By Paul Vieira 

OTTAWA -- Tepid global growth and historically low interest rates are going to be the norm for the foreseeable future, Bank of Canada Gov. Stephen Poloz said Thursday.

Mr. Poloz said near-term global economic risks are tilted to the downside, according to prepared remarks for a speech in Toronto. He said trade conflicts and the emergence of populist governments in the developed world "threaten to reverse some of the prior productivity gains made through globalization."

Tariffs on imported goods are forcing companies create new supply chains that aren't as efficient, he said.

His remarks, which focused on a big-picture outlook for the global economy and the central bank's agenda in 2020, largely avoided commentary on Canada's short-term economic outlook.

Last week, the Bank of Canada kept its main interest rate unchanged at 1.75%, and a bank's senior official said the economy's resilience allowed it to chart its own course while other central banks have cut rates.

Mr. Poloz said uncertainty over future trade policies and institutions such as the World Trade Organization "is having a more insidious effect" because companies are scaling back capital expenditures.

"On balance, then, it looks like the global economy is set for continued slow economic growth for mostly structural reasons," he said. "For these same reasons, this means low interest rates are likely to persist too." He said this shouldn't be interpreted as a prediction about the Bank of Canada's policy rate.

Mr. Poloz's comments came as Canada, the U.S. and Mexico agreed on a freshly revised version of a North American trade deal, now known as the U.S.-Mexico-Canada Agreement, or USMCA. Some of Canada's opposition parties have criticized the latest version of the pact, mostly because of potential negative impacts for the country's aluminum sector. The governing Liberals hold a minority of seats in the legislature, so it will require support from another party to get USMCA ratified.

Earlier Thursday, President Trump said in a tweet that the U.S. and China were close on a deal on trade. "They want it and so do we," he wrote.

Mr. Poloz said last week he wouldn't seek a second term as governor of the central bank. He is set to leave his current post on June 2.

Write to Paul Vieira at paul.vieira@wsj.com

(END) Dow Jones Newswires

December 12, 2019 13:38 ET (18:38 GMT)