The main risk is the size and duration of the negative impact of the oil shock, weighed against the positive forces that are building in the non-energy export sector. Our outlook is for the positives to begin to reassert themselves during the second quarter, and to do so clearly in the second half of the year.
The interest rate cut of January and the lower Canadian dollar are working to speed up the transition. To give just one example, exporting companies with existing contracts denominated in U.S. dollars are seeing an immediate 8 per cent increase in Canadian-dollar cash flow, and will be able to compete more aggressively for future sales.