at 2 per cent, the midpoint of a 1 to 3 per cent target range. let me stress a few points about our inflation - targeting system. first, our commitment to inflation control is the best way that the bank of canada can contribute to high sustainable growth of output and employment. in other words, inflation targeting is a means to an end, not an end in itself. the second key point is that we operate in a symmetric way. we care just as much about inflation falling below target as we do about inflation rising above target. if demand for goods and services pushes the canadian economy against the limits of its capacity, and inflation is poised to rise above the target, the bank will raise interest rates to cool off the economy. and when the economy is operating below its production capacity, and inflation is poised to fall below the target, the bank will lower interest rates to stimulate growth. finally, inflation targeting is very important in terms of the bank ’ s accountability to the canadian public. if inflation persistently deviates from the target, we must explain why this has happened, what we intend to do to bring inflation back on track, and how long we expect the process to take. with the adoption of inflation targets, we have gained all the expected benefits, and even gained some that we weren ’ t expecting! let me list some of them. inflation has become more stable, averaging very close to 2 per cent, and private sector inflation expectations have become well anchored. importantly, our symmetric approach has also worked as an economic stabilizer, helping to smooth the peaks and valleys of the business cycle. businesses and individuals can make long - term economic plans with increased confidence about the future. and scarce economic resources are no longer wasted in efforts to hedge against the threat of either high inflation or deflation. moreover, with inflationary expectations well anchored, we have found that movements in the exchange rate have much less impact on inflation than in the past. this is because markets know that the central bank is committed to protecting the domestic value of the canadian dollar. because we have a clear objective, and because we explain publicly how we plan to meet that objective, financial markets can now better predict how the bank will react to different circumstances. at the same time, inflation targeting has brought increased discipline and clarity to policy deliberations inside the bank. let me make two more points about our inflation - targeting framework. first, our experience with inflation targets has also allowed us to see the importance of having an

##217 will add value in terms of the proposed additional financial reporting. we certainly can provide that additional information but, in our view, it is not evident that providing that information would satisfy a cost - benefit analysis. the bank of canada is not a commercial enterprise. our balance sheet is structured to enable us to carry out two main responsibilities : the conduct of monetary policy and activities related to our role as lender of last resort. in terms of revenues and expenses, in 2006, we remitted $ 1. 9 billion to the government through seigniorage. in the same year, our operating expenses were $ 264 million. it is not evident that providing, for example, a cash - flow statement or statement of retained earnings would contribute to meeting the objectives of bill s - 217. in summary, the bank of canada very much supports the objectives of this bill : the promotion of sound financial management, openness, and accountability. as the bill says, " canadian taxpayers need to feel confident that public monies are being managed prudently. " what is not self - evident in the case of the bank of canada, given our mandate, is whether the benefits of providing the additional information outweigh the costs. this bis review is available on the bis website at www. bis. org.