For example, he noted that recent numbers have shown improvements in the export of items such as packaging materials, furniture and pharmaceutical products. He added that tourism has also seen a boost in Canada, which has seen its currency depreciate.
"That's the phase of the expansion that we're watching for and we know they're close to being ready."
For one, Poloz said the national economy took an unexpected hit from the huge wildfire that swept through Alberta. It forced 90,000 people to flee Fort McMurray and the shutdowns of crucial oil-production facilities. He predicted the impact of the wildfires to shave between one and 1.25 percentage points from annualized second quarter growth, which could produce a slight contraction. However, Poloz added that the dip likely means the third quarter will show bigger-than-expected growth, which is measured by real gross domestic product. "This suggests to us that GDP growth will be very choppy in the near term, in the second and the third quarters," he said. The Bank of Canada will update its projections next month in its monetary policy report — a package of forecasts that Poloz suggested could shift once again depending on the outcome of the upcoming referendum on whether Britain will leave the European Union.
"Two steps forward, one step backward."
Stephen Poloz, governor of the Bank of Canada, smiles during the annual Milken Institute Global Conference in Beverly Hills, California, U.S., on Tuesday, May 3, 2016. (Photo: Patrick T. Fallon/Bloomberg via Getty Images)The federal Liberals have warned that a vote by the United Kingdom in favour of leaving the EU — the so-called Brexit — would be a negative for the Canadian economy. Poloz also noted that the central bank continues to monitor the potential financial stability risks caused by strong household spending, particularly in the soaring real-estate markets of Vancouver and Toronto. He said while it remains a concern, the bank predicts the level of risk to fade as the economy rebuilds. In his speech, Poloz underlined the resource sector's ongoing "painful and complex" adjustment to low oil prices. He also noted that the non-resource economy is still "moving unevenly toward full recovery" following the trauma caused by the 2008-09 financial crisis. "Two steps forward, one step backward," Poloz said. "There's a resilience and flexibility among Canadians that gives me confidence that we will get through these adjustments and our economy will return to natural, self-sustaining growth."
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