more health professionals, investing in better equipment, and enhancing research and innovation. the government is also focused on the delivery of other key commitments to canadians, including : • high - quality early childhood development ; • predictable and long - term funding to municipalities for critical infrastructure needs ; • meaningful action on the disparities that impede opportunities for aboriginal canadians ; and • meeting the imperatives of national defence and national security. as minister goodale said in his economic and fiscal update presentation, meeting these priorities will require ongoing fiscal discipline. it will also require attention to improving productivity. but given the current high ratio of employment to population, and given that canada ’ s population will soon begin to age rapidly, we will have to rely increasingly on productivity to raise living standards in the future. to increase productivity, we canadians need to invest in human capital, physical capital and innovation - the three drivers of productivity growth. the key will be to adapt to change through policies that promote flexibility. that ’ s why canada is investing in the skills and knowledge of our people, and is creating a competitive environment through lower taxes that encourage investment in physical capital and reward the efforts of entrepreneurs. these flexibility - enhancing policies, along with lower barriers to trade, smart regulation and openness to international investment, are the building blocks of canada ’ s modern and prosperous economy. collaboration between canada and germany is part of this effort to encourage international investment. as one example, our two countries have a long - standing relationship in science and technology. the driving force behind this relationship is the bilateral s & t cooperation agreement, signed in 1971. and there is the very successful partnership between the national research council of canada ( nrc ) and the helmholtz association of german national research centres. the canadian embassy in berlin deserves real credit for encouraging this flourishing collaboration, and promoting technology - oriented partnerships. such cooperation is critical in an increasingly connected global economy. so, too, are forward - looking initiatives such as the trade and investment enhancement agreement between canada and the eu, which would allow qualified workers to move much more easily between the eu and canada and would enhance the ability of our financial sectors to seize investment opportunities. once concluded, this agreement would present germany, europe and canada with a unique opportunity to make our economies more global, more efficient and more prosperous. now let ’ s turn to a different issue. as you know, g - 20 finance ministers and central bank governors met in berlin over the weekend. among the themes of our discussions were the

importance of promoting flexibility in national economies to help adjustment to changing circumstances, and the need for reductions of global imbalances. the importance of a sound domestic and international financial system to facilitate the trade, savings and investment necessary to bring about a reduction of these imbalances was also discussed. so let me conclude these remarks this morning with a few thoughts on the importance of international monetary arrangements to facilitate the reduction of imbalances. most major industrialized countries and a large number of emerging market countries are operating with flexible exchange rates. the notable exceptions are china and a number of countries in southeast asia which, either explicitly or implicitly, tie their currencies to the yuan, which is in turn pegged to the u. s. dollar. with two systems operating, not everyone is playing by the same “ set of rules, ” and imbalances are building. the concern is two - fold : • first, the sense that some countries are not playing by the rules could give rise to protectionism, with potentially very serious negative consequences for the global trading system. • and second, a disproportionate burden of adjustment to changing economic circumstances is being borne by those of us with flexible exchange regimes, including canada and europe. so there is a real need, going forward, to think hard about these international monetary arrangements. of course, there is much more to the resolution of global imbalances than just exchange rate regimes. there are issues of savings and investment flows and of promoting strong economic growth worldwide, through strong domestic demand in each country. but the issue of international monetary arrangements deserves critical attention and debate, as we look out over the medium - and longer - term to the challenges facing the global economy. to conclude, i hope these remarks give you a good perspective on the fiscal health of the canadian economy and on some of the bilateral initiatives between our two countries. as well, i hope that i have given you some food for thought on international monetary arrangements. thank you for your attention. let ’ s now turn to hear your views.