Finance committee  In my work in this area, I've gone beyond.... I think the problem has become so deep-rooted that it's not a matter of changing a policy or a regulation anymore, and I'm more and more focused on how we talk to and interact with the business community. If we don't change the way in which we talk to these people, we're giving them every reason to leave and go to jurisdictions that are much more business-friendly.

Finance committee  My concern is that, yes, we're moving into an environment of much higher interest rates, but I think that's generally going to be a more negative economic environment. Yes, it's going to be more profitable to invest in bonds than to take a risk investing in greenfield projects. In that type of environment, I think it's going to be difficult to tinker at the edges with policies and taxes to get people to take more risk.

Finance committee  That's ridiculous. How does this happen? I don't know how much longer that can go on before people start voting with their feet and saying, “If not for myself, then for my children, there are better opportunities elsewhere.”

Finance committee  We are, very much so. I mean, that's what I was alluding to in my opening statement. If you look at the U.S., they were able to regard what's happened over the last 10 years as an opportunity. It was an opportunity to increase oil and gas production and at the same time lower their emissions.

Finance committee  The thing I would add is that what strikes me most when I look at the current economic environment is the very strong upward pressure we're seeing on longer-term interest rates here and in the U.S. That's an acknowledgement by investors that inflation and interest rates are going to be higher for longer.

Finance committee  I'll start briefly on that, because I think I already touched on it in one of my earlier answers. Then I'll turn the majority of time over to you. I would add, yes, but of course it's not just fiscal policy. As I mentioned, there's a wide range of government decisions that affect prices—and we should be aware of all of these—through regulations, taxes and decisions authorized by marketing supply management boards, for example.

Finance committee  It makes sense in a very simple way. The problem is that it's very hard to change supply in the short term. It takes years of investment, for example, to build more housing or to find more oil and gas. Some of these projects in the energy sector take 10 years. It's not like you can just snap your fingers and bingo, there's more supply of energy or housing tomorrow.

Finance committee  It's not just fiscal policy; there's a wide range of government actions that influence prices. Excessive regulation pushes up prices every bit as much as excess government spending. I remember that when I was at Statistics Canada in 1980, we were grappling with trying to understand inflation and how to bring it down.

Finance committee  Sure. Before I get to your question, one thing I'll add to the previous response is that just because something is given a name doesn't mean that's what the intent is. Biden has created something called the Inflation Reduction Act. It is the most inflationary source of upward pressure in prices in North America today, so just because an act is called a certain thing doesn't mean anything.

Finance committee  Thanks for inviting me back. Inflation as measured by the CPI accelerated from 2.8% in June to 3.3% in July and 4% in August. The upturn was widely expected by analysts, including those at the Bank of Canada, because of base year effects. Basically, the drop in gasoline prices last year is being replaced in the index by this summer's high gasoline prices.