The governor of the Bank of Canada has reiterated the need to improve the efficiency of the financial system.

In a breakfast speech to the Ottawa Chamber of Commerce, David Dodge said an efficient financial system is critical to maintaining Canada’s international competitiveness and long-term economic health.

“In other speeches, I have talked about ways to encourage competition, transparency, and efficiency in Canada’s financial markets and institutions,” he said. “I won’t review these discussions today, but I do want to repeat that it is critical that Canada makes headway on these issues. “If Canadians want sustainable economic growth and prosperity, our financial system must function as efficiently as possible.”

He noted that market efficiency would benefit from adoption of the Uniform Securities Transfer Act. “The efficiency of our financial markets would be improved if provincial and territorial governments would proceed with legislation to replace the current patchwork of legal rules in this area and to provide a sounder legal basis for the holding and transfer of rights in securities that are held in book-entry form,” he said.

Dodge also noted that the strong dollar is taking its toll on goods-producing sectors such as auto parts, textiles, and clothing manufacturing, as well as service sectors such as tourism. “Firms in these industries are feeling the pressure of the higher Canadian dollar, and they are also facing increased competition from other regions of the world,” Dodge said.

“The good news is that many Canadian firms are making adjustments. Investment spending is being channelled towards increased specialization, higher productivity, and lower costs,” he said.

“There are powerful global economic forces at work, and economies everywhere need to adjust. Businesses in Ottawa, and in the rest of Canada, are making adjustments to meet these challenges and to take advantage of emerging opportunities,” he concluded. “At the Bank of Canada, we will continue to monitor these global forces closely and to assess their impact. We will continue to conduct monetary policy with the aim of keeping inflation close to our target and the economy operating at its full potential.”