The strong global growth of recent years is beginning to slow to a more sustainable pace and the right economic policies can help the process unfold smoothly, Bank of Canada Governor David Dodge said in a speech today to the Chile-Canada Chamber of Commerce.

Both Canada and Chile have benefited greatly from the strong global economic growth of recent years, said Mr. Dodge. But global economic imbalances are now a concern.

"It is crucial that financial markets remain confident that policy makers are serious about putting the right policies in place to allow for a smooth resolution of imbalances," said the Governor.

All countries need to follow appropriate domestic policies—structural reforms to encourage economic flexibility and efficiency, as well as a sustainable fiscal policy and a sound monetary policy based on low and stable inflation, the Governor added.

It's important that governments around the world support free trade in goods and services and resist protectionism, said Mr. Dodge. We also need "to make the international financial system as efficient and effective as possible," and that should include modernizing the IMF.