analytical note today about wages, and will continue to monitor this issue. in terms of new capacity creation, we have also seen positive signs. business investment has continued to grow, our business outlook survey shows that intentions remain positive, and historical data revisions imply that capacity is greater than we previously thought. new companies are typically a key source of capacity growth, and while it is still too early to determine the trend, recent data on firm creation have been encouraging. we will update our views on the economy ’ s potential in the april mpr. the second issue was how the evolution of capacity pressures will affect the outlook for inflation. as the governor noted in a speech last november, a number of economists and policy - makers have been struggling to explain weaker - than - expected inflation in many jurisdictions. this has not been the case here in canada, where core inflation measures have been increasing and 1 / 2 bis central bankers'speeches behaving largely as we would have expected. inflation was actually a bit stronger than we projected in october, rising to just above our 2 per cent target near the end of last year. this was due to the temporary impact of higher energy prices. we expect a bit of a dip in inflation in the near term, largely because of the base - year effects of gasoline prices. the big picture is that we project inflation to fluctuate relatively close to target throughout the projection horizon. that said, there is still the risk of a drag on inflation coming from global trends, such as digitalization in the economy. this will continue to be something that we watch closely. the final key issue we discussed is how best to account for the uncertainty surrounding the renegotiation of nafta in our policy decisions. where trade policy decisions have already been taken, such as in the case of softwood lumber, we have built in their expected effects. in addition, while the results from the business outlook survey were positive, an increasing number of firms told us that uncertainty surrounding the outcome of the talks is weighing on their investment decisions and, to a lesser extent, trade. because of this, we added some more negative judgement to our profile for both business investment and exports. consistent with this approach, our outlook is based on the premise that current trade agreements will remain in place over the projection horizon. there are still a wide range of possible outcomes, which could play out over many different timelines. we do not know how the talks will conclude, and we do not know how governments

to be an enduring pillar of the international financial architecture. to that end, the g - 20 leaders agreed at the cannes summit last november that the fsb should expand its resources, and gain legal personality bis central bankers ’ speeches and greater financial autonomy. this will extend the fsb ’ s capacity to coordinate, monitor and assess financial reform. but, ultimately, it is up to the fsb ’ s member countries to ensure that the house of reform becomes the home to the financial system. full implementation is the responsibility of every member. we should expect no less. thank you. bis central bankers ’ speeches