Bank of Canada Governor Tiff Macklem warns fighting inflation half-heartedly and living with its consequences would be a huge mistake. The governor is delivering a speech to the Saint John Region Chamber of Commerce today, one day after the release of new inflation numbers that show Canada’s inflation rate fell to 3.1 per cent in October. According to his prepared remarks, Macklem contrasts today’s inflation fight with inflation in the 1970s, highlighting similarities and differences between those two periods of time.

Macklem says inflation in the 1970s was also set off by global events, but became volatile and long-lasting part because the government and central bank weren’t willing to restrain spending and rise rates enough to quash inflation.

The governor says Canada has two advantages today compared to the 1970s: people expect inflation to come back down in the long run and the Bank of Canada responded forcefully this time with aggressive rate hikes. Macklem’s speech also comes come the day after Finance Minister Chrystia Freeland presented the federal government's fall economic statement, which pledged new limits on government spending as the economy slows and inflation remains high.