Our analysis is that given the shocks we've incorporated into our projection, the economy has slower growth and a larger output gap for longer. That longer period takes us out to the middle of 2018.
On the one side we'd say that's unfortunate. We thought just a few months ago that by the end of 2017 we would be back at full capacity. So adding, say, two quarters onto that process means a longer period of time where someone may be out of a job. It increases the side effects, the scarring, or the loss of skill sets, and so on. We know that's not without cost.
We also must ask ourselves what is the complexity of the trade-off and when is it appropriate to try to speed it up? As we said last week, we actively discussed the possibility of cutting interest rates a little further at this time to try to speed up that process, and given the uncertainties that we're facing, we decided we were best to hold where we are.
When I say uncertainty, I don't necessarily mean something bad. It's just that some things are not as concrete today as they might be in a short time. For instance, a lot of companies mention that the U.S. election is giving them uncertainty about the future. Whether it's about their investment plans, NAFTA, or whatever, it doesn't really matter which candidate ends up winning, there's uncertainty. There's a natural tendency both in the United States and in Canada to delay those kinds of decisions.
It's possible, therefore, that when the election is over some of that uncertainty will be lifted and that would be a positive. It's not all one way. But in that context, we decided the uncertainties were sufficient, that we should watch the export data a little longer and make ourselves more confident in that.