Finance committee  I do. I'm saying that I think the lack of growth in new company creation during this cycle, because of the conditions we've been in, has had a disproportionate effect on younger Canadians who often enter those kinds of jobs. The good news, if I may complete that thought, is that we've seen a sudden increase in the population of companies in 2013 that is very encouraging.

Finance committee  Yes, that's correct. We have growth in credit that has slowed quite dramatically overall. It's now at a point where it's roughly keeping pace with growth in income. Under our forecast what we'd expect to see is that this trend would remain in place and that total income would be growing as employment gathers pace.

Finance committee  Indeed, such infrastructure investment is what a free trade deal is. It really is a fundamental shift in the landscape, which is very positive for trade, and the effects accumulate over a very long time. We don't have a way to incorporate those kinds of changes in our outlook, except to guess that they would be positive.

Finance committee  Yes, in the sense that, during this past cycle, we saw very clearly that the traditional concentration of Canadian trade with the U.S., and the outsized cycle the U.S. economy went through, exposed us very much to that trade impact. The response of Canadian companies has been to work harder to diversify their export base, particularly to emerging markets, which are the faster-growing customer bases available to them.

Finance committee  Well, I think I should offer a brief remark on this, since it's really not a monetary policy issue but more of a fundamental economic one on which the government has others more qualified to speak. But I am a free trader. I wake up in the morning believing that free trade is good, that competition is good, and that having access to markets is very good.

Finance committee  We have a new series with a new design based on a frontiers theme, which was developed in consultation with a large number of Canadians over a long period of time. It is what it is today. As you know, we are now thinking about the next series, which is a multi-year project, and we're open to all suggestions from all Canadians.

Finance committee  I'll begin with some general remarks and then perhaps pass the floor to my colleague Tiff. He gave an excellent speech on this topic just a couple of weeks ago at the Economic Club in Toronto. When you use your model to construct these forecasts, of course you have all the data in place and a structure around them.

Finance committee  Thank you, Chair. I have a very brief opening statement. Good afternoon, everyone. Thank you very much for the opportunity for Tiff and me to be here with you today to discuss the October Monetary Policy Report, which the bank published just last week. The Bank of Canada aims to communicate our objectives openly and effectively and to stand accountable for our actions before Canadians.

Finance committee  Yes, thank you. I should start off by reminding everyone that the world has changed quite a lot in the last 20 or 30 years. Household debt today is probably not easily compared to it 20 years ago simply because the financial system has become so much more flexible—almost self-serve in nature.

Finance committee  Thank you. Let me begin with the U.S., which is largely a good-news story. Certainly in the U.S. we saw very rapid efforts to liquefy the financial system, a very fast response by policy-makers, which meant that unlike in other countries, all the damage was done at the beginning and then the healing process began very rapidly.

Finance committee  The crisis certainly affected our banking system profoundly. The system is quite complex and it is actually getting more complex by the day. We need a collaborative system where the rules are almost voluntary, given that everyone wants the system to be more robust. That is everyone's goal, including the banks.

Finance committee  Certainly. Thank you. Yes, Japan is a pretty significant trading partner for Canada. It always has been. It's become habitual, in fact, for economists to say, “Oh, and Japan has continued not to grow for 20 years or so.” But what seems to be happening now, and we're certainly watching this with intense interest, is that the new monetary policy there is directly aimed at breaking what I would call a logjam—people who've been stuck in deflation for most of their adult lives, people in their forties who have not purchased a home or something like that, just because of the way the market is dysfunctional there.

Finance committee  Thanks for reminding me of the rest of your question, Chair, which is that, yes, of course when you change your monetary policy, as they have, one of the implications with a flexible currency is that it's very likely to depreciate. And it has. So for other countries, one has to look at the full picture, which is that there's an exchange rate effect that may affect exporters in some way.

Finance committee  As I was mentioning earlier, there's a wide range of possible measures of inflation in Canada. On a longer-term basis, they all kind of settle in the same sort of area, but in the short term, they can be quite different. In particular, the CPI can be heavily influenced by major movements in, let's say, gasoline prices, or food prices.

Finance committee  Thank you for the question. As I mentioned earlier, the Bank of Canada is a team player. Other team members are the Department of Finance, the Office of the Superintendent of Financial Institutions and the Canada Deposit Insurance Corporation. As part of that team, the Bank of Canada has two roles to play.