The Financial Post reports in its Saturday edition that Bank of Canada Governor Tiff Macklem warns that a prolonged trade war with the U.S. will have structural effects on the Canadian economy, preventing a rebound. The Post's Joe Castaldo writes that Mr. Macklem said in a speech, "If tariffs are long-lasting and broad-based, there won't be a bounce back." In its Jan. 29 interest rate announcement, the BOC projected that a prolonged trade war with the U.S. could reduce Canada's GDP by 2.5 per cent within the first year. On Friday, Mr. Macklem noted that, based on President Donald Trump's Feb. 1 executive order, investment in the Canadian economy would decline by 12 per cent and Canadian exports would fall by 8.5 per cent after the first year. He said: "Lower export revenues would reduce household income. And retaliatory tariffs would raise the prices of many consumer goods." In the same scenario, the BOC estimates consumption would decline by more than 2 per cent by mid-2027 and Canadian output would fall by nearly 3 per cent over two years. Mr. Macklem argued the only way to offset trade conflict with the U.S., or what he calls a "negative structural change," is to bring forth positive policies to address it.