped by the combined effects of U.S. tariffs, slower population growth linked to tighter immigration, and the rapid spread of artificial intelligence across workplaces and production. Speaking on Thursday before the Brandon Chamber of Commerce in Manitoba, Senior Deputy Governor Carolyn Rogers said these forces are no longer temporary shocks but structural changes that could reshape how the economy functions in the years ahead.
Rogers said the challenge ahead is no longer just about tracking inflation, but about understanding an economy that is becoming harder to read through traditional models. She said the central bank is not moving away from its 2 percent inflation target, but is updating how it analyzes, forecasts and makes decisions by improving its reading of supply shocks, expanding its use of real-time data, and relying more heavily on scenario analysis rather than a single baseline path.
According to the Bank, uncertainty surrounding U.S. trade policy is already weighing on business investment, with consequences for jobs and productivity. At the same time, slower immigration means fewer workers and consumers, while artificial intelligence could lift productivity and lower costs but also create new disruptions across parts of the labour market.
The warning comes as the Bank of Canada and the federal finance ministry prepare to review the inflation-targeting framework later this year, part of a five-year renewal cycle. Rogers said the next five years could prove as challenging as the last, which means the Bank’s role will not only be to keep inflation stable, but also to navigate an economy changing more deeply and more unpredictably than before.
