The recent Bank of Canada (BOC) decision to cut its key interest rate to 4.25% reflects ongoing efforts by the central bank to stimulate economic growth amid rising unemployment and slowed job creation.
While these rate cuts are intended to boost household spending, business investment and, ultimately, job growth, experts warn that the recovery will be gradual — and when it comes to hiring, businesses will be playing a bit of a game of who-blinks-first.
“That’s part of the problem, is that it’s one of those things where each firm is kind of waiting for other firms to start doing something,” says Philippe Cyrenne, professor of industrial organization and public economics at the University of Winnipeg.
