In the public sector, governments moved to reduce distortions in the economy, by eliminating many industrial subsidies, lowering income taxes, and putting the Canada and Quebec Pension Plans on a sustainable basis. Further, the government made changes to its system of unemployment insurance, basing the program more on insurance principles and improving the employability of labour.
With that background, I will now provide you with more clarity about the Committee’s approach to strengthen the capital regime, building on the three pillars of the Basel II framework. Any enhancements will be introduced in a manner that promotes the near term resilience of the banking sector and its ability to provide credit to the economy.