Search

Sound financial investment is important to individuals, to firms, and to society as a whole. By definition, investment is forward looking, and thus our future financial well-being is shaped by the soundness of the investment decisions we make today.

Canada’s economy is expected to grow by 2 1/2 per cent this year and just below 2 per cent in 2018 and 2019.

Growth in the Canadian economy is projected to slow from 3 per cent in 2017 to 2.2 per cent this year and 1.6 per cent in 2019.

While a second wave of COVID-19 is hurting Canadians now, the economy should rebound strongly later in the year. The Bank is forecasting growth of around 4 percent this year and close to 5 percent in 2022.

The year 2006 marked a turning point for the Bank of Canada. We successfully completed our medium-term plan, The Way Forward, and began writing a fresh chapter in the Bank’s history based on a new three-year plan. In this annual report, we do more than give an accounting of past achievements. We also provide forward-looking information on the plans and priorities in our new medium-term plan. And as we advance, we are always mindful of the Bank’s original mandate, set out more than 70 years ago, to “promote the economic and financial welfare of Canada.”

We are facing a time of great economic and political uncertainty. While economic activity is close to potential in Canada, most other countries are facing very weak demand and lacklustre economic prospects. And, of course, there is the overriding prospect of a war in Iraq.

The Bank of Canada (BoC), RBC Capital Markets, RBC Investor Services, TD Bank Group (TD), and Export Development Canada (EDC) successfully completed Project Samara, a collaborative initiative to evaluate how tokenization and distributed ledger technology (DLT) can improve bond issuance and settlement in a real-world setting.

This issue features a summary of the Bank’s annual conference, which this year dealt with financial globalization, and three articles that present research by Bank staff on Canada’s mortgage market, the role of adverse selection in financial crises, and payment networks.

I know that risk is ever-present in your work, as you fulfill your commitments to the beneficiaries and sponsors of your pension plans. Important risks surround the investment performance of those plans, as well as the value of pension liabilities.

Central banks must cope with considerable uncertainty about what will happen in the economy when formulating monetary policy. This article describes the different types of uncertainty that arise and looks at examples of uncertainty that the Bank has recently encountered. It then reviews the strategies employed by the Bank to deal with this problem. The other articles in this special issue focus on three of these major strategies.