stephen s poloz : release of the monetary policy report opening statement by mr stephen s poloz, governor of the bank of canada, at the press conference following the release of the monetary policy report, ottawa, ontario, 12 july 2017. * * * good morning. senior deputy governor wilkins and i are pleased to be here to answer your questions about today ’ s interest rate announcement and our monetary policy report ( mpr ). today, we raised our key policy rate by 25 basis points, in the context of an economy that is approaching full capacity and with inflation expected to reach the 2 per cent target within the next year. before we turn to your questions, let me offer some insights into the deliberations of governing council. economic data have been encouraging over the past few months, globally and especially for canada. we acknowledged this positive trend in our april mpr and in our may 24 press release, while noting concern about the sustainability of growth because of its composition, as well as us - based policy uncertainties. while uncertainties remain, delays in decision making in the united states seem to have moved some of those concerns more into the background. the bank ’ s latest business outlook survey, for example, finds very strong business sentiment, particularly for investment and hiring intentions, despite a lack of clarity about future us policies. since april, we have also seen further evidence of a broadening of growth in canada. along with stronger - than - expected growth, this has bolstered governing council ’ s confidence in the outlook for the economy and inflation. the economy is absorbing excess capacity more rapidly than we projected in april, and it now appears that the output gap will close around the end of this year. that will nevertheless leave some slack in the labour market. as output growth continues to exceed potential, we expect companies to invest in additional capacity and draw from this slack in the labour market, thereby expanding potential output further. this process is difficult to forecast but is likely to become increasingly evident as we approach full potential. this is an important reason why monetary policy is not on a predetermined path. it will remain highly datadependent as we move forward. one key indicator of progress will continue to be wage inflation, which has shown signs of a pickup in recent months but remains restrained by the lingering effects of the adjustment to low oil prices. meanwhile, inflation has continued to fluctuate in the bottom half of our target range. this has prompted a lively debate, not just

stephen s poloz : a new balance point – global trade, productivity and economic growth remarks by mr stephen s poloz, governor of the bank of canada, to the investment industry association of canada and securities industry and financial markets association, new york city, 26 april 2016. * * * i would like to thank bob fay and louis morel for their help in preparing this speech. introduction the year 2016 got off to a rough start, with plenty of financial market volatility. of course, there is no shortage of fundamental issues to worry about : another downgrade to the outlook for global growth, uncertainty about the economic transition in china, the pace of normalization in the united states, worries about europe, worries about japan, just to cite a few. financial markets have a love - hate relationship with volatility, and central bankers usually try to see through it all. but one worry i hear a lot these days hits pretty close to home – the idea that monetary policy just isn ’ t working anymore. that ’ s one myth i ’ d like to dispel right off the top. the fact is that policy actions – both monetary and fiscal – taken in the wake of the global financial crisis prevented what would have been a second great depression. but many of the negative forces that were acting then are still acting now. that ’ s why ultra - low interest rates are not causing rapid growth and inflation. if you think monetary policy is not working, ask yourself what would happen if interest rates suddenly returned to 3 or 4 per cent. most would agree that such a move would trigger a recession. this is just another way of saying that severe headwinds are still acting on our economies, years after the crisis, and low interest rates are keeping them at bay. it ’ s a bit like riding a bicycle up a steep hill. your progress may be slow, but that doesn ’ t mean your legs aren ’ t working hard or that your bicycle is broken. monetary medicine hasn ’ t cured everything, but it is working, and it has surely saved us from the worst. still, as central bankers, we need to take market anxiety, and the volatility it creates, seriously, regardless of the source. although volatility can go both ways, “ market volatility ” is usually code for “ market declines, ” which can erode consumer and business confidence and cause a weakening in economic fundamentals. so, what i would like to do today is address