03/30/2016 14:31 EDT | Updated 03/31/2017 01:12 EDT

Economy will take years to adjust to commodity price decline: Bank of Canada

OTTAWA — A senior Bank of Canada official says it will likely take more than two years for the country's economy to fully adjust to the commodity price shock.

Deputy governor Lynn Patterson says if oil prices remain flat, a new economic balance will take shape over several years — one that sees the share of the resources sector shrink to pre-boom levels.

In prepared remarks of her speech today in Edmonton, Patterson said that by 2020 the commodity sector may only account for only 40 per cent of exports, down from 50 per cent in 2014.

She says the bank's modelling also suggests the resource industry's share of business investment could fall to 40 per cent, compared with 56 per cent in 2014.

Patterson also says weaker commodity prices will likely continue to lower incomes and economic growth in the coming years.

She says the extent to which potential economic growth is permanently lower will depend on the emergence of non-resources industries.


The Canadian Press