quantitative and / or credit easing. in many countries, the authorities have also had to provide substantial direct support to financial institutions facing difficulties. although we have been spared that in canada, this support has been an important bolster for the global recovery. while these policy actions have been timely and effective, they imply that the incipient recovery depends to a considerable degree on official action. at what stage will private demand be robust enough to make the recovery self - sustaining? clearly, we haven't reached that point yet. a second important risk is the possibility of persistent strength in the canadian dollar, which would work against the positive factors that i mentioned earlier. the recent rise in the dollar is, in part, a reflection of the same factors that are leading to a recovery in canada, notably the rebound in commodity prices. it is also a result of a more generalized weakening of the u. s. dollar, as global financial conditions normalize. other things being equal, a persistently strong canadian dollar would reduce real growth and delay the return of inflation to target. if a stronger dollar were to alter the path of projected inflation relative to that presented in our july monetary policy report, we would need to take that into account. as we have said before, even though we are at the effective lower bound for our policy rate, we retain considerable flexibility through the use of unconventional monetary policy instruments, including quantitative easing. the output gap and the evolution of potential output i'll now turn to the output gap and potential output. the output gap is the difference between actual and potential output – with the latter defined as the level of output that can be achieved with existing labour, capital, and technology without putting sustained upward pressure on inflation. the concept has been much maligned, partly because it is not an observed variable, and it is subject to considerable measurement problems. however, it remains a convenient " shorthand " for characterizing underlying inflation pressures, and for bridging between the current conjuncture and the factors that will condition economic growth over the medium term, as the output gap is closed. our current situation of excess supply ( a negative output gap ) implies, all else being equal, that core cpi inflation can be expected to decline and then recover as actual output growth exceeds potential, while the level of output returns to potential. the output gap is best used to complement more detailed and micro - founded analysis, particularly that captured in more formal models. for example, our main projection model for the canadian

and what they want to do when they leave school. in order to be motivated to learn math, language, or science, students need to understand that this knowledge is relevant to the careers they want - that these courses are the foundation on which they will build their skills and interests. no one who learns a musical instrument practices scales so that they can be really good at playing scales. they practice scales so that they can play the songs they like. and students need to see first - hand the opportunities that will open up for them by studying hard and staying in school. colleges, and the industries that support them, play a key role in providing that motivation, through programs that give high school students a first - hand look at the career options ahead. the flip side of the aging population that i discussed a minute ago is relatively smaller cohorts of young people. but that doesn ’ t mean that we can stop focusing on the problems we face in preparing these young people for the workforce. indeed, the fact that we have smaller cohorts means that we must do better - we can ’ t afford to squander the potential of these young people. once they have finished high school, they need to learn the skills that will help them to become productive workers in the expanding sectors of the economy. i ’ m in the right place to be talking about this, because humber college has an exemplary record of training in areas such as design, merchandising, high - end services, and product innovation. of course, it will always be critical that canada stay on the leading edge of advanced research and theory. but pure research always needs to be complemented by the ability to commercialize, customize, and market the products that result. service industries will also require increasing numbers of skilled workers. older people buy relatively more services as a percentage of their overall consumption. the health care sector, for example, will require more medical technicians, therapists, nurse practitioners, and home care workers to meet growing demand. and as our population ages, the demand for leisure and travel services is increasing. the hospitality and tourism sectors can differentiate canada from other destinations by delivering the exemplary service that only well - trained workers can provide. in order to learn relevant skills, students should be trained to use the latest tools and production methods employed by the sector for which they ’ re training. this means innovative partnerships between educational institutions and industry, to give students access to equipment and methods that are actually being used by leading