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In November 2000, the Bank of Canada introduced a new system of eight "fixed" or pre-specified dates each year for announcing any changes to the official interest rate it uses to implement monetary policy. This paper describes the basic features of the proposed approach, elaborates its key advantages and identifies issues for consultation.

The survey results point to an overall easing in business-lending conditions during the second quarter of 2010. Both the price and non-price aspects of business lending eased during the quarter. Note that the balance of opinion indicates only the direction of the change in lending conditions; it does not provide information on the magnitude of the change.

We are pleased to appear before this committee today to discuss the Bank of Canada’s views on the economy and our monetary policy stance. Before I take your questions, I would like to give you some of the highlights from our latest Monetary Policy Report, which was released last week.

The global economic recovery is entering a new phase. In advanced economies, temporary factors supporting growth in 2010 - such as the inventory cycle and pent-up demand - have largely run their course and fiscal stimulus will shift to fiscal consolidation over the projection horizon.

The results of the winter survey provide some evidence that confidence in the recovery is growing. While the balance of opinion on future sales is little changed, and respondents still expect the recovery to be gradual, more firms are planning to increase investment spending and employment than in the previous two surveys.

Responses to the autumn survey suggest that the Canadian economy is recovering, as all indicators of business activity have increased since the summer survey. However, because firms continue to expect activity to pick up only gradually, they remain cautious regarding investment.

Expectations regarding future sales growth are essentially unchanged from the last survey. Investment and employment intentions have declined from the very high levels reported in the previous survey, but continue to be solid.

The recent recession was not an ordinary downturn, and a bold response from the public and private sectors in Canada and globally is required to secure the economic recovery, Bank of Canada Governor Mark Carney said today.

The Bank of Canada today announced that it is raising its target for the overnight rate by one-quarter of one percentage point to 1/2 per cent.

As part of the Bank of Canada's interest rate decision on 1 June 2010, the Bank will re-establish the standard operating framework for the implementation of monetary policy.