Canada’s terms of trade - that is, the ratio of the prices that Canadians receive for their exports to the prices that they pay for their imports - have improved by about 15 per cent since late 2001, generating higher real incomes and stronger domestic demand in Canada.
BIS Review 44/2005  1  How has the Canadian economy reacted to these higher prices and stronger demand? In the Bank’s April Monetary Policy Report, we noted that we have seen increased business investment spending in oil and gas extraction, other mining activity, and wood-product manufacturing.