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The authors examine the recent evolution of commodity prices. They discuss the factors behind the price declines that occurred between the summer of 1997 and the end of 1998, including the key supply factors and the drop in Asian demand caused by that region's concurrent financial and economic crisis. They then review the effects of the reduction in world commodity prices on economic activity in Canada. They point out that the depreciation of the Canadian dollar against the U.S. dollar, together with the continued strength of the U.S. economy, has partly offset the negative effects on Canadian aggregate demand.

This article outlines the extensive work undertaken by the various participants in Canada's financial sector to ensure "business as usual" heading into January 2000 and beyond. The article looks at preparations in the Bank of Canada's own mission-critical systems and at those of the country's major clearing and settlement systems for which the Bank has oversight responsibility. It also looks at the steps taken by the financial institutions themselves. Contingency planning that takes account of specific year-2000 concerns is also reviewed.

As the curtain comes down on the twentieth century and we move on to the next millennium, it is difficult to resist the temptation to be both retrospective and prospective.

The Board of Directors of the Bank of Canada announced today that, pursuant to Section 6 of the Bank of Canada Act, Malcolm Knight has been appointed Senior Deputy Governor of the Bank for a seven-year term, effective 5 July 1999.

It is always a pleasure to appear before your Committee following the publication of our Monetary Policy Report. We released our ninth Report last Wednesday. The Bank of Canada began publishing these Reports on a semi-annual basis four years ago, as part of our effort to increase the transparency and accountability of the Bank's conduct of monetary policy.

Professor Daniel Racette has been chosen to fill the visiting economist position of Special Adviser in the Bank of Canada for a one-year term beginning in August 1999.

Six months ago, at the time of the last Monetary Policy Report, the global economic and financial environment was volatile and highly uncertain because of the adverse situation in Asia and the fallout from the Russian debt moratorium.

This morning we released our ninth Monetary Policy Report. The economic and financial situation is much improved since our previous Report in November. Financial markets have steadied in Southeast Asia, and prospects are good for a gradual recovery there. In Brazil, the authorities have taken major steps to address their difficulties. Overall, global financial markets […]

Bank of Canada Governor Gordon Thiessen today commented on the release of the Bank's ninth Monetary Policy Report.

In its conduct of monetary policy, the Bank of Canada carefully monitors the pace of monetary expansion for indications about the outlook for inflation and economic activity. In recent years, a number of factors have distorted the growth of the traditional broad and narrow aggregates. In this article, the authors discuss the uncertainty surrounding the classification of deposit instruments that has resulted from the elimination of reserve requirements and from other financial innovations. They introduce two new measures of transactions balances, M1+ and M1++ (described more fully in a technical note in this issue of the Review), that internalize some of the substitutions that have occurred. They attribute the deceleration in M1 growth in 1998 partly to the declining influence of special factors, partly to a lagged response to interest rate increases in 1997 and early 1998, and partly to some temporary tightening in credit conditions in the autumn of 1998. The broad monetary aggregate M2++, which includes all personal savings deposits, life insurance annuities, and mutual funds, grew at a steady pace in 1998, presaging growth of about 4 to 5 per cent in total dollar spending and inflation inside the target range.