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Since our April Report, the Canadian economy has been hit by a number of unusual shocks: SARS, BSE, the Ontario electricity blackout, and the severe forest fires in British Columbia. Inflation has also fallen faster and further than expected.

Canada's reliance on foreign trade has required us to be active internationalists for decades. Louis Rasminsky, who went on to become Governor of the Bank of Canada, was one of Canada's delegates at the Bretton Woods Conference that led to the creation of the International Monetary Fund (IMF) and the World Bank. Rasminsky played an important role, formal and informal, at the talks.

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.

Today, we released our Update to the April Monetary Policy Report. The Update reviews economic and financial trends in the context of Canada's inflation-control strategy.

The Bank of Canada, the Durham District School Board, the Royal Canadian Mounted Police, the Ontario Provincial Police and the Sûreté du Québec are joining forces to promote the new Counterfeit Detection module, a free ready-to-teach kit available to high schools across the country.

The last time I testified before this committee was in the spring of 2002, because we were unable to arrange our regular meeting last fall. You will recall that following the 11 September 2001 terrorist attacks in the United States, we quickly and aggressively cut our policy interest rate to shore up confidence and support domestic demand. By last spring, evidence had already started to build that demand was growing faster than the economy's production capacity.

The Directors of the Bank of Canada appointed under Section 9 of the Bank of Canada Act today announced that they have appointed Mark Carney as Governor of the Bank of Canada for a seven-year term, effective 1 February 2008.

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.

The Bank of Canada is pleased to announce the recipients of its 2008 Law Enforcement Award of Excellence for Counterfeit Deterrence.

The Bank of Canada today announced that it is maintaining its target for the overnight rate at 4 1/2 per cent.