MNI POLICY: BOC's Poloz: Below-Potential Growth 'Temporary'>

By Courtney Tower

     OTTAWA (MNI) - Following are the key points from a speech by Bank 

of Canada Governor Stephen Poloz on Monday, reaffirming the BOC's 

position that the present low-growth period will prove to be temporary. 

He spoke to the regional chamber of commerce in the Arctic community of 

Iqaluit, Nunavut, Canada: 

     - Poloz said, "Recent economic data have been generally consistent 

with our expectation that the period of below-potential growth will 

prove to be temporary." Keeping the policy rate below neutral would 

"help the economy work through this downshift in growth and keep 

inflation close to target." Poloz repeated the BOC's March statement 

that the economic outlook continues to warrant a policy rate below 

neutral to help the economy work through its downshift. 

     - Overall, recent data are giving a "mixed picture and need to be 

carefully monitored." 

     - Poloz repeated the BOC's concerns that the Canadian economy is 

hampered by business uncertainty and delayed or postponed investments - 

due to uncertainty about trade policy - as well as adjustments in 

housing and the oil industry. 

     - Nevertheless, "We expect that both exports and investment will 

return to positive growth later this year," he said. Poloz cited the 

strong labor market, and said that the oil sector adjustments to lower 

pricing would eventually be completed. As well, "firms tell us that they 

need to make new investments, and that the recent rules "around capital 

cost allowances are likely to speed that up." 

   --MNI Ottawa Bureau; yali.ndiaye@marketnews.com 

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