then it has been growing at a much more modest pace, closer to the rate of gdp growth. 14 because canada ’ s relatively weak export performance has been a central aspect of our economic situation, the bank of canada has examined it in increasing detail. new measures of external demand for canadian exports have been constructed, which better take into account how canadian industries are positioned in gvcs. 15 our staff have also constructed new measures of canada ’ s effective exchange rate that better capture canada ’ s competitiveness, not just relative to our export markets but also relative to third countries ( chart 5 ). 16 this analysis contributes to a better diagnosis of canada ’ s loss of competitiveness. 6 / 10 bis central bankers'speeches moreover, in keeping with the new concepts in international trade that i have been describing, our researchers have been examining canada ’ s exports at an increasingly disaggregated level, down to the individual firms involved. during the recession and its aftermath, many canadian exporters went out of business. with those firms went many of their supply - chain linkages. another complex set of adjustments have been playing out during the past three years, with the plunge in prices of oil and other commodities. the economic and human costs to the resourceproducing regions were huge. for canada ’ s economy to continue growing, the non - resource sectors — manufacturing and services — needed to grow faster and export more. increasing foreign demand and the 25 per cent decline in the value of the canadian dollar were forces supporting this adjustment. while this expansion of non - commodity exports did take place — exports of services were especially robust — the expansion was smaller than expected based on previous experience. regaining market share was not just a matter of getting foreign customers to switch to a canadian product. it often depended on a reassessment of where to locate production within a gvc — decisions that are typically not made often. to support the continuing growth of our international trade, many new linkages may need to be constructed as both new and existing firms emerge with new ideas and expand their activities to a sufficient scale. this process inevitably takes time and is still not complete. the prolonged weakness of canadian exports has meant that canada ’ s economy has needed to rely on other sources of demand to drive its growth. in particular, we have depended heavily on household spending, supported by very low interest rates. now, economic data show that growth in canada is becoming more broadly based and selfsustaining. we are seeing widespread

talks. it is essential for all countries to see the common interest in reducing trade barriers, and to work multilaterally through the wto to accomplish this. large emerging - market economies need to play their part. but so does the g - 7. this means we need to be willing to talk seriously about agricultural issues. i know that, politically, this is a hard sell here in the heartland of america, as it is in many parts of canada. but the global economy needs leadership in order to restart these talks, bring them to a successful conclusion, and reduce the threat of protectionism. let me now turn to the imf. it has become quite common these days to question the relevance of this institution. some people say that the imf should be scrapped, because countries now have ready access to private capital flows in global markets and no longer need to borrow from the fund. indeed, those countries that have imf loans are scrambling to repay them as quickly as possible. but this viewpoint ignores the fund's original mandate to promote international monetary co - operation by providing the machinery for consultation and collaboration on international monetary problems. the question then becomes, how can the imf best fulfill this role today? i would argue that, given the fund's structure, its worldwide perspective, and its considerable expertise, there are important ways for the fund to do this. it can improve its surveillance function and, in doing so, it can more effectively engage the national authorities of all countries. what do i mean by " improving surveillance? " to answer that question, it's best to have some context. in earlier decades, the fund would have a dialogue with individual member countries about whether that country was following policies consistent with a fixed exchange rate regime and, under certain circumstances, the appropriateness of the fixed rate itself. but following the collapse of the bretton woods system in the early 1970s, surveillance naturally moved away from a narrow focus on exchange rates. for countries that were borrowers – or potential borrowers – from the fund, discussion focused mainly on the conditions that a country would need to meet in order to access imf funding. it certainly had little to do with the policies needed to enhance stability and to facilitate domestic and global adjustment. it is clear that today there is a need to refocus surveillance on policies that enhance domestic economic stability, and thereby, support global stability. surveillance should be confined to a country's exchange rate, monetary, fiscal, and financial policies,