October 29, 2013 / 6:00 PM / 5 years ago

Bank of Canada: don't count on commodity prices for income growth

A cyclist rides past the Bank of Canada building in Ottawa July 17, 2012. REUTERS/Chris Wattie

WINNIPEG, Manitoba (Reuters) - Commodity prices may not rise as much as they have in recent years and should therefore not be relied upon for future income growth, Bank of Canada Deputy Governor Agathe Cote said on Tuesday.

“Going forward, productivity may become more crucial to our financial well-being, since real commodity prices, while expected to remain elevated, may not rise as much as they did in the past decade,” Cote said in the prepared text of a speech on “The Promise of Potential.”

“An unrelenting demographic shift is under way. Strength in the growth rate of trend labor input can no longer be counted on to support potential output growth in the face of poor trend labor productivity. And, while Canada benefits from abundant natural resources, one cannot necessarily count on commodity prices to provide the same boost to income growth in the future as they have in the recent past.”

Reporting by Rod Nickel; Writing by Randall Palmer; Editing by Diane Craft

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