Finance committee  I think we all agree here around the table that there is a lot of uncertainty about the positive effects. Each individual has their own way of weighing the uncertainties, but I think there is still a consensus that the overall impact on the Canadian economy is negative. That being said, the opinions do actually diverge in terms of the magnitude of the negative impact.

Finance committee  Yes, it is certain that, for a country or a group of countries that does not produce oil, the impact is positive. In that sense, I think Canada is lucky that the U.S. is its main partner. That is where it seems the strongest real growth will be in the next two or three years. Some countries or groups of countries that do not produce oil, such as Japan, China and the eurozone, are unfortunately lagging behind, but for other reasons.

Finance committee  The falling oil prices are definitely helping them, but they are facing a whole host of other structural problems, unfortunately.

Finance committee  I think it's a bit of both. My understanding is that there's been a huge, unplanned accumulation of unsold petroleum. You hear at least anecdotal stories of ships being hired and then basically sailing around waiting for stocks to deplete. I think there is something happening on the demand side, as well.

Finance committee  As well, there has been a secular decline in the share of manufacturing and total output, but there is a big distinction between the share of output and employment. This is, I think, true across all industrialized economies. It is just a fact of life that manufacturing is enjoying productivity increases, so you can produce the same amount of stuff with fewer people.

Finance committee  Indeed. There are a couple of people on the council who have speculated about the fact that there are some countries, notably Russia and Iran, to the extent that it's not subject to sanctions, that basically have fixed requirements to meet in terms of income from royalties. The speculation is that countries like Russia and Iran might actually have a downward-sloping supply curve for oil.

Finance committee  Exactly. This certainly adds to the uncertainty.

Finance committee  I think there are structural differences. I mean, it has dropped more quickly and farther than previous oil price drops. Craig brought up OPEC. The share of OPEC's production in total world oil output has actually fallen quite a lot. Even if the Saudis wanted to clamp back on their production to drive oil prices back up, OPEC doesn't have as much of an influence on world oil prices anymore.

Finance committee  Thank you for inviting me. My comments will be based on the written submission that I sent in, which was basically the Verbatim published by the C.D. Howe Institute on March 2. Copies may have been circulated in advance. If not, the document is available on the C.D. Howe website.