However, every credible scenario for oil left us with a significant issue for monetary policy. We have based our analysis on an assumption for oil prices of about $ per barrel for the next two years. Although this is above current levels, prices seem likely to move back above $ in the medium term.
The drop in oil prices is unambiguously negative for the Canadian economy. Canada’s income from oil exports will be reduced, and investment and employment in the energy sector are already being cut.