The 3% level that we have assumed in our base case is consistent with the Bank of Canada's estimate of its policy rate when inflation is at its target, when the economy is at its potential capacity, and when there aren't any temporary shocks.
In putting this together, essentially we've looked at the Bank of Canada's monetary policy report and at current levels of interest rates. We know, according to the bank, that inflation will be at its target in, I think, the first half of 2018. The economy will essentially be at its productive capacity or potential output. I don't think the bank has flagged any temporary shocks, so, implicitly underlying the Bank of Canada's forecast, our conclusion is that interest rates are going back up to 3%. They're the ones who set the policy rate, and if their judgment is that 3% is the right number, we're going to take them at their word and that will be in our forecast.
Of course there will be shocks, going ahead. Some of our underlying assumptions won't pan out, and interest rates could be higher or lower than we're projecting on our way to 3%, or its neutral rate. It would obviously be helpful if the Bank of Canada were to publish its policy rate path, going forward, but you can read between the lines. It's clearly indicated in the report that 3% is what they believe is consistent when inflation is at its target and the economy is at its productive capacity or potential output.