I'm going to get two minutes. You've been busy, Monsieur Bernier.
I'll mention a couple of things very rapidly; we can have a deeper discussion later.
First, as you referenced, there's a very clear accountability framework for the Bank of Canada. The 2% inflation target is an agreement with the Government of Canada. It runs through 2011, and I would say that since the inception of that agreement in the early 1990s, inflation in Canada, as it's tracked, has averaged exactly on that 2%. So the agreement has been fulfilled. It's important in times like this, where there are some disinflationary pressures, that Canadians have the confidence that inflation will be at that. Those expectations remain.
Let me make a very important point in the current environment. The fact that Canadians can expect, in the medium term, that inflation will be at 2% helps to bring negative real interest rates at very low interest rates at the moment. But I absolutely agree that your calculations are correct: they're based on our calculator, so they'd better be correct. This is a political economy decision. We're doing a lot of research on this, whether it would be better to have a lower target. We will come back to this committee to discuss that research at the appropriate time.
You used depreciation of the currency, and the one thing I want to flag on that is that what is relevant for exports and competitiveness is the real effective exchange rate, which is a product of where the actual headline nominal exchange rate is, and relative inflation rates in countries. So it matters what the inflation rate is in, say, the U.S. relative to Canada.
The last point I'd like to make is on M1 growth in Canada. What's important in this time of crisis--and always important--is the relationship between the narrow monetary aggregates and the broader monetary aggregates. What you're seeing in a variety of other countries is that the velocity of money has shrunk and so the broader monetary aggregates--the credit aggregates--are not growing, even though the monetary base is growing. The issue is to repair those linkages in Canada. You still have a more stable relationship and it's relevant to Monsieur Mulcair's question in terms of the medium term.
My last point is that one thing that has turned in the last month or so is that M1 growth is now above nominal GDP growth globally, which is normally a precursor of expansion.
Thank you.