Welcome Governor and Deputy Governor.
I would like to start off with a couple of comments. It's going to be a three-part question, if I can get it and your response in within the full seven minutes.
First of all, congratulations on the agreement, the policy statement on inflation targeting, going for another five years. Sending price stability to the market is very important for decision-makers, whether you're a saver or investor, and putting capital to work. It's important to know that's in place. So congratulations on that.
My first question deals with fiscal policy.
Governor, in your September 20 speech, “Living with Lower for Longer”, if I can quote you, it says here on policy prescriptions:
One important impediment to business growth that is widely shared globally is weak infrastructure. We know that infrastructure projects spur growth in the short term by boosting demand. More importantly, infrastructure projects can support long-term growth by raising an economy’s potential output.
With that statement from your September 20 speech, and really where monetary policy has done a lot of heavy lifting here in Canada.... The monetary policy transmission mechanism has worked very well here in Canada over the last number of years, but it's time for fiscal policy to take over, in my view. I would love to hear your wise words on that. That's part one.
The second part is to deal with two themes that have been identified in the deputy governor's speech in London that were re-emphasized in the monetary policy report that you've touched on, Governor. One has to do with labour supply, not labour participation rates, because they've held steady if you look from 1976 to now. The other one is productivity/competitiveness.
The labour supply we can deal with it with immigration. I think there's a solution there on the labour supply front, the labour growth rate. On the competitive front, on page 15 of the monetary policy report, there are a number of things that are concerning about our competitiveness and headwinds that are restraining export growth. I would appreciate some feedback on what fiscal policy or policy measures you think we may need to look at in terms of strengthening our ability there.
The third and final part is to deal with some ratios. We widely are given the 170% number for debt to disposable income, but if I look at the Stats Canada report where that number is provided, there are a number of measures on net worth of Canadians that we don't talk about. I'm somewhat, not concerned, but it raises a question on which side of the balance sheet we're looking, because if we look at financial asset ratios, Canadians are generally wealthier than they have ever been. There's a lot more net worth there. If I can get my iPad to open, I could pull them up.
I would like to get your take on the balance of looking at this one ratio, but in that same Stats Canada report, a number of other ratios point to a different picture of how the consumer is doing.
Those are the three questions.