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The last time that I appeared before this committee was after the release of our April Report. Since then, our economy has been hit by a number of unusual shocks. Because of these shocks and other factors, growth has been weaker than expected. We now estimate that there is more slack in the economy than we had projected in April.

Since our April Report, the Canadian economy has been hit by a number of unusual shocks: SARS, BSE, the Ontario electricity blackout, and the severe forest fires in British Columbia. Inflation has also fallen faster and further than expected.

The last time that Paul and I appeared before this committee was after the release of our April Report. At that time, inflation was well above its 2 per cent target, and short-term inflation expectations had edged up. Although inflation was being pushed up by special factors, there were also signs that strong domestic demand was working to broaden pressures on prices.

Since the April Monetary Policy Report, the Canadian economy has been hit by a number of unusual shocks: SARS, BSE, the Ontario electricity blackout, and the severe forest fires in British Columbia.

The Bank of Canada today announced that it is maintaining its target for the overnight rate at 2 3/4 per cent.