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The COVID-19 pandemic placed unprecedented strain on the global financial system. We describe how the Bank of Canada responded to the rapidly deteriorating liquidity in core Canadian fixed-income markets.

Three major interrelated global developments are having a profound impact on the Canadian economy and making the outlook more uncertain than it was at the time of the July Monetary Policy Report Update.

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Your money on the move

Housing starts and building permits data are commonly used as leading indicators of economic activity. In British Columbia, all new homes must be registered with the Homeowner Protection Office, a branch of BC Housing, before the issuance of building permits and the start of construction.

We present results from the 2021 Methods-of-Payment Survey, including updated payment shares. We highlight long-term trends and provide additional context for results with respect to the COVID-19 pandemic.

Inflation expectations for one to two years ahead have come down again but remain well above their levels from before the COVID-19 pandemic. The higher cost of living is the most pressing concern for consumers, and along with elevated interest rates, continues to constrain most households’ spending. Homeowners who are planning to renew their mortgage over the next two years and who expect significantly higher payments are likely to plan spending cuts. Some households though are starting to think the worst is behind them. Consumer confidence about the future of the economy has improved alongside their lower inflation expectations. Expected lower interest rates and strong immigration, which boosts housing demand, are behind consumers’ view that housing market will increase over the next year. Workers remain confident about jobs.

2011 was a challenging year for the global economy. Amid global turbulence, Canada’s macroeconomic policy framework has stood us well. The 2011 Annual Report provides a Message from the Governor, highlights key achievements over the year, describes the Bank’s corporate governance, and presents financial statements in conjunction with Management’s Discussion and Analysis.

The financial turbulence over the past year has been costly and difficult for many individuals and financial institutions; it's been challenging for policy-makers; and it's had implications for the overall economy.

This discussion paper is the third in the Financial Markets Department’s series on the structure of Canadian financial markets. These papers are called “ecologies” because they study the interactions among market participants, infrastructures, regulations and the terms of the traded contract itself.