activity, their contribution to growth will be limited by a still - weak level of foreign demand and ongoing competitiveness challenges, including the persistent strength of the canadian dollar. as a consequence, growth remains largely reliant on private domestic demand. business investment is expected to be an important source of growth going forward, reflecting highly favourable conditions and the competitive need to refocus, retool and retrain. momentum in household spending remains solid. however, in an environment of more modest growth in employment, wages and net worth, households ’ dependence on debt financing remains the biggest domestic risk. as the bank noted in its march decision, the profile for core and total cpi inflation is somewhat firmer than previously anticipated, reflecting reduced economic slack as well as higher oil prices. over the next few weeks, the bank will update its outlook for growth and inflation in canada to reflect these factors and other developments, such as recent federal and provincial budgets. as always, this analysis will inform our monetary policy decisions. the bank will take whatever action is appropriate to achieve the 2 per cent cpi inflation target over the medium term. this is our contribution to ensuring that canadians can save and invest with confidence. over the next few years, canadian businesses will also have to analyse and act. their decisions to refocus, retool and retrain will do much to determine how rapidly our prosperity grows in the decades ahead. for canada to grow in the future as it has in the past, businesses will need to draw on similar resourcefulness that the membership of the k - w chamber has demonstrated over the years. bis central bankers ’ speeches bis central bankers ’ speeches

##growing advanced economies, particularly the united states, rather than fast - growing emerging markets. this concentration reduced the annual average rate of export growth by d. de munnik, j. jacob, and w. sze, “ the evolution of canada ’ s global export market share, ” bank of canada working paper, forthcoming. bis central bankers ’ speeches around 3. 3 percentage points between 2000 and 2007 ( chart 5, table 1 ). by comparison, the drag from competitiveness effects was about 2. 5 percentage points. in short, our underperformance prior to the crisis was more a reflection of who we traded with than how effectively we did it. this is even more the case since the onset of the great recession. canadian export growth has continued to lag the global average by about 5 percentage points annually. competitiveness effects have remained relatively stable. the combination of overexposure to the u. s. market and underexposure to faster - growing emerging markets is almost entirely responsible for canada ’ s further loss in world market share over the last several years. it does not have to be this way. many advanced countries have been more successful at capitalizing on the immense opportunity that emerging markets in general and china in particular represent. for example, germany has maintained its market share in manufactured goods by exporting capital goods and autos to china, and more broadly to emerging - market economies. australia has gained substantial market share in its exports of commodities to fill rising demand from china. expect these trends to continue the obvious question is whether we can expect these trends to continue. the answer is yes. bis central bankers ’ speeches a new normal for the united states our reliance on the united states is an issue only if we expect u. s. underperformance relative to both history and the rest of the world to continue. unfortunately, that is what we must expect as, to a degree, the u. s. economy is not what it used to be. allow me to explain. the trend in u. s. potential growth – the “ speed limit ” if you will of the u. s. economy – was already falling in the year leading up to the crisis, reflecting both an aging population and slower productivity growth. in the meantime, emerging markets were increasingly living up to their name, with large productivity increases raising their speed limits. the result was the increasing underperformance of the u. s. economy relative to the rest of the world