In addition to these risks, we are faced with a great deal of uncertainty about the trend growth rate of potential output in Canada. We are fairly confident in our assessment of the contribution of labour force growth to future potential output. However, there is a lot of uncertainty about the trend rate of productivity growth.
We use the past trend rate – roughly 1.5 per cent – as the basis for our projection of future productivity growth. But recent data on productivity have been disappointing.