Governor, we all know how hard it is to time fiscal policy or monetary policy, and monetary policy tends to operate on more of a lag, but fiscal policy, done right, is right. I think the CCB, from my view, was a timely measure introduced by our government.
I'm going to ask two questions together just so I can have the answers and not run out of time. First off, they say the Lord giveth and the Lord taketh away. There was some monetary policy that was removed through your actions. I'm just curious about the monetary transmission mechanism in terms of the time frame that we're looking at to see how the rate increases are impacting or working on the economy. With that, in your introductory comments, you talked about elasticity. We understand elasticity to a price change in terms of where household debt levels are and how there may have been a structural adjustment in terms of how households respond to changing rates.
I was wondering if you can comment, more on the latter than the former, because that is important. A small change in rates may have a larger impact than in prior years.
As for my second question, you commented about the economy operating at close to capacity, but your preferred measure for the labour market indicator demonstrates some slack. If you can square the “close to capacity”, because I think the Canadian economy has grown in capacity or output potential, and you can comment on that as well.