monetary policy stimulus because our goc bond holdings are growing. in october, we recalibrated the program to focus more directly on longer - term borrowing rates. this reduced the amount of term risk that market participants need to absorb, putting downward pressure on term premiums. this shift in composition allowed us to reduce our weekly purchases to a minimum of $ 4 billion, without reducing the overall stimulus coming from qe. at the time of our january monetary policy report, we indicated that if the economy plays out in line with or stronger than our economic projection, we won ’ t need as much qe stimulus over time. and in our march policy decision statement, we said that as we continue to gain confidence in the strength of the recovery, we will gradually adjust the pace of our qe purchases. we also indicated that first - quarter growth appears to be better than we expected in january. we will have a new full economic projection at our april policy decision. i want to be clear here : moderating the pace of purchases while adding to our holdings would simply mean that we are still adding stimulus through qe but at a slower pace. it would not mean we are removing stimulus. we would be easing our foot off the accelerator, not hitting the brakes. when we start gradually dialling back the amount of incremental qe stimulus that we are adding, we will eventually get down to a pace of qe purchases that maintains — but no longer increases — the amount of stimulus being provided. that is, a pace where our goc bond holdings are largely stable and we reinvest the proceeds of maturing assets. at that point, the accumulated amount of goc bond holdings would still represent a significant amount of stimulus in the system. i ’ d like to stress a few things about our journey to this reinvestment phase of qe. first, the process for getting there will be gradual and in measured steps. second, the timing of these moderations to the pace of purchases, and the amount of time that we take to get to the reinvestment phase, will be guided by our evolving assessment of the macroeconomic outlook and the strength and durability of the recovery. and third, adjusting the pace of qe purchases won ’ t necessarily mean that we have changed our views about when we will need to start raising the policy interest rate. these decisions are distinct. we have committed to continuing our qe program — by which we mean positive net purchases — until

of the jobs being created. more than 80 per cent of new jobs are in sectors where the average hourly wage is higher than in manufacturing. canada's ability to capitalize on higher commodity prices ( or to mitigate the impact of lower ones ) depends crucially on the continued ability of our economy to adjust. product and labour market flexibility is essential. the trade, investment, and labour mobility agreement ( tilma ) between alberta and british columbia is a good example of the type of response needed. it is encouraging that other governments are contemplating similar liberalizations. lessons from the previous boom before turning to monetary policy considerations, i would like to recall some lessons from the last sustained upturn in commodity prices. during the 1970s, a number of commodity prices spiked – including oil prices, which rose five - fold during the decade. like today, common drivers included low real interest rates globally and supply factors, in particular, the emergence of opec. the decline of the newly floating u. s. dollar also pushed oil prices higher, along with the persistence of inflation in g - 7 countries once inflation expectations began to rise. authorities in many oil - producing countries acted as if higher prices would persist indefinitely. they increased spending rapidly, which would prove calamitous when prices reversed and large structural deficits were revealed. in canada, total program spending by the federal government rose from 17 per cent of gdp in the early 1970s to 21 per cent only a decade later. in 1985, the general government structural deficit peaked at 8 per cent of potential gdp. we should keep fresh in our minds the memory of the herculean efforts required to eliminate this drain on future generations. the management of monetary policy, in hindsight, was not much better. authorities in many countries mistakenly assumed that the productivity gains experienced over the previous quarter century would continue. rising unemployment was taken, falsely, as a sign of rising excess capacity. this ignored the fact that much of our industrial activity, indeed much of our society, was based on an assumption of perpetually cheap energy. the monetary authorities of the day reacted to the oil - price shock by accommodating the price increase. viewing the higher prices as contractionary, they loosened monetary policy to avoid a slowdown. the absence of an explicit nominal anchor for policy made this decision easier and its consequences far worse. as we know now, the assumed excess supply was illusory. the fallout from these errors in monetary and fiscal policy was severe. the global recession