BOC's Poloz: Canada may be able to handle more growth without inflation
- There is a degree of untapped potential in the economy
- "It is not much of a stretch to imagine that Canada's labour force could expand by another half a million workers"
- Labor market as become a 'good deal' healthier over the past year but some slack still remains
- Expect that increased investment, labor market churn to create more supply through higher productivity and employment
- Monetary policy remains particularly data dependent
- BOC can't take mechanical approach to policy, even thought interest rates likely to move higher over time
- Cannot know in advance how far capacity-building process can go but obliged to let it occur.
- Good reason to be optimistic about Canadian economy, even with all the unknowns
- Women, youth and aboriginals are a source of untapped potential economic growth
- Canada at 'sweet spot' of economic cycle where investment and capacity-building usually take over as an engine of growth
- A period of slow productivity growth is usually associated with slow rates of new company formation. We are-at long last-finally seeing some encouraging signs in these data
- Full text
The comments came out early. They are very dovish, especially the headline and the bolded.
The big debate in central banks is whether to wait-and-see on inflation or to hope/expect it will come. Most are in the hope/expect camp but the BOC is shifting to wait-and-see.