Finance committee  Good morning, everyone. Once again, Senior Deputy Governor Wilkins and I are pleased to be with you to talk about the bank's monetary policy report, which we published last week. Six months ago, when we last appeared before this committee, we talked about some very positive dev

Finance committee  Our situation, as I mentioned a moment ago, is that the economy is approximately at its capacity. It is also growing at its capacity rate. Inflation is on target, and unemployment is at a 40-year low. We have all the readings we're looking for, except that interest rates are stil

Finance committee  It begins immediately for people who have floating rate mortgages, and then there are people who have two-, three- and four-year mortgages, so as we go through that, about half the people, thereabouts, have five-year mortgages. For them, it depends on when they started their mort

Finance committee  Yes, we have roughly 200 years' worth of economic history and technological change throughout that period that we can study in detail. Throughout that history, there has never been a technological change that has not created more jobs than it has destroyed. The term “creative des

Finance committee  We expect growth at the global level to moderate from what it is doing at the moment, and that's primarily because the United States has had this big bulge in growth, and quite naturally, it's at its capacity so it has to moderate. Second, because of the trade actions that have

Finance committee  I'll take a shot at that. I totally understand. We have some world-class, vibrant, global cities in Canada. Compared to other world-class, vibrant cities, they're still not very expensive. I think this is something we have to reconcile. How do people of the second generation in

Finance committee  Yes.

Finance committee  Yes, at least in certain areas of the country.... In others, it looks just like when I was young, I find. In these cities that have become, in fact, global cities, they are just going to be much more expensive to live in, just because of what they are. It's the critical mass that

Finance committee  I share your concern. I will speak for myself, but in our communications last week we sought to put more emphasis on the notion that someday we're going to be back at neutral and that neutral is 2.5% to 3.5%, so that people will begin to digest that as an approaching fact. Of cou

Finance committee  I don't have an answer in terms of dollars. I'm sorry. I think of it in percentages. Say the average on that is two to three percentage points, and that would be out of gross income, as Carolyn has mentioned, it's a significant effect.

Finance committee  That's out of gross income. It's a significant effect, but in the background over those five years, wages have been growing 2% or 2.5% per year. That's one thing. Not everybody's wage has gone up, I understand that, but they have been rising on average, so that helps the transiti

Finance committee  I guess I have a certain amount of optimism that the labour shortages are more solvable with smart policies. I feel that infrastructure will be a continuing demand through the piece. We're going to need to think in positive terms about infrastructure all the time, because we're a

Finance committee  There is, absolutely. In particular, the five-year maturity of government bond yield is used as a reference, of course, for the banks to fund themselves for five-year money, and that, therefore, is a cost to them. How much they need to, in effect, pay for a GIC for five years in

Finance committee  They both affect it. If U.S. rates were unchanged and we raised our interest rate—as we did last week—and if part of that feeds through to longer-term interest rates, that will be immediately fed back into the cost of funding for the banks, as I've just described. That channel wo

Finance committee  Yes, but the experiment you're describing is a little bit artificial because it's a global bond market. If it did happen the way you described it, it would normally be because inflation in country A went up and therefore all of its bond yields went up, and that would for sure pas