CAD Grant Lynch Matt Bennett Lainie Vi

In 2000, the Bank of Canada adopted a system of eight pre-set dates per year on which it announces its key interest rate Interest rate announcementMonetary Policy Report and Update 20-Jan22 January (Update) 3-Mar Apr23-Apr 4-Jun Jul23 July (Update) 10-Sep Oct22-Oct 8-Dec This process includes an economic projection based on a model of the Canadian economy; an analysis of the information from monetary and credit aggregates, interest rate credit spreads, and changes in credit access; and information on the interest rate expectations of participants in financial markets.

Monetary Policy Reports Meeting DateCanadian Monetary Policy Report UpdateInterest Rate 1/18/2007In line with the Bank’s outlook, the current level of the policy rate is judged, at this time, to be consistent with achieving the 2 per cent inflation target over the medium term. Target rate for the overnight rate unchanged at 4.25 per cent on 5 December 2006 and 16 January /26/2007The current level of the target for the overnight rate is judged, at this time, to be consistent with achieving the inflation target over the medium term. The Bank left its key policy interest rate unchanged at 4.25 per cent on 6 March and 24 April. 7/12/2007The Bank judges that the economy is now operating further above its production potential than was projected at the time of the April Report Bank of Canada raised its key policy interest rate to 4.5 per cent on 10 July

Monetary Policy Reports Cont. Meeting Date Canadian Monetary Policy Report Update Interest Rate 10/18/2007 Momentum in domestic demand is projected to remain strong, but net exports will exert more of a drag due to a weaker US outlook. Canadian GDP is expected to grow by 2.6% in 2007, 2.3% in 2008, and 2.5% in Core and total inflation are expected to return to 2% in the second half of The current level of the target for the overnight rate is consistent with achieving the inflation target over the medium term. 1/24/2008 Both core and total CPI inflation are projected to fall below 1.5% in mid 2008 before returning to 2% by the end of 2009 Effects of the slowing US economy will continue to add downward pressure on export growth. Stimulus is needed to aggregate supply and demand in balance and to return inflation to target over the medium term The Bank projects average annual growth of 1.8% in 2008 and 2.8 in /24/2008 Slowing global economic growth and ongoing financial market turbulence will have direct consequences for the Canadian economy Both core and CPI inflation are projected to be slightly below 2% in 2009 and return to 2% in The risks around the Bank’s base-case project for inflation appear balanced. GDP is projected to grow by 1.4% in 2008, 2.4% in 2009,and 3.3% in 2010

Monetary Policy Reports Cont. Meeting DateMonetary Policy Reports UpdateInterest rate 4/15/2008 Canadian GDP is projected to grow by 1.0 per cent in 2008, 2.3 per cent in 2009, and 3.3 per cent in Higher energy prices will push total CPI inflation temporarily above target, peaking in the first quarter of 2009 current levels of short-term interest rates incorporate no change in the target overnight rate by year-end. 10/23/2008 Growth in Canada will be sluggish through the first quarter of next year, then pick up over the rest of 2009 Total CPI inflation is projected to fall below 1 per cent in mid-2009 before rising to 2 per cent by the end of Core inflation will remain below 2 per cent The policy rate has been lowered by a total of 75 basis points this month, 225 basis points since the beginning of December /23/2009 Canadian real GDP is projected to decline by 3.0 per cent in 2009 and to grow by 2.5 per cent in 2010 and by 4.7 per cent in 2011 After declines in 2009, core inflation and total CPI inflation are projected to gradually return to 2 per cent in the third quarter of 2011 The Bank lowered its policy rate to ¼ percent. conditional on the outlook for inflation, committed to hold the rate at that level until the end of the second quarter of 2010

Projection of Interest Rates for 2010 Canada’s Bank will continue to keep interest rates low to stimulate the economy. Canada’s Bank will continue to keep interest rates low to stimulate the economy. Net exports has shown less drag on the economy in , and then contributed positive growth. Net exports has shown less drag on the economy in , and then contributed positive growth. Stronger global growth, improved credit conditions, and lagged effects on monetary policy actions show changes coming soon. Stronger global growth, improved credit conditions, and lagged effects on monetary policy actions show changes coming soon.