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One theme that I heard repeatedly in Washington is that 2004 is turning out to be a better year than many had thought, particularly over the first half of the year. Indeed, the IMF is now projecting global economic growth of 5 per cent in 2004, which would be a marked improvement from the 3.9 per cent rate seen in 2003.

The Bank does look to the Chamber to help us understand how economic developments are unfolding at the industry level. And I particularly want to thank the Chamber for being an ongoing partner in our efforts to smoothly introduce three new high-denomination bank notes this year.

The theme of this event is "Policy Coordination in an Integrated Global Economy." It seems as if the idea of policy coordination is making a comeback these days.

The same is true of the Canadian economy, which must always adjust to changing domestic and world circumstances. During 2003 and so far this year, some of those adjustments may have felt more like overhauls, particularly for some manufacturing firms here in Ontario.

As you know, many institutions, both governmental and private, are currently concerned about governance structures, accountability and rules of behaviour.

For five years, the research program here at Schulich has helped to support and nurture a Canadian academic community focused on financial services. In doing so, the program has encouraged researchers to fill the gaps in our knowledge and help policy-makers and regulators to do a better job. After five years, it's useful to think back and recall the motivations for establishing this program in the first place.

The giant emerging-market economies of China and India are truly changing the economic balance across the Pacific in a way that none of us can afford to ignore. The sheer size of these two economies is very impressive in itself: together, they account for close to 40 per cent of the world's population.

To state the obvious, Canada is a very open economy, heavily dependent on foreign trade. What goes on in the rest of the world can have a substantial impact on our domestic economy.

There is a great physical distance between our two countries - in terms of latitude, there are about 80 degrees of separation between Buenos Aires and Ottawa. But despite that distance, Canada and Argentina are closer, and have more in common, than you might think. We are both federations, with a certain natural tension between the national government and relatively powerful provinces.

Today, I want to focus my remarks on Canada's adjustment to changes in the global economy. I will talk about our efforts to adjust to longer-term economic forces and about the challenges that these forces present. Some of our experiences may be relevant to other economies that are making similar adjustments in the face of similar economic circumstances.