OECD's annual survey of the Canadian economy. Part I examines the reasons for the hesitant recovery and discusses short-term projections. Part II reviews the economic policy setting within the framework of the government's medium-term strategy; particular emphasis is put on the effects of the inflation-reduction targets. Part III addresses the specific structural topic of the survey, Canada's competitiveness - broadly defined as the country's ability to meet the test of international markets while maintaining or improving relative living standards - which has been in the center of public debate recently. Policy conclusions arising from the analysis presented are discussed in Part IV.