It must be complemented by other policies: policies that seek to improve the structure of our economy; policies that seek to enhance the skills and flexibility of our workforce; policies that seek to make Canadian product and labour markets more efficient. In addition, all levels of government must continue to reduce their net indebtedness.
This is extraordinarily important if we as a nation are to become less vulnerable to external shocks and to prepare for the pressures of a shrinking working-age population. Inflation-control targets and a flexible exchange rate Let me now talk briefly about the role of the inflation-control targets and the floating exchange rate in Canadian monetary policy.