the labour market, recent data have been mixed. while job growth has certainly been firm, both wages and unit labour costs have grown only slowly. the data suggest that material slack remains in the canadian labour market, in contrast with the us labour market, which is close to full employment. at the same time, canadian exports and business spending are still weaker than you would expect to see at this stage of the business cycle. companies are telling us that while they plan to raise spending, the planned increases are modest, or tied to maintenance, rather than expansion. in short, the economy is not yet firing on all cylinders. in addition, canadian companies are dealing with heightened levels of uncertainty related to us tax and trade policies. we still do not know what tax changes are coming, or when. and the range of potential trade measures under discussion is even wider now than it was in january. it includes a border - adjustment tax, increased tariffs aimed at specific industries or countries, nontariff barriers and even broader, multilateral measures. we do not know which of these will be enacted ; their timing is uncertain ; and each would affect the global and canadian economies 1 / 2 bis central bankers'speeches through a different, complex set of channels. with all of this uncertainty, we cannot reliably model the impact of changes to us trade policy. instead, we have built in an extra degree of caution in our forecast for exports and investment relative to our january projection. total inflation has been close to 2 per cent and is expected to dip to about 1. 7 per cent in the middle of the year before returning to near its target. however, our core inflation measures are all in the lower half of the target band and have been trending downward. this supports the view that the economy continues to have significant excess capacity. our current base - case forecast calls for the canadian economy to absorb its excess capacity sometime in the first half of 2018, which is a bit sooner than we projected three months ago. we are certainly happy to see the recent strength in the economic data and want to see more of it in order to be confident that growth is on a solid footing. we judge that the economy still has material room to grow. and we remain mindful that significant uncertainty continues to weigh on the outlook. given all of this, we judged that the current stance of monetary policy is still appropriate and maintained the target for the overnight rate at 1 / 2 per cent. with that, mr. chairman, senior

markets more efficient and economies more resilient. thank you. see r. prebisch, the economic development of latin america and its principal problems. ( new york, united nations, 1950 ). and h. w. singer, “ the distribution of gains between investing and borrowing countries, ” the american economic review 40, no. 4 ( 1950 ) : 473 – 85. bis central bankers ’ speeches chart 1 natural resources as a percentage of gdp chart 2 natural resources as a percentage of provincial gdp bis central bankers ’ speeches chart 3 the changing composition of canadian commodity production chart 4 commodity prices : composite index bis central bankers ’ speeches chart 5 nominal and real oil - price index chart 6 nominal and real food prices bis central bankers ’ speeches chart 7 emerging - market economies continue to drive global economic growth chart 8 growth in world gdp and contribution to global growth of oil demand bis central bankers ’ speeches chart 9 year - over - year change in commodity prices bis central bankers ’ speeches