Bank of Canada
                                   Indicators of Capacity and Inflation Pressures for Canada
                        Updated: 19 October 2006          Page 1          Next release: 7 December 2006

                                         Inflation (year-over-year percentage change)
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                                     2004Q4  2005Q1  2005Q2  2005Q3  2005Q4  2006Q1  2006Q2  2006Q3  2006Q4  Latest data
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Core
inflation                            1.6     1.8     1.6     1.6     1.6     1.7     1.8                     2.0Aug

CPI excluding food, energy, and the effect
of changes in
indirect taxes                       1.1     1.4     1.2     1.4     1.4     1.4     1.6                     1.9Aug

CPIW                                 1.8     1.7     1.7     1.9     1.8     1.8     1.8                     1.5Aug

Weighted
Median                               1.8     1.9     1.7     2.2     2.1     2.5     2.1                     2.2Aug

CPI Inflation                        2.3     2.1     1.9     2.6     2.3     2.4     2.6                     2.1Aug

Chain price
index for GDP                        3.6     3.0     2.3     3.4     4.1     3.7     2.8                     2.8Q2

Chain price
index for
consumption                          2.0     1.7     1.4     1.9     1.7     1.8     1.7                     1.7Q2

Chain price index for consumption
excluding food
and energy                           1.1     0.9     0.8     1.0     1.0     0.9     0.8                     0.8Q2

                                                        Product market
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                                     2004Q4  2005Q1  2005Q2  2005Q3  2005Q4  2006Q1  2006Q2  2006Q3  2006Q4  Latest data
===============================================================================================================================
Output gap (Bank of Canada's
conventional
measure)                             0.3     0.2     0.3     0.4     0.3     0.5     0.3     0.4             0.4Q3*

Capacity utilization rate
  Non-farm goods
  (%) (1987-2001
  avg. = 82.51)                      86.3    86.3    86.0    86.3    86.0    85.7    85.5                    85.5Q2

  Manufacturing
  (%) (1987-2001
  avg. = 81.72)                      84.5    84.9    84.2    84.3    84.2    83.7    83.1                    83.1Q2

Bank of Canada Regional Office Survey
Difficulty meeting an unanticipated
increase in demand/sales (% firms)   45.0    37.0    43.0    45.5    49.6    44.6    47.6    46.6            46.6Q3

Unfilled orders/shipments - Manufacturing excluding aerospace
products and
parts                                0.50    0.53    0.54    0.56    0.56    0.58    0.58                    0.55Aug

Aggregate
stock-to-sales
ratio                                0.630   0.630   0.630   0.619   0.613   0.622   0.632                   0.632Q2

* As shown in the most recent issue of the Monetary Policy Report.