just mean slower growth in gdp, it also means a reduction in the economy ’ s potential, although to a lesser extent. when you add it all up, we project the output gap will close toward the end of 2017, somewhat later than we forecast in april. the uncertainty around potential output remains high because it is not clear how much productive capacity will ultimately be rebuilt as the economy strengthens. in terms of inflation, we project it will average 2 per cent in 2017, as the output gap gradually closes. our judgment about the inflation process is supported by two staff papers published today. the first finds that wage pressures are subdued relative to historical experience, largely consistent with the existing slack in the labour market. the second focuses on structural factors that help explain recent movements in the prices of consumer energy products, food and services. finally, as usual, we see a number of risks to our inflation outlook. we judge these risks to be roughly balanced. the overall climate, however, is one of heightened uncertainty. in a context of continued weak investment at the global level, any additional uncertainty has the potential to keep businesses on the sidelines longer. not surprisingly, governing council also spent some time talking about housing. we continue to have the same concerns that we expressed in our june financial system review about household indebtedness and housing, particularly in the greater vancouver and toronto markets. the circumstances that the canadian economy is facing make the bank ’ s risk - management approach to monetary policy particularly valuable, because the types of uncertainties we see cannot readily be incorporated into projections. in light of all these considerations, the governing council maintained the target for the overnight rate at 0. 5 per cent. with that, governor poloz and i would now be happy to answer your questions. bis central bankers ’ speeches

63. m. feroli, a. k. kashyap, k. l. schoenholtz, and h. s. shin, “ market tantrums and monetary policy, ” chicago booth research paper no. 14 – 09, 2014. morgan stanley and oliver wyman blue paper, wholesale & investment banking outlook, 19 march 2015. financial stability board and basel committee on banking supervision, “ assessing the macroeconomic impact of the transition to stronger capital and liquidity requirements, ” final report of the macroeconomic assessment group, december 2010, available at http : / / www. bis. org / publ / othp12. pdf ; bank of canada, “ strengthening international capital and liquidity standards : a macroeconomic impact assessment for canada, ” special report, august 2010, available at http : / / www. bankofcanada. ca / wpcontent / uploads / 2010 / 09 / report. pdf. bis central bankers ’ speeches financial market operations and emergency lending policies. these two papers can be found on our website. 16 my colleague, deputy governor lynn patterson, will talk in detail about initiatives relating to the bank ’ s market operations in a speech in vancouver next week. let me walk you through the highlights, while stressing that you should infer nothing from these proposals for the current or future stance of monetary policy. first, the bank is proposing to reduce the amount of benchmark government bonds we buy at government bond auctions for our own balance sheet. this will help liquidity by increasing the amount of such newly issued securities that will be available to other buyers. for its part, the bank will buy some of the assets we need in the secondary market for government bonds. second, we are exploring changes to our securities - lending program. this would assist primary dealers that contribute to market liquidity but that need to borrow securities, while still encouraging the market to clear itself. finally, we intend to set up a regular program of term repo operations that will not only help us manage our balance sheet, but also give us timely insight about liquidity conditions in short - term funding markets. these steps will all help markets in normal times. but we need to be ready for when times aren ’ t so normal. we ’ re using this period of relative calm to sharpen our tools that could be used in any future periods of stress. during the crisis, the bank set up a temporary term repo facility that