Finance committee  When you look at our poor productivity performance, it's also sort of matched with whatever kind of wage inflation we're seeing. At the end of the day, what drives the inflation process is not any particular pace of wage inflation but the extent to which it's above and beyond the pace of productivity.

Finance committee  When you look at the global picture and at the extent to which governments around the world provided support for their economies, Canada and the United States, for example, were near the top of that support, which I suspect helped in how quickly we recovered. Of course, restrictions in Canada were a bit longer lasting than those in a lot of other jurisdictions, so we may not have seen that yet in the numbers.

Finance committee  Part of the reason we ended up with such a frothy housing market was that we were getting an increasing role of investors—not people who were making homeowner-occupied purchases but people who were doing that as an investment, either to sell it down the road or to rent it out, or whatever the case might be.

Finance committee  Honestly, when individuals are making their investments and are looking at opportunities down the road, clearly anything, I think, in the sphere of taking advantage of this transition we are going to make to zero carbon, zero neutral, neutral carbon, is going to be.... A lot of the activity...a lot of the resources in the economy are being diverted over time.

Finance committee  These are as of the fourth quarter of 2022.

Finance committee  I'm not that familiar with that particular aspect of the mortgage market. Therefore, I can't really comment on that.

Finance committee  The 2% was in reference to headline inflation over the last three months. If you want to really compare apples to apples, you're looking at around a 3% pace in Canada for core inflation, versus around 5% in the U.S. There's definitely more stubbornness on U.S. inflation. That is reflective of—

Finance committee  It's partly a definition. However, you also have more rapid wage inflation in the United States, and U.S. households have actually begun to tap their accumulated excess savings. They're continuing to spend in the face of higher inflation, which is not the case for Canadian households.

Finance committee  The Inflation Reduction Act—and, to your point, the name is a bit of a misnomer—over time does contribute to deficit reduction, and from that perspective it could be disinflationary. Part of the Inflation Reduction Act deals with keeping health care affordable, which, of course, helps keep inflation down, particularly health care costs.

Finance committee  That's a hypothetical question. I really can't comment on that.

Finance committee  It depends on what it's being spent on. Any money that's spent on improving the capital stock and improving productivity actually helps the inflation dynamics over the long haul. As my colleague, Mr. Jean, said, it depends on what policies are currently being practised.

Finance committee  Obviously, the market is weakening off. Prices are falling. Activity is falling, and that will likely continue. However, again, we're not seeing a lot of “For Sale” signs. Listings are falling alongside a lower demand for homes. It's almost like a balanced situation as we move to lower, more affordable prices.

Finance committee  It's unclear where the bulk of those funds is sitting. I suspect that as these excess savings are being accumulated, some of them end up becoming permanent savings, that is, not available to be spent on a ready basis, either invested in financial markets or in housing. However, it's not clear how much of that is actually—

Finance committee  The way that amount of $350 billion is calculated is that before the pandemic, Canadians were saving roughly 2.5% of their income. The moment we hit the pandemic, the savings rate went well above that.

Finance committee  I'm always concerned when the economy looks like it may be headed to a downturn. You know, there is always some fallout from that. There always is when there's a downturn. The good news is that the downturn is going to be mild by historical standards. To put that in a bit of context, we officially are looking for negative growth in the second and third quarters of this year, but a peak to trough of just about two- to three-tenths in terms of net decline in GDP.