The Globe and Mail reports in its Thursday, March 14, edition that the Canadian economy is facing a tough time due to high interest rates. The Globe's guest columnist Craig Alexander writes that the Bank of Canada, however, is determined to fight inflation with tough love. The BOC is not willing to reduce interest rates until it decisively wins the war against inflation. This decision will have significant implications. The most immediate impact of this decision is that the Canadian economy will remain weak this year. Though it seems like a soft landing is being achieved, and we have avoided a recession, the bad news is that the economy is likely to stagnate and there will be pockets of domestic weakness that will add to some of Canada's top economic challenges. The latest economic data drive home this point. While the economy managed to post meagre growth of 1 per cent at an annualized rate in the fourth quarter of 2023, the slim gain was largely the product of strong export growth that speaks to the relative economic strength of the U.S. economy. In contrast, Canadian consumer spending on a per-person basis fell and domestic demand contracted by 0.7 per cent annualized in the final quarter of last year.