The head of the Bank of Canada says the country faces a new economic reality as the U.S. embraces protectionist trade policies, and changes must be made to lessen the impacts.

“The ramifications of a new relationship with the United States are immense, and one thing is clear: we cannot afford to wait this out,” Bank of Canada Governor Tiff Macklem said.

Macklem spent the first of two days in Saskatoon Tuesday speaking with business leaders at a luncheon at TCU Place. During his roughly 20-minute speech, Macklem highlighted this new economic world, and touched on Saskatchewan’s role within it.

Macklem identified several of what he called “megatrends” in global economics right now.

Trading has slowed, and the U.S. no longer commands global trade, but still dominates financial flows. Trade imbalances also exist — with a “persistent” trade deficit in the United States and larger surpluses in China and the European Union.

“There’s some role for monetary policy to try to help the economy adjust to this new relationship,” Macklem said. “But our primary mandate is to make sure that Canadians don’t need to worry about a big change in their cost of living.”

Macklem said the American dollar has depreciated and the value of gold has risen as confidence has weakened recently, especially in difficult times.

“While the greenback will likely remain the global reserve currency for the foreseeable future, for many, its value as a hedge in times of stress has been dented,” Macklem said.

Macklem says Canada has been slow to diversify its trading exports and rely less on the U.S. economy following the 2008 financial crisis.

The recent tariff and trade policies mean Canada needs to “follow through” this time, he says.

Macklem touted Saskatchewan as the outlier here.

Most Canadian provinces export 75 per cent of their goods to the U.S., while Macklem says Saskatchewan’s exports south of the border are just under 60 per cent.

“Canada needs to do more of that. Canada needs to diversify its trade,” Macklem said.

Yet Saskatchewan’s reliance on trade is greater than other provinces, with exports accounting for half the income in Saskatchewan.

Premier Scott Moe made a surprise appearance at the luncheon and told guests that will continue to be a strength of the provincial economy.

“If you don’t work directly for an industry that is exporting a product somewhere else in the world, you’re likely servicing people that are working in an exporting industry,” Moe said.

As for a way through the uncertain times, Macklem says removing trade barriers, recognizing provincial labour standards and removing transportation barriers to get more products moving east and west, as well as to ports in quicker fashion are just some examples of the change needed to see Canada’s economy to continue to grow.

He says not only can Canada not delay, but its overall economic prosperity could be damaged without this change.

“The more we can grow our markets, the more we can reduce the cost of doing business in the country, the more we can improve our productivity that will generate more income,” he said.

“And if you have more income, everything becomes more affordable. ”