Thank you, and welcome, I guess, to the committee. It's not my place to welcome you, but thank you for having me.
The comments of August 19 relate to, as you know, the important contribution that the stimulus did make to GDP during a very difficult time in the global economy. Up to one-third of the growth in 2009-10 was contributed by direct government spending. Of course, that is from all levels of government—federal, provincial, and municipal—as there were sizeable stimulus programs put in place at all levels of government. They were timely and they had an impact.
Obviously, there are medium- and longer-term requirements for fiscal sustainability. We are seeing that around the world. Those constraints are binding, in many cases, in many advanced economies. In fact, in most advanced economies there are greater constraints on fiscal flexibility than there is actual or de facto flexibility.
I would note that when we look out to the projection, our expectations for the contribution of government are for quite mild fiscal drag. So the actual government spending, the actual program spending, the net spending of government, takes off about 0.1% of GDP growth in 2012. So while there is a drag, it is not the determinative factor in terms of the slowing of the Canadian economy relative to our previous projection. What is determinative is the global situation that is putting additional pressure on exports, which, in our view, is having an impact and will continue to have an impact on the confidence of households and on the margin of confidence of business and, therefore, on household and business expenditures, particularly investment by businesses. So it's within that context that we see the slowing, as opposed to a rapid slowing in direct government expenditure in this country.