Dodge discusses the importance of flexibility in meeting economic challenges

Strong macroeconomic conditions in Canada and Alberta are helping both to become more flexible and better able to deal with whatever situations might develop now and in the future, says Bank of Canada Governor David Dodge.

In a speech to the Calgary Chamber of Commerce, Governor Dodge explained that while strong macroeconomic conditions are necessary for meeting the challenges of the global economy, additional work on microeconomic policies is still needed.

Calgary has the potential to be an international financial centre for the resource sector, said Governor Dodge. But the city is unlikely to be able to fully exploit this potential until Canada, as a whole, develops a more efficient framework for its securities market, he added.

"It's clearly in the interests of all Canadians, but particularly in the interests of Calgarians, to establish a uniform Canadian regulatory framework," he said. "This must be based on uniform principles, which are applied appropriately, taking into account the size and complexity of the issuer. And our securities laws must be consistently enforced."

The Governor noted that on 6 March, the Bank of Canada left its key policy interest rate unchanged at 4 1/4 per cent. He added that, in line with the Bank's outlook, the current level of the target for the overnight rate is judged, at this time, to be consistent with achieving the inflation target over the medium term.

Overall, the Bank of Canada judges that the risks to its inflation outlook are roughly balanced, said the Governor. However, there remains a possibility of a disorderly resolution of global imbalances.