Estimating potential output and the output gap - the difference between actual output and its potential - is important for the proper conduct of monetary policy. However, the measurement and interpretation of potential output, and hence the output gap, is fraught with uncertainty, since it is unobservable.
The winter Business Outlook Survey continues to provide signs of strengthening demand, especially among export-oriented firms and manufacturers. However, the outlook for businesses that are linked directly or indirectly to the energy sector has deteriorated.
The Bank of Canada will continue, in exceptional circumstances, to allow participants in the Large Value Transfer System (LVTS) to submit, on a same-day basis, requests to lift the 20 per cent limit of total collateral value pledged that can be the non-mortgage loan portfolio (NMLP).
The Bank of Canada, through its Standing Liquidity Facility (SLF), provides access to liquidity to those institutions that participate directly in the Large Value Transfer System (LVTS).