Finance committee  Just a few words. You asked us what the cause was of the current situation. One of the causes is the current global trade imbalance between China, for example, and the industrialized nations. In a way, this is a global crisis. The effects on each country are part of the current s

Finance committee  First of all, do not forget that Ontario and Quebec represent, roughly speaking, 60% of the Canadian economy. With regard to our monetary policy, with a lower inflation rate in Ontario and Quebec, the weighting of the activity in these two provinces is very important. It is the a

Finance committee  It is a consequence of the inflation rate here, in Canada.

Finance committee  Yes, there is a difference. If I remember correctly, the rate of increase for the CPI in Western Canada was of between 3 and 3.5%, because of the robust housing price increase, which is included in the CPI. In Ontario and Quebec, the CPI rate of increase — I could get my hands on

Finance committee  Let's go back to the basic question. The original question was around the sensitivity analysis that was presented in the budget documents. That sensitivity analysis is in terms of nominal GDP growth, and the question that was asked was in terms of our real growth and whether it c

Finance committee  That's a very good question. It comes back to a theme we were talking about earlier. The domestic demand that we're seeing in the Canadian economy is going to be the main driver, if you like, as we look out over this three-year period. As to the growth rates that you were quotin

Finance committee  In a sense, yes. As the governor mentioned, the productivity growth rate and the potential growth rate for the Canadian economy are very important elements with regard to the implementation of the monetary policy. The medium and long term trends impact upon the potential growth r

Finance committee  Could I add one additional comment, tying in with your previous question? One of the advantages of having more flexibility, which you gain by removing these interprovincial trade barriers, is that your economy can respond to economic shocks more quickly, and therefore you can att

Finance committee  I might add a few details. In our predictions for the Canadian economy, we underscore two major international factors. There is, first, the weakness of the American economy, as you mentioned, but there is also a positive force. Indeed, the demand for core products is strong. It i

Finance committee  Yes, in the sense that the price of gas is very high. With regard to the growth rate of the all-items CPI, there are several elements that are going down. In our report, we underscore the fact that within the CPI the growth rate in the price of services is of roughly 3%, but that

Industry committee  Absolutely, manufacturing employment has been down. The reverse happened following the Asian crisis, where the weakness of commodity prices and the weakness of the Canadian dollar at that time led to a massive increase in employment and production in the manufacturing sector. I c

Industry committee  Again, that's a very good and complicated question, in terms of a response. Quickly, first of all, on the United States side, what we've seen is a combination of the developments in the subprime mortgage market that you've talked about and a period where the lending through the

Industry committee  I'm afraid I really can't answer that question. I'm loath to comment on individual financial institutions. I think what is important here is that we recognize the size of the losses that are taking place; that financial institutions, whether they're American or otherwise, in reco

Industry committee  We have one tool at our disposal, which is interest rates, and we use that tool to achieve our objective, which is our 2% inflation target. We believe by doing that we provide the best support for the Canadian economy overall.

Industry committee  We do. You're absolutely right, the exchange rate is a very critical price in the Canadian economy. There's no question about that, so we do pay very close attention to that, but we do not target the exchange rate. The exchange rate moves around in response to many factors. It mo