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Since the autumn of 1997, the regional offices of the Bank of Canada have conducted quarterly consultations with businesses across Canada. Timed to feed into the process that precedes the Bank's fixed dates for announcing monetary policy decisions, the consultations (now referred to as the Business Outlook Survey) are structured around a questionnaire which is sent to 100 firms that reflect the Canadian economy in terms of region, type of business activity, and firm size. Martin describes both the consultation process and the questionnaire and makes an initial assessment of the data gathered during the business interviews. The article includes charts and correlation tables that illustrate the responses to the key questions included in the survey.

This article examines the recent proposition that the decline in Canada's standard of living relative to that of the United States is causally related to the decline in our exchange rate. The authors explore the main channels through which the exchange rate and the standard of living could be related—productivity and the terms of trade—focusing mainly on productivity. They conclude that the decline in world commodity prices and weak demand for domestic output were affecting both Canada's standard of living and the exchange rate and that the flexible exchange rate regime itself did not play an independent role.

At the time of the October Monetary Policy Report, the Bank projected that core inflation would rise in the fourth quarter of 2002, reflecting a combination of one-off factors - including the rise in insurance premiums - and the “echo effect” from developments towards the end of 2001.

Governor Tiff Macklem discusses the Bank of Canada’s renewed monetary policy framework. He reviews Canada’s experience with flexible inflation targeting and explains why the Bank and the Government of Canada agreed to renew the 2 percent inflation target.

Deputy Governor Toni Gravelle discusses the Bank’s latest interest rate announcement and explains how efforts to keep financial markets functioning through the COVID-19 crisis will lay a solid foundation for economic recovery

This article first outlines the activities of the Bank's regional offices and looks at how regional economic analysis fits into the Bank's decision-making process. The changing role of the regional offices in communications and in information gathering is examined, focusing on the quarterly surveys of industries and associations. The second section reviews, from a regional perspective, economic developments since the Asian crisis and future prospects.

On 8 and 9 June 2000, the Bank held a seminar to examine some key issues affecting the upcoming decision on Canada's inflation-control target for the period after 2001. The main issues covered at the seminar were the extent of downward nominal-wage rigidity and its implications for employment as well as the relative merits of price-level targeting versus inflation targeting. Another critical question that was discussed was how to balance the evidence on all the relevant issues in order to develop an overall view on the appropriate long-run target. The author gives a brief overview of the seminar followed by detailed summaries of individual papers.

The summer Business Outlook Survey points to a diverging outlook across regions. While there are some encouraging signs, owing in part to strengthening U.S. demand, weak oil prices continue to significantly dampen economic perspectives in affected sectors and regions.

The Bank’s new forecast calls for real economic growth of 1.2 per cent this year, 2.1 per cent next year and 2.0 per cent in 2021.

Overall, responses to the winter Business Outlook Survey indicate that business sentiment has deteriorated as the negative effects of the commodity price shock continue to unfold and spread beyond the resource sector. However, exporters not directly affected by lower commodity prices continue to benefit from strong U.S. demand and the weak Canadian dollar.