Warren Jestin SVP & Chief Economist As The World Turns Presentation to: International Society of Hospitality Consultants Quebec City, October 2, 2009

Emerging Nations Remain Growth LeadersG7 Set for an Uneven Recovery real GDP, average annual % change The Global Economy Is Beginning to Revive real GDP, average annual % change

The Freefall in U.S. Housing and Autos is Over... months’ supply Housing Starts (RHS) mn units Housing Starts & Inventories Inventories (LHS) Vehicle Sales & Inventories US New Vehicle Sales (RHS) US Dealer Inventories (LHS) days’ supplymillions of units

... but U.S. Private & Public Financial Strains Remain Intense U.S. Federal Revenues Slide Rising U.S. Foreclosures 12-month moving sum, y/y % change Personal Income Tax Total Revenues Corporate Income Tax Source: U.S. Treasury. Source: Bloomberg. Subprime Foreclosures (RHS) Prime Foreclosures (LHS) % of total loans

billions, 2008* Emerging Markets Will Underpin the Recovery... *IMF estimate CHINA INDIA EU-12 JAPAN CAN- U.S. % of global GDP, 2008* Global GDP (PPP)Population RUSSIA MEXICO BRAZIL Other Asia/Oceania *IMF estimate

... Drive Commodity Prices Higher... Industrial Production y/y % change, 2009Q2 Blue bar represents price at September 25, Red bars represent Scotia Economics 2010F (average price). Historical end of day observations; Source: Bloomberg. Price Fluctuations Since January 2008 HighLow US$/bbl OIL High Low US$/mmbtu NATURAL GAS LowHigh US$/lb COPPER 1.26 LowHigh US$/lb NICKEL HighLow US$/kl JET FUEL 336

index: 2002=100 Europe Tourist Arrivals Accelerate Americas Asia... & Become Increasingly Important To the Tourist Industry Source: WTO Sources of Tourist Dollars – Selected Countries US$ billions, 2008 GERMANY UNITED STATESUNITED KINGDOM FRANCE CHINA ITALY JAPAN CANADA RUSSIA NETHERLANDS KOREA HONG KONG BRAZIL

Central Bank Rates Central Banks Will Provide Less Monetary Stimulus in 2010 Japan U.S. forecast % U.K. Euro zone Global Inflation annual % change Euro zone U.S. Japan U.K. forecast

U.S. Fiscal Deficit Soars US$ billions forecast Balance ex. Social Security Federal Budget Balance US$ Shows Signs of Weakening CAD $ Yuan 元 Yen ¥ Euro € Merchandise Trade Balance Low High Low Low High Low 1.25 US$ Exchange Rates Since January Look for Currency Volatility & Renewed U.S. Dollar Weakness Blue bar represents spot price at September 25, Red bars represent Scotia Economics 2010F (average). Historical end of day observations; Source: Bloomberg.

On the Horizon – Tourism must adjust to an Older & Greener World Total Emissions gigatonnes World China India Europe U.S. gigatonnes Median Age (years) Source: IMF

0809f10f REAL GDP U.S Canada U.K Euro zone Japan China INFLATION U.S Canada U.K Euro zone Japan China f10f CURRENCIES & RATES, end of period USD/CAD EUR/USD USD/YEN USD/YUAN U.S. Fed Funds Target Rate U.S. 10-year Treasury COMMODITIES, annual average WTI Oil (US$/bbl) Nymex Natural Gas (US$/mmbtu) Copper (US$/lb)

Disclaimer This report has been prepared by Scotia Economics as a resource for the clients of Scotiabank and Scotia Capital. Opinions, estimates and projections contained herein are our own as of the date hereof and are subject to change without notice. The information and opinions contained herein have been compiled or arrived at from sources believed reliable but no representation or warranty, express or implied, is made as to their accuracy or completeness. Neither Scotiabank Group nor its affiliates accepts any liability whatsoever for any loss arising from any use of this report or its contents.