OTTAWA (Reuters) - Companies should get on with investing their piles of cash to boost productivity and open up overseas markets, Bank of Canada Governor Mark Carney said in an interview published on Friday, reiterating a view that has drawn some criticism.
“Instead of waiting around for the world to become a less risky place and everything to be okay, now’s the time to build those opportunities in the emerging world,” the news website iPolitics.ca quoted him as saying in an interview.
“Now’s the time to close that productivity gap because we’ve got a high dollar, we can import machinery and equipment,” he said.
The central bank chief sparked a national debate last month when he criticized corporate Canada for sitting on “dead money” rather than investing it or returning cash to shareholders.
Some commentators said the central banker should keep his nose out of company boardrooms, while several Bay Street economists said it was understandable companies are saving because of the risky times Carney himself flags in his speeches.
But the interview suggested Carney has held to his position. The central banker noted Canada’s banking system, which did not require bailouts during the financial crisis, would be there to support the corporate sector, reducing the need to hoard cash.
“We have a financial sector which is there and is going to be there for the bad times as well as the good times,” Carney said in his iPolitics interview.
“So the argument ‘The world might get tough and I’ll be left without a banker’ may be true in a number of jurisdictions but it isn’t true in Canada so this is time to really get on it.”
He said Canada’s productivity was 78 percent of the U.S. level on the whole, and the United States was not the most productive place in the world.
“We’re just not as productive as we should be,” he said. “That’s something we can change.”
“That’s something our businesses can change and governments can support,” he said.
Reporting by Randall Palmer; Editing by Jeffrey Hodgson