that some of the recovery in prices is due to supply disruption that will probably be temporary, so we should reserve judgment. the more important reason, though, is that it ’ s highly uncertain what price level will rebalance the oil market on a sustained basis. it certainly looks as though prices will not be returning to their old highs in the foreseeable future. oil companies and their suppliers and service providers have found many ways to cut costs, and this is lowering break - even prices. this means that new oil supply can come back on stream profitably – especially in us shale plays – at lower prices than before, perhaps putting a lid on further price increases. the recent pickup in oil prices is, of course, welcome, because it means a boost to canadian income for every barrel exported. but an extended period of oil prices at recent levels is unlikely to lead to greater investment spending in the canadian oil patch. indeed, market bis central bankers ’ speeches intelligence suggests there is further downside risk to investment at these still - low price levels. accordingly, this remains a potential source of downside risk to our forecast. risk 4 : will consumers rein in their spending? the fourth risk we ’ ve been giving special attention to is the possibility that canadian households might become more cautious in their spending. at the heart of this uncertainty is the high level of household debt. it is natural to expect that, at some point, households will rein in their spending and put more effort into paying down their debt. there is no evidence of this downside risk so far, however. indeed, data from the first quarter show that household spending, including big - ticket items such as motor vehicle sales and housing, has remained strong. nevertheless, we will need to remain alert for signs that this risk is emerging. low interest rates and a resilient job market have certainly helped sustain consumer spending, and the tax rate changes that the government introduced at the beginning of the year may also be playing a role. we also think spending is being supported by the impact of cheaper gasoline, since the average canadian household is spending about $ 600 less per year to fill their tank. on the other side of the ledger, the decline in the canadian dollar has raised the price of a wide range of imports. a strong consumer is, of course, a key contributor to canada ’ s strong housing market. however, a number of other factors are at play, as seen in the significant regional divergences in housing sales and prices.

stephen s poloz : summary of the latest monetary policy report opening statement ( via video ) by mr stephen s poloz, governor of the bank of canada, at the press conference following the release of the monetary policy report, toronto, ontario, 16 april 2014. * * * good morning. tiff and i are pleased to join you today by videoconference. as you know, we are in toronto to attend the funeral this afternoon of canada ’ s former finance minister, jim flaherty. before we discuss the monetary policy report, i ’ d like to say a few words about him. what set jim flaherty apart was that while he was a formidable finance minister, he was first and foremost an ordinary man. you immediately connected to him after just a few minutes, and it was immediately clear that he was there for canada, 100 per cent. that ’ s what he did all day, every day. and to everything that he did, he brought a solid dose of common sense. people found that attractive and helpful, and his gut instincts were usually right. a lot of his legacy is right there for us. i ’ ll miss him tremendously, and canada is the poorer without him. let me turn now to the mpr, which the bank published this morning. before we take your questions, allow me to note its highlights. • inflation in canada remains low. core inflation is expected to stay well below our 2 per cent target this year and it will take close to two years for it to return to the target. total cpi inflation is expected to move closer to the target in the coming quarters due to temporary factors. • let me take a moment to explain this inflation forecast. core inflation is expected to remain below target due to the effects of economic slack and heightened retail competition. we expect these effects to persist until early 2016. • however, total cpi inflation will move up this year, before core, in response to higher consumer energy prices, as well as the lower canadian dollar. • we expect total cpi inflation will remain fairly close to target throughout the projection period. that ’ s because in 2015 and into early 2016, as the upward pressure from energy prices dissipates, the downward pressure from retail competition should gradually fade and excess capacity will be falling. this will cause core inflation to make its way gradually up to 2 per cent, catching up to total cpi inflation from below. • the global economic expansion is expected to strengthen over the next three years as