Dec 8 (Reuters) - Below are some key quotes from a press conference on Tuesday with Bank of Canada Governor Stephen Poloz in Toronto:
“I think that we’ve got all the ingredients of a recovery in place. We’ve got clear signs that our recovery is underway. It’s being masked to some degree by the declines, especially in the energy sector, but also in other resource areas.
“Underneath the surface, we have all those things happening and the effects of our policy stimulus are still only probably half there. It will take another year for all those effects to come true. So we need to be a little bit patient here on that front. We see no reason to be contemplating these measures. It’s just that we’ve been several years since we put them out. We knew they needed updating based on our research and experience in other countries.
“And I think you should take some confidence from that, to know that we have more tools available, should something happen that makes them needed.
ON NON-RESOURCE EXPORTS:
“The good news is that the U.S. recovery continues to fulfill our expectations and that of course is by far the most important ingredient for an upturn here in Canada and we’re seeing exactly the sectors that we said 18 months ago would respond when the U.S. recovery took hold in the investment space they have been responding and that it would be another layer which is the exchange rate sensitive categories of exports.”
“If we do see the beginning of normalization of U.S. interest rates, it will be because the U.S. is confident in the upturn we are seeing, it will leave the upturn intact.”
“Conversations with corporate leaders show a great deal of caution, ‘When is it going to be sustained growth?’ A company survived that possibly by downsizing, or something like this, they are not going to be that immediately ready to add to their capacity and lean with an upturn, that tilting of animal spirits, which we think is really important.”
“We are seeing the ingredients of that in pockets and so as it becomes more unanimous, if you like, or more synchronized, then we will know we have got the self-sustaining move.”
“It has anchored expectations remarkably well for the past twenty years. For us it’s a very high bar to change that in any way. We think that it’s served us very well the last twenty years.”
“The conditions that we face now continue to favor continued growth in the housing market, and that of course has been the most important source of growth as we’ve gone through the last couple years. As we go forward, what we’re expecting and what we’re actually seeing is export growth in the non-resource sector. Key sectors connected to the U.S. recovery are picking up speed quite dramatically. There’s some great charts in the Monetary Policy Report from October which demonstrate this. So as they pick up, what will happen is the center of gravity for Canadian growth will shift away from housing, which probably has run most of its course, and as it kind of reaches a sustainable level, it’s exports in the non-energy, non-resource sectors which will come up and take its place. And we call that a rotation in demand ... It will be our traditional growth track, which is exports.” (Reporting by Fergal Smith and John Tilak in Toronto, and Randall Palmer and Leah Schnurr in Ottawa; Editing by James Dalgleish and Meredith Mazzilli)