Douglas Porter, Deputy Chief Economist & Managing Director, BMO Capital Markets presented a view of the global economy at the recent annual meeting of the Canadian Chamber of Commerce. Here is a copy of his presentation on September 26, 2010.

1. GLOBAL OUTLOOK:
DOUBLE DIP OR SINGLE SLOG?
September 26, 2010
Douglas Porter, CFA
Deputy Chief Economist & Managing Director, BMO Capital Markets
BMO Capital Markets™
1-800-613-0205 www.bmocm.com/economics Your ambition achieved.™

3. Financial Markets See-saw
(as of September 24, 2010)
Stocks Canadian Dollar Commodities
1600 16000 (US¢) 150 4.50
105
1400 14000
100 120
Copper 3.75
(US$/lb:
1200
TSX 12000 95
rhs)
3.00
(rhs)
90
90
1000 10000 2.25
S&P 85
800 500 8000
60 Oil 1.50
(lhs) 80 (US$/bbl:
lhs)
600 6000 75 30 0.75
08 09 10 08 09 10 08 09 10
Concerns: US Slowing, Europe Debt, China Tightening
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Recovery Gears Down
(q/q % chng : ar)
08 09 10 11
Real GDP Canada 0.5 -2.5 3.0 2.5
US 0.0 -2.6 2.7 2.2
8
Canada
4
US
0
Recession Gauges:
Length Depth
-4
US 18 mnths -4.1%
Canada 3 qtrs -3.3% forecast
-8
04 05 06 07 08 09 10 11
Expansion Will Be Moderate
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Page 1-2

4. Job Losses in Perspective
(y/y % chng)
Cumulative Chng
in Recession % Level
Employment Canada -2.4% -417,000
6 US -6.1% -8.4 mln
4
Canada
2 2.4%
0.2%
0
US
-2 -2.4%
-4 Record
-4.7% US recession
-6
75 80 85 90 95 00 05 10
US Recession Much Worse
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Jobless Rates Will Fall Gradually
Unemployment Rate (percent)
11 Spain 20.3
10 9.6% Ireland 13.6
Greece 11.0
9
US Portugal 10.8
8 Lagging Indicator France 10.0
8.1%
Canada Belgium 8.9
7
5.9% Finland 8.3
6 Sweden 8.2
33-year Low
5 4.4%
Germany 6.9
forecast Japan 5.2
4 Australia 5.1
04 05 06 07 08 09 10 11
UK 4.5
US Job Creation Slow
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Page 3-4

5. Canadian Housing Chills, US Freezes
Home Sales Existing Home Prices Housing Starts
(mlns : ar) (y/y % chng : 3-mnth ma) (2005 = 100 : 2-mnth ma)
9 0.6 20 120 Canada
Canada
(rhs) Canada
8 100
0.5 10
7 80
0.4 0
6 60 US
US
0.3 -10
5 US 40
(lhs)
4 0.2 -20 20
03 05 07 09 03 05 07 09 03 05 07 09
Home Sales: US = Existing + New Canada = Existing
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Tepid Consumer Recovery
08 09 10 11
Canada 2.9 0.4 3.4 3.1 Personal Savings Rate
US -0.3 -1.2 1.5 2.2
(% of disposable income : 4-qtr ma)
Real Consumer Spending 7
(y/y % chng)
6
6 US
5
Canada
3 4
US 3 Canada
0
2
forecast
-3 1
06 07 08 09 10 11 06 07 08 09 10 11
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Page 5-6

6. Changing Gears
Vehicle Sales (mlns : ar)
21 2.1 20
US
18 1.8
Canada 15
(rhs)
15 US 1.5
(lhs) China
10
12 1.2 Crossover
Canada: Aug = estimate
9 0.9 5
05 06 07 08 09 10 05 06 07 08 09 10
(3-mnth ma)
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Global GDP: The Great Divide
2010:Q2 (y/y % chng)
08 09 10 11
World 3.0 -0.6 4.2 3.7
Real GDP Eurozone 0.3 -4.0 1.6 1.5
China 10.3
India 8.8
Brazil 8.8
Korea 7.2
Canada 3.4
US 3.0
Japan 2.4
Eurozone 1.9
UK 1.7
0 2 4 6 8 10 12
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Page 7-8

7. Canadian Exports: Where Now?
Canadian Exports (% of total)
United States Europe & Emerging Markets
85 16
80 14
12
75 Emerging
10 Markets
70 Europe
8
65 6
60 4
75 80 85 90 95 00 05 10 75 80 85 90 95 00 05 10
Must Broaden Markets
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Loonie & Commodities: The Ties that Bind
Canada (as of September 24, 2010)
1000
120
110
800
C$
(US¢ : rhs) 100
600 90
BoC 80
400
Commodity
Price Index 70
(lhs)
200 60
95 97 99 01 03 05 07 09
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Page 9-10

8. OECD Fiscal Landscape
2010 (% of nominal GDP)
Deficit vs Debt
TROUBLE
15
UK
12 Ireland US
9 Spain France Greece Japan
Portugal
6 New
Zealand Canada Italy
3 Australia Germany
Deficit
0
Surplus
-3
-60 -30 0 30 60 90 120
Net Debt
Dots represent countries in the OECD, except Norway, which has huge assets
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Canadian Dollar Outlook: Still Looking Up?
(US¢ : as of September 24, 2010)
Canadian Dollar Positives:
110
Parity
Rate Hikes
100
Global Diversification
90 [Current]
97.58¢ Sounder Finances
80
70
forecast
60
03 04 05 06 07 08 09 10 11
Downside Risk: Sovereign Debt Spillover
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Page 11-12

9. Inflation Below 2%
Consumer Price Index (y/y % chng)
Canada United States
6 6
[Core]
[Total]
3 1.7% 1.6% 3
Core 1.1%
Core
0 0
Total Total 0.9% ...and
Falling
forecast
-3 -3
07 08 09 10 11 07 08 09 10 11
HST Made Little Impact
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Monetary Policy Tightens in Canada First
(% : as of September 24, 2010)
Overnight Rate 10-year Bonds Fixed Mortgage Rate
6 6 7.0
US forecast
5 5 6.5
US
4 4 2.80% 3.50% 6.0
Canada Canada
3 3 3.50%
(Year-end 5.5 (5-yr)
’11)
US
2 Canada 2 [Current] 2.55%
(Year-end 5.0 (30-yr)
Canada 2.87% ’10)
1 Canada 1.00% 1 US 2.61% Current 4.5
Spread
US 0% - 0.25% 26 bps
0 0 4.0
05 07 09 11 07 08 09 10 11 07 08 09 10 11
BoC Tightens Bond Yields Will Rise... Eventually
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Page 13-14

10. Global Equities: New Challenges
(y-t-d % chng : as of September 24, 2010)
Equity Markets
Germany 5.7
DJIA 4.1
TSX 3.9
UK 3.4
S&P 500 3.0
Brazil -0.6
Australia -4.7
Spain -10.2
Japan -10.2
China -20.1
Greece -31.1
-35 -30 -25 -20 -15 -10 -5 0 5 10
S&P 500: Correction Japan: Bear
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Constraints on Growth
Fiscal Restraint
Tight Credit
Jobless US
Cooling Emerging Market Growth
Strong C$
Equals Single Slog
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Page 15-16