OTTAWA
Bank of Canada Governor Tiff Macklem told members of Parliament on Tuesday he does not think the federal government's fiscal policy is at odds with the central bank's efforts to control inflation.
Macklem was speaking at the House of Commons finance committee two days before the Liberal government plans to table its 2026 federal budget.
Conservative finance critic Michael Chong asked Macklem for his opinion on the government's affordability efforts. The central bank governor declined to answer directly.
He said he only comments on the government's fiscal policy when spending is approaching unsustainable levels, or when the government's actions are working against the Bank of Canada's efforts to tame inflation.
"In the current circumstances, I don't think either of those criteria are met," he said.
The Bank of Canada operates independently of the federal government to steer monetary policy, primarily by setting its benchmark interest rate.
The Bank of Canada increased that key rate by a quarter-point to 2.5 per cent last week, reflecting worries about inflation pressures bubbling up from the war in the Middle East.
Macklem did comment publicly on the pace of government spending three years earlier. He warned at the time that fiscal spending was adding to demand faster than it was increasing supply, which was "not helpful" for getting inflation back under control.
Conservative Leader Pierre Poilievre regularly rails against the Liberal government over what he calls inflationary spending. He has urged the government to slash spending ahead of Thursday's budget to help get costs under control for Canadians.
A recent Statistics Canada study found "no broad evidence" that the rise of artificial intelligence has led to substantial decreases in hiring or increases in job separation rates in Canada since November 2022.
The study published last week said this was the case for younger workers and people in jobs it classified as potentially more susceptible to AI substitution, like data-entry clerks or computer coding-intensive occupations.
"AI is no doubt reshaping sort of workflows and redefining jobs right now. I have no doubt about that," said Tahsin Mehdi, a senior research economist at the agency and study co-author. "It's just, it may not be eliminating entire jobs right now."
Statistics Canada noted hiring and job separation rates, which account for layoffs, from the six months before November 2022 to the six months ahead of August 2026 were "generally within historical ranges or represented a continuation of pre-existing trends."
The study examined data from labour force surveys for workers aged 15 to 64 in Canada between January 2006 and August 2026 and classified jobs based on potential exposure to and complementarity with AI.
Mehdi said hiring and job separation rates were used because they can offer "early signals of shifts in the labour market" whether due to trade dynamics, economic factors, tech disruptions or AI.
He said data showed a decline in hiring for young workers across industries, including jobs generally seen as less impacted by AI.
"It's hard to sort of differentiate (or) sort of tease out, well, if it's happening across the economy, then how can we really say that AI is definitely impacting certain jobs?" Mehdi said.
For example, the study noted that in jobs with low exposure to AI, the hiring rate for employees aged 15 to 29 decreased from 4% in the six months before November 2022 to 3.3% in the six months before August 2026. Meanwhile, over that same period, youth hiring rates in jobs more vulnerable to AI substitution edged down from 3.2% to 3%.
"We have a lot of competing economic forces out there," Mehdi said. "AI is another layer of complexity, but we have trade dynamics, U.S. tariffs, we have immigration shocks over the past couple of years, the rapid growth in population, which had an impact on the labour. It's sort of hard to tease out how AI fits into all that when we have so many things going on."
The study also indicated hiring rates in coding-intensive jobs decreased from 2.5% to 1.9% in the 2022 to 2026 time span, but Mehdi said hiring in that field rose to above 5% around 2020 and 2021, and firms may have over-hired during the pandemic.
"Often people sort of mischaracterize that as an AI effect, when in reality it could have been firms just simply adjusting their workforce," he said.
Employment growth for younger workers was relatively weak, regardless of potential exposure to AI, in the post-pandemic period, according to the research.
"After the pandemic, the labour market did shift in a substantial way, and some groups of the population, such as youth, they might be still sort of feeling the reverberations and aftershocks from the pandemic," Mehdi said.
e2gold.ca reported earlier this week that Poilievre had demanded fuel tax cuts and spending restraint ahead of the budget.
The federal budget, set for release Thursday, will include affordability measures and business tax incentives, according to a senior government source.
This story was written by the e2gold.ca newsroom from reporting by BNN Bloomberg, Investment Executive, The Spec and CTV News. Quotes are checked word for word against that reporting.