Finance committee  The governor has talked about initiatives on the financial side. On the real side of the economy, an area that we need to continue to put focus on is the removal of interprovincial trade barriers. I really do think that is an issue that--although we've made some progress on it--c

Finance committee  Perhaps I can lead off in response to the question. I think one of the very impressive attributes of the Canadian economy that we've seen over the last five to ten years has been the flexibility in the Canadian economy, including in the labour market, where we've actually been

Finance committee  No, it's okay.

Finance committee  In response to your question, Mr. McKay, it's worthwhile to go back to the governor's opening statement about how we currently see things. We have a flexible exchange rate regime that is part of our inflation control framework, and we look at the exchange rate through that prism.

Finance committee  Perhaps I can add something. First, we can see that the Canadian economy has a number of things going for it. Commodity prices are a little higher in all regions. The level of business and household confidence is also higher than a year ago. With the gains in and the changes to

Finance committee  It is only an assumption.

Finance committee  I'd like to make a brief comment. Our forecasts are based on the fiscal policies that governments have clearly announced.

Finance committee  No. In the context of the overall framework for monetary policy, one of the real advantages of our inflation-targeting framework is that we are forward looking. Therefore, when you see an output gap of the size we're currently facing in Canada, it is for that reason that we've ea

Finance committee  It's 0.25%.

Finance committee  Certainly from our business outlook surveys across the country, it's fairly clear that the companies we've surveyed have moved from a position of looking for labour, i.e. a shortage of skilled labour, to a situation where there is an excess. From that point of view, coming back t

Finance committee  In general terms, the numbers, in terms of average hourly wage increases you get from Statistics Canada, are still growing at a rate of around 3% or 3.5%. Given the increase in unemployment, one would have thought you might have seen some of those wage increases coming down from

Finance committee  No, indeed, they are directly linked. The box you referred to is a box that discusses some of the implications for the trend growth of the economy, the potential growth for the economy, as a result of some of the structural changes that are taking place. The capacity issue you r

Finance committee  There are other techniques that can be used to achieve a neutral impact. For example, we could think of the indices. There are techniques that a central bank can use to achieve a neutral impact.

Finance committee  If I might add a quick comment on your very first observation regarding the statement to keep interest rates low for the period out to June 2010, it is a conditional commitment based on the projection of inflation—and that is important. But you're absolutely right that the object

Finance committee  First of all, monetary policy is a national policy, one that applies to the country as a whole. However, we do have regional offices that survey local businesses in the context of our analysis of the Canadian economy. So we use our offices as a direct source of information in the