demographics, not the product of the crisis. the more important question is whether any of the problems we see today will become permanent. this question is relevant at the global level, but let me illustrate it with direct reference to our own situation here in canada. historically, a typical recession / recovery cycle has taken a couple of years to complete. during the recession – let ’ s say it originates with a drop in export demand – companies cut back production, lay off workers, and investment and consumption spending fall. monetary and fiscal policies respond, exports recover, companies rehire their workers and move production back to normal. but this cycle has not been a typical one. the downturn was deep and has proved to be long lasting. canada ’ s export sector not only cut back on production and laid off workers, many companies restructured, many simply disappeared. recent bank of canada research on exporters sifted through more than 2, 000 categories of underperforming, non - energy exports. we found that the value of exports from about a quarter of them has fallen by more than 75 per cent since the year 2000. had the exports of these products instead risen in line with foreign demand, they would have contributed about $ 30 billion in additional exports last year. by correlating these findings with media reports, we found that many were affected by factory closures or other restructurings. obviously, not all of this can be blamed on the financial crisis and the ensuing downturn, but for companies that were already struggling with competitiveness, the crisis surely accelerated things. the point is, when companies downsize, relocate or close their doors, the effects on the economy are permanent. those specific lost exports will not recover – something else is more likely to take their place, but that requires that surviving companies expand, or new exporting companies be created. and both such processes are bound to be much slower than in the typical recession / recovery scenario. a destructive downturn also creates long - lasting effects in our labour market, since the associated jobs are lost permanently. we have recovered well from the employment losses during the downturn, but our labour market has not yet returned fully to normal. indeed, labour conditions in canada point to material slack in the economy. we have been creating jobs at a trend rate of less than 1 per cent, well below what one would expect from an economy that is recovering. furthermore, much of the recent employment growth has been part time. there are over 900, 000 people

decisions about the future, the bank must rely heavily on economic forecasting. in addition, the impacts of bank decisions are complex and uncertain. much like a business that faces many unknowns when deciding to adopt a new technology, the bank also must make choices in the face of considerable uncertainty. this is why it's important to have good information and good advice. to get the best possible understanding of the economic situation, governing council members have access to an extremely large number of datasets, analyses and points of view. when i'm asked to summarize the work of a deputy governor, i often say that i am a big aggregator of information. i am part of a team whose job is to put together all the pieces of the puzzle to inform our decision - making. today, i'd like to explain to you what that means in concrete terms. every year, the bank makes eight monetary policy decisions. that means eight times a year, the bank must decide whether it will raise, maintain or lower the policy interest rate. four of the eight decisions are accompanied by the monetary policy report ( mpr ), published most recently in july. the mpr examines the global and canadian economies in terms of production, spending, the labour market and, of course, inflation. it also includes the bank's projections for growth and inflation and the risks to the projection over a two - year period. 2 / 7 bis - central bankers'speeches the decision - making process begins about a month before the announcement date, when bank staff present an economic projection to governing council. we call this case a. it draws on the bank's macroeconomic models and surveys, its analysis of various sectors and components of the economy, and its assessment of financial stability and financial market activity. since we don't have a crystal ball, we draw on the latest data and use our projection models to look into the future. 1 for several hours, governing council members debate the assumptions and risks to the projection as well as alternative case scenarios prepared by staff. about 10 days later, bank advisors and economists present case b, a revised projection incorporating the comments of governing council members and, if any, new developments that occurred since case a. we draw on that projection to make our policy rate decision. when there is a rate announcement without an accompanying mpr - as was the case two weeks ago - many of the same steps are involved, although staff do not make new projections. they report on new