Finance committee  That is another good question. You are quite right. Weak productivity in Canada is decreasing our potential growth rate, the wealth of Canadians and both federal and provincial budgetary revenues. The question is knowing how to increase the growth rate for each sector in Canada.

Finance committee  You're right. We're aware of this challenge. There are different segments of the population. There's a large segment of the population who carry some debt for which it is not a problem, but there is a higher proportion of what we would call vulnerable Canadians than there have been in the past.

Finance committee  Thank you for the question. I wouldn't use that term. With respect to the level of house prices, I would note that there are local markets in housing. I'm going to come back to that. Overall, the level of house price valuations across Canada is about four and three quarters times income.

Finance committee  Not publicly.

Finance committee  First, thank you for reading my speech. It puts you in very select company, I must say. And thank you for the question, because you're absolutely right, in our opinion this is a critical issue and a critical economic challenge for Canada. To provide a bit more context here, as noted in that speech, 85% of our exports go to slow-growing advanced economies.

Finance committee  Thank you for the question. First a couple of points of context. Income inequality in Canada has increased, as it has for all OECD countries, over the course of the last two decades. That said, Canada is in sort of the middle tier as measured in the degree of income inequality.

Finance committee  That's obviously a question for the committee to consider. What I would underscore is that the forces behind this phenomenon affect all major economies. They are longer-term forces, not short-term cyclical forces. Understanding those, and designing policies that address them constructively, is a challenge that all major advanced economies face.

Finance committee  We meet today in an environment where there is certainly enhanced scrutiny by investors on the fiscal positions of all governments: federal, provincial, advanced economy or emerging markets. A premium is placed on fiscal sustainability. That means credible paths back to a budget balance level that is consistent with a sustainable level of debt.

Finance committee  Thank you. Just as one point of clarification, if I may, we didn't say that the levels of household debt are unsustainably high. We were talking about a dynamic in one of the technical boxes of a steady increase in home equity lines of credit. That's an unsustainable dynamic over time that is going to reach a new equilibrium and move from there.

Finance committee  New debt is locking in. The question is whether existing debt is similarly doing the same. Yes.

Finance committee  I assure the member that authorities—the bank, the superintendent, CMHC, and the Government of Canada—are cooperating closely and monitoring the situation. As I referred to in my earlier remarks, a number of measures have been taken, both by the superintendent and by the government.

Finance committee  Thank you very much, Chair. Good afternoon, members. Tiff and I are very pleased to be with you today to discuss our April monetary policy report, which the bank published last week. In it we note that the profile for global growth has improved since the bank released its January MPR.

Finance committee  I would say that there are deeper fundamental causes of the situation in Europe that have built up over a number of years that can only be resolved over a number of years. That is why the measures that the European authorities are putting in place must have that time horizon, so they can facilitate those adjustments in those economies, while at the same time the Europeans reconstruct or “re-found”, to use our terminology, the monetary union and how it works, so that they don't fall back into this situation a decade or two decades hence.

Finance committee  To explain the difficult situation in Europe, one has to go back to the functioning of the European Monetary Union. In effect, a number of countries in the so-called periphery, although they are some of the affected countries--particularly Portugal, Greece, and Spain specifically--ran very large current account deficits within the monetary union.

Finance committee  Thank you for that. On the first question with respect to Europe, what we have said, and it's still relevant, is that we expect the measures to contain the situation, but there are clear downside risks to that assumption. When we first said that we didn't have the actual plan, but we expected to have something similar to what was announced.