john murray : stepping outside – analysing the canadian economy from an international perspective remarks by mr john murray, deputy governor of the bank of canada, presented to the victoria chapters of the certified management accountants, certified general accountants and the financial management institute, victoria, british columbia, 6 march 2014. * * * accompanying charts can be found at the end of the speech. introduction good morning. thank you for the invitation to address your workshop. one of my responsibilities as a deputy governor of the bank of canada is overseeing the bank ’ s analysis of international economic developments. and before i became a deputy governor, i was chief of the bank ’ s international department. so over the years, i have had the opportunity to study other economies and the policies of other governments and central banks in some detail. looking at canadian economic issues from an international perspective allows us to ask : how are we the same? how are we different? there is often a benefit to looking outward, examining developments beyond our borders as an aid to diagnosing and addressing suspected policy puzzles and problems at home. at the same time, we must be careful not to assume that what has happened elsewhere will necessarily happen here. canada ’ s superior economic performance during the financial crisis and through the subsequent recovery, relative to that of most other advanced economies, was due in no small part to the bank of canada ’ s success in controlling inflation and the credibility that it has earned since 1991, when we adopted our inflation - targeting monetary policy ( chart 1 and chart 2 ). 1 of course, other advantages, such as a resilient financial system and timely fiscal stimulus, also contributed importantly. however, i am not here to boast about our past successes. my purpose today is more immediate, and comes in three parts. i will begin by describing the two major macroeconomic challenges to sustainable economic growth that we are presently facing in canada. next, i will outline three analytic puzzles underlying those challenges, which we need to understand in order to formulate an appropriate monetary policy response. finally, i want to demonstrate how information gleaned from the experiences of other countries can help answer these puzzles and guide the conduct of policy here. two major macroeconomic challenges economic activity in canada has remained significantly below its potential level for some time ( chart 3 ), and the weak rates of inflation that have recently been observed are largely a reflection of this ( chart 4 ). the bank ’ s first challenge, therefore, is to return inflation to the 2

stephen s poloz : the way home – reading the economic signs remarks by mr stephen s poloz, governor of the bank of canada, to the greater charlottetown area chamber of commerce, charlottetown, prince edward island, 19 may 2015. * * * introduction good afternoon. it ’ s always a pleasure to be here in prince edward island. the confederation bridge has simplified the trip since it first opened. if you come to the island by car, you don ’ t have to navigate the waters of the northumberland strait. according to the canadian encyclopedia, the shallow waters of the strait are susceptible to strong currents, tides and turbulence. even the most skilled sailor can find it challenging to read the winds and waves, and to judge all the cross - currents. if only the canadian economy had a similar bridge. we ’ ve been on a voyage of rebuilding since the great recession. but the trip has been longer and more complicated than previous recoveries because of all the cross - currents acting on the economy. not only are the headwinds of the global financial crisis still blowing, but now we ’ re also dealing with lower prices for oil and other key commodities, which previously were a key growth engine for us. the implications for income and investment, and the adjustments they ’ re causing across sectors and regions, may take years to work themselves out. the drop in oil prices is the most recent setback for the canadian economy, but it ’ s not the first time we ’ ve had a shock that ’ s had different effects from one region to another. that ’ s what you ’ d expect in a large country that ’ s rich in diverse commodities. certainly, people working in the lobster fishery or the mussel and oyster farming sector have seen their share of challenging periods in the past. but companies have adjusted and made quality improvements that are allowing aquaculture and the fishery to strengthen as the u. s. economy recovers. at the same time, p. e. i. ’ s exports are benefiting from diversification into sectors such as aerospace and biotechnology, as well as expansion into emerging markets, particularly asia. p. e. i. ’ s experience is an example of the resilience that we ’ ve seen in the past across canada. we ’ re expecting to see it again as the economy continues on its way home, toward natural, self - sustaining, and balanced growth at full capacity. what i ’ d like to do today is talk about how the voyage is