##ability of labour. canada has also taken steps to reduce distortions in the personal income tax system and has implemented a goods and services tax to replace the outdated tax on manufacturers. more recently, we made some major changes to our public pension system. the canada and quebec pension plans were established in 1966 using a " pay - as - you - go " system. but changing demographics put pressure on the plans, as they are doing in europe. by 1996, the federal and provincial governments agreed to changes that would put the canada and quebec pension plans on a firmer footing. this meant some restructuring of benefits and a sharp increase in contributions - moves that were not popular, but they were certainly necessary. the canada and quebec pension plans now generate surpluses that represent almost 1 per cent of gdp. these are set aside in special funds that cannot be touched by governments for general use. indeed, the federal and provincial governments agreed to set up the canada pension plan investment board, an entirely independent body. its sole mandate is to invest the contributions in markets, in order to generate the best possible returns, with due consideration for prudence, over the long term. i should also point out, because the canadian and italian systems are different, that all public sector employees in canada belong to pension plans that are fully funded. i know that you in italy are struggling with pension reform, and i know how difficult the issue is. but such reforms are important, and i wish you well in your efforts. the challenges you are facing serve to highlight the fact that implementing the fourth leg of the oecd policy consensus is not easy. but we must all continue to make progress and not lose sight of the four principles. the payoff that canada is now seeing gives me confidence in the value of the oecd consensus. despite the global economic slowdown, despite the collapse of the share prices of many technology firms, despite the effects of the september 2001 terrorist attacks against the united states, and despite the corporate governance and accounting concerns, canada's economy has remained strong. and most forecasters expect us to lead the g - 7 in economic growth again this year. given all the uncertainty in the global economy, it is more important than ever that national authorities around the world stick to this policy framework. it is only by staying the course that we can establish a steady base for sustained growth over the long term. canada's economic prospects let me now give you the bank of canada's views on the state of

stephen s poloz : fireside chat remarks by mr stephen s poloz, governor of the bank of canada, at the greater vancouver board of trade economic outlook forum, vancouver, british columbia, 9 january 2020. * * * introduction good morning, everyone, and happy new year. it is great to be here in vancouver for the board of trade ’ s economic outlook forum. this part of the event has been billed as a fireside chat. and, while i am happy to share the bank of canada ’ s observations on the economic outlook, i very much hope that i will get the chance to hear from you — business leaders who are making real decisions with real money every day. at the bank, a large and talented team uses state - of - the - art economic models and reams of data to forecast economic growth and inflation. but just as important is what we learn from talking to canadians. so i look forward to hearing about what is on your minds for 2020. the bank will announce its next interest rate decision and publish a monetary policy report with updated economic projections in a couple of weeks. to help set the stage for our discussion today, let me set out four key areas that are top of mind for the bank. global trade policy developments the first is the evolution of global trade policy. this has been a pressing concern for the past three years. the impact of protectionist actions, and uncertainty about what might come next, continues to hold back exports and investment globally. on the surface, there has been some improvement on this front lately, although it remains to be seen whether this will lead to a recovery of trade and investment. the canada - united statesmexico agreement is close to being ratified, and that will remove one big source of uncertainty for many canadian companies. and the united states and china have agreed to stop raising tariffs and to roll back some of them. but a lot of damage has been done ; this year, we estimate that global gdp will be around 1 percent lower than it would have been without the trade conflict. this loss will likely be permanent, even if growth resumes from that lower level. plenty of uncertainty remains around the implications of the us - china agreement for canadian exports and around whether any more of the new tariffs can be rolled back. some are concerned that the next step will be for the us administration to take similar trade actions against the european union. it is understandable that companies are reluctant to make big investments in this setting. experience tells