Finance committee  The short answer is that I can't give you a precise estimate of that. There are two elements of the shortfall that are important. I can give you a written answer using the back-of-the-envelope calculations that are supplied in the budget forecast. The sensitivities, as you are aware, are supplied in the budget when it's released, to both the level of GDP growth and the level of GDP inflation—although I think that CPI inflation is what is actually used.

Finance committee  Thank you very much, Chair, and thanks to the members of the committee for making the time to discuss our January monetary policy report. It's an important time in our economy. I'll start by saying that while the global economic outlook is slightly weaker than the bank had projected in our October MPR, importantly, global tail risks have diminished.

Finance committee  Okay. It's our pleasure.

Finance committee  I think that's a good operating principle. We always have to examine the status quo and see how we can continually improve. In fact, in a competitive world, we find that you almost level-peg as a result of doing that, and you're running to stand still. The question is how we can further advance.

Finance committee  Yes, these are areas that need, as I said at the outset, to constantly be evaluated. Some of the good work that has been done on a provincial level has helped in this regard. There have been provincial agreements between, for example, B.C. and Alberta that have proved to be a successor to TILMA .

Finance committee  I want to start by pointing out that we do not agree with a projection that includes an increase in the output gap by the end of 2014. Here in Canada, there are two macroeconomic policies, and in particular monetary policy. So we could adjust, if that were the case. If that were the probability, there would be a reaction, via monetary policy, to narrow the gap between the policies, that is, there would be monetary easing.

Finance committee  Thank you. First, with respect to quantitative easing, we have in the report, as I'm sure you saw in box 1 on page 6 in the English text—I think it's page 7 en français—a technical box that goes through the implications of, in effect, QE3. It's called “U.S. Monetary Policy Developments”.

Finance committee  Operating in an environment of uncertainty, the best thing we can do is provide the maximum amount of certainty about as many aspects as possible. It starts with macro policy, goes to regulation, and goes to the structure of structural policy. There is some advantage for consideration.

Finance committee  Yes, and there are other measures that could be like that. The last thing I will say, and it is for firms to decide, is that what we do have in Canada are tremendous opportunities that don't necessarily exist elsewhere. We have an opportunity to boost productivity, to build market share in major emerging markets, and to take advantage of the strong Canadian dollar to buy machinery and equipment.

Finance committee  I'm not sure I have quite enough information to answer that question at this stage. If we drop it down another level....

Finance committee  It seems to be an issue that in other venues you might discuss, but I'm not sure that it affects the conduct of monetary policy, if I may answer that way.

Finance committee  I'll give you a general answer that goes back to the question Mr. Adler asked. In terms of financial reform, and the example was on derivatives but there are other examples, there are some initiatives that we're hoping are going to come out next week —I don't want to pre-judge the G-20—that relate to enhanced disclosure of financial institutions, related to their risk profiles, the business models, and other aspects.

Finance committee  Thank you.

Finance committee  As you are aware, the important aspect here is that the first responsibility of monetary policy is the achievement of the inflation target, it's inflation. With respect to issues around household debt, there are several lines of defence. They start with the individual and the institutions lending to those individuals.

Finance committee  First, the rate of growth in household debt has declined. That is a confirmed fact. Second, as we were discussing with Mr. Van Kesteren, on four occasions, the government has implemented significant measures to tighten CMHC's mortgage insurance rules. That said, we have to continue to be vigilant.