Read more: Canada sees huge October jobs surge

Inflation would be eased by growth in the total number of potential and active employees nationwide, Macklem added.

October labour figures are a possible indication that this growth is already underway, with the addition of more than 100,000 jobs last month while unemployment held steady at 5.2%.

The federal government’s boosted immigration targets, with 500,000 people to arrive from outside Canada annually by 2025, will also help with the rebalancing, Macklem said.

However, the governor said that these policies will still need to act in concert with the central bank’s interest rate hikes if inflation is to be truly moderated.