Tiff Macklem: End of household debt binge will leave $50bn gap in the economy - Macleans.ca

Tiff Macklem: End of household debt binge will leave $50bn gap in the economy

Mark Carney’s likely successor speaking in Kingston, Ont.


Bank of Canada Deputy Governor Tiff Macklem, the favourite candidate to replace Governor Mark Carney when he takes off for England in the Spring, is speaking right now at Queen’s University in Kingston, Ont.

Below is the integral text of his remarks, and here are a few pointers:

  • We can’t count on the housing market and overstretched consumers to keep propelling economic growth.
  • Eliminating Canadians’ private net debt the household sector’s deficit alone would leave a $50bn gap in the economy.
  • What’s going to help us plug the hole? Our traditional engine of growth, exports, has been underperforming for over a decade.
  • Two-thirds of this is because we’re exporting to the wrong markets (too much of the U.S., too little of the emerging economies), but one-third is also because we’ve become less competitive. Even in the U.S. market, we’ve lost market share.

The Deputy Governor, of course, doesn’t sound nearly as gloomy as the bullet points would have you believe. After all, he notes, we have a small fiscal federal deficit, a healthy financial system, a great reputation among foreign lenders, and lots of natural resources and educated people. Still…

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Tiff Macklem: End of household debt binge will leave $50bn gap in the economy

  1. We have to move to the knowledge economy….manufacturing isn’t coming back.

    • But that requires people that ‘know’ something.

      • Heh….yeah, there seems to be a shortage of that anymore.

    • It’s easier if we just further suppress wages.

      • Wages are dropping anyway, and will shortly be at minimum in manufacturing

        • There’s a difference between dropping and being suppressed.

          • Not to the employee involved.

    • So you don’t believe Canada has Dutch Disease then?

      • I was talking about the new economy, not the mess you’re making of the old ones.

        • oh ya, that “new” economy that exists in your head. The one where we don’t export anything, we don’t extract any natural resources, we don’t build anything. We all just comment on the internet all day, call ourselves economists ….. and then get rich.

          • So the “new economy” is now the “knowledge economy”…. can you explain how either of those jives with you and Mulcair’s Dutch Disease theory? Can you explain how your knowledge economy is going to somehow save Ontario manufacturing? Or are you just rambling again because you forgot to take your meds?

          • Also called the Knowledge Age, Information Age….as you know.

            And as you also know, because it’s in my earlier post ‘I was talking about the new economy, not the mess you’re making of the old ones.’

            Earlier I said ‘manufacturing isn’t coming back’

            So don’t keep asking me questions I’ve already answered. You aren’t interested to begin with….it’s Friday. Go home early.

          • Emily, you obviously don’t know that mixing a drink is “manufacturing.”

            Remember this one pal, the second you sit down with Dave Miller on Queen Street and order up one of those fancy drinks with an umbrella in it, you’ve joined the filthy likes of Henry Ford in repessing the life of the poor sod who you forced to mix it.

    • Elmo, you won’t make it in the “knowledge” economy you’re too lazy and undisciplined.
      For those in the “knowledge” economy, Wikipedia doesn’t cut it..

  2. “Eliminating Canadians’ private net debt alone would leave a $50bn gap in the economy.”

    Not to be pedantic, but this is error always jarring. You meant to say ‘deficit’ and not ‘debt’. Deficit is the rate of increase in debt. Deficit is a flow and debt is a accumulated stock…

    • Not to be grammatically correct, but …..

      “but this is error always jarring”

      Unless you are a Star Wars character, I am going to have to call ‘wtf’ on that.

    • Indeed, that should have read “household sector deficit.” I’ve corrected, thanks for pointing out

  3. So, does this mean that a good chunk of the economic growth that has occurred under Harper Inc., has really been pseudo-growth? “Growth” that occurred only because we lived beyond our means and charged a bunch of stuff to the credit card.