Reaching out for a clearer view of the economy

Speaking a day after we decided to keep the policy interest rate at 2.75%, Deputy Governor Sharon Kozicki discusses how we make better decisions by looking at a variety of data and talking with Canadians.

We’re gathering more information

Traditional data on inflation, jobs and housing are key to our decisions about whether to lower, raise or maintain our policy interest rate. But they often just give the big picture. And they show what has already happened, weeks later.

Non-traditional data can help us see what’s happening under the surface—and in a timelier way. That’s especially helpful in uncertain and rapidly changing situations.

• At the start of the COVID-19 pandemic, we used data on restaurant reservations, flight bookings and credit card transactions to see how consumer spending patterns were shifting in real time.
• Today, to gauge the early impact of tariffs, we’re looking at changes in the number of trucks crossing the Canada-US border and the volume of ships entering and leaving ports.

Similarly, our surveys give us a clearer sense of the evolution of the economy, and timelier insights from Canadians across regions and sectors. The quarterly Business Outlook Survey (BOS), the monthly Business Leaders’ Pulse (BLP) and the quarterly Canadian Survey of Consumer Expectations have been especially helpful in recent years.

We’re meeting more Canadians in their communities

Members of the Bank’s Governing Council also meet with businesses and industry groups to hear their views. This is another way of spotting trends before they show up in the data.

These discussions have been particularly valuable this year. It’s important for Governing Council to hear first-hand how tariffs and uncertainty are affecting businesses in key sectors and different parts of the country. The relationships that our regional staff have developed over many years have given us a real-time feel for the impacts of the trade conflict.

Governing Council has also ramped up its outreach in communities across Canada—meeting with Indigenous Peoples, labour unions, public officials and social services organizations.

We’re building trust and credibility

Connecting with Canadians helps build trust and credibility with the people we serve. When Canadians trust that the Bank will follow through on its commitments, it makes it easier for our policy decisions to benefit the economy by keeping inflation low and stable.

The last few years were hard. Households and businesses dealt with the highest inflation in decades, and then with high interest rates that were needed to bring down inflation. Now Canadians face more uncertainty because of the trade conflict. We will continue to work hard to earn the trust of Canadians as we pursue our mandate to keep inflation low and stable.