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Measures of productivity tell us how much output we produce from the use of tangible inputs - such as skilled workers and capital equipment - and intangible inputs - such as technological advances and managerial and entrepreneurial know-how. Productivity rises over time as we boost output by finding new and more efficient ways to use these inputs.

Improving Canada's productivity performance requires more efficient allocation of labour and capital resources, and continued innovation in both products and production processes, Bank of Canada Governor David Dodge said today at a conference organized by the Canadian Council for Public-Private Partnerships.

Today, I want to share with all of you Canada's perspective on the design of an inflation-targeting system, some of the lessons we have learned over almost 15 years of experience with explicit inflation targets, and some of the challenges that remain. This topic is timely, because the Bank of Canada's inflation-targeting agreement with the Canadian government is up for renewal next year, and I am pleased to note that, earlier today, the Government announced its intention to renew our agreement for another five years.

Over the past year, I have spoken a number of times on the topic of efficiency, and why it is so important for Canadian policy-makers to keep in mind the goal of an efficient financial system. Today, I want to talk about Canada's system of pension plans and how they contribute to the efficiency of financial markets and of the economy as a whole.

Canada's pension system should be strengthened so it can continue to play an important role in our economy and contribute to efficiency of financial markets, Bank of Canada Governor David Dodge said today.

As globalization intensifies, more and more regions are realizing the benefits of open trade and capital account liberalization. But with increased globalization also comes increased exposure to shocks originating outside each country's borders.

A consultation document on issues relating to the design and structure of the government's domestic bond program for the fiscal year 2006/07 and beyond, prepared jointly by the Department of Finance and the Bank of Canada, is being made public today.

The revised Terms of Participation and the Standard Terms for Government of Canada Auctions, prepared jointly by the Department of Finance and the Bank of Canada on behalf of the Government of Canada, are being published today.

When Paul and I appeared before this Committee last April, we said that the economy appeared to be operating slightly below its production capacity, and that we expected it to move back to full capacity in the second half of 2006. In our October Monetary Policy Report, which we published last Thursday, we said that economic growth in the first half of the year was somewhat stronger than we had previously expected. Indeed, the global and Canadian economies have continued to grow at a solid pace, and our economy now appears to be operating at full production capacity.

It's not surprising that the Bank of Canada is interested in promoting economic integrity. After all, the Bank of Canada Act mandates us, as far as possible within the scope of monetary policy action, to "promote the economic and financial welfare of Canada."