Total inflation is much lower, because of past declines in fuel prices. As the temporary effects dissipate, all these measures of inflation will converge on the underlying trend. The weak economic performance in the first half of this year means that Canada has more excess capacity, which is increasing the downward pressure on the underlying trend in inflation.
A regional capital market brings greater portfolio and risk diversification by providing domestic individual and institutional investors and savers a wider range of investment opportunities. As savers can diversify risk by choosing varied instruments, investors can have an optional mix of debt and equity. Besides, retail investors will benefit as costs are reduced and innovative providers compete for their business.