It should also help reduce the debt service costs faced by households and businesses, he said, particularly if they took out loans to move to a better time.
Rates would only increase when Canada is in full economic recovery, which Macklem suggests is still a long way off.
The Bank of Canada lowered its key rate to 0.25%, which it says is as low as possible, and launched an unprecedented bond purchase program to dampen credit flows in the financial markets .
Macklem made the comments when he first appeared as governor before the House of Commons finance committee – his first public statement since taking office on June 3.
“Someday we will get through this, the economy will be restored and interest rates will start to return to more normal levels,” Macklem said on Tuesday.
“But we’re in a deep hole, and it’s going to be very far from that hole. ”
During his appearance, Macklem said that the bank had focused in the first weeks of the crisis on restoring orderly market conditions, efforts which appear to be bearing fruit with a normalization of conditions.
According to him, the bank is now focusing on the future trajectory of monetary policy, an important step to be taken next month with the publication of the economic outlook.
Bank’s July monetary policy report will likely again provide the best and worst case scenarios for the economy rather than precise numbers for gross domestic product and inflation due to the unknown course of the pandemic, says Macklem .
He added that the report will also discuss the potential risks facing the economy and the bank in reaching its target inflation rate.
The results of the report will help determine how much monetary stimulus will be needed and for how long, says Macklem.
He also says he expects to see growth in the third quarter of the year given the growth of 290,000 jobs registered in May, as well as more people looking for work and more d ‘regular working hours.
“I think I could see good numbers (in the third quarter), but I want to point out that even the good case is still bad enough,” said Macklem.