The Globe & Mail, April 21st, 2009
The Bank of Canada cut its benchmark lending rate to the lowest possible, and promised to leave it there for as long as a year in order to fight a recession that is deeper and will last longer than previously thought.

The central bank on Tuesday dropped its key overnight target a quarter-percentage point to 0.25 per cent, which is "the effective lower bound" because anything deeper would disrupt short-term money markets, policy makers said in a statement.

In January, Bank of Canada Governor Mark Carney was counting on multibillion-dollar stimulus programs pledged by governments in the Group of 20 major economies to reverse the effects of the financial crisis by the third quarter of this year. Those policies are taking longer roll out than policy makers anticipated, a delay that's exacerbating the downturn.

"The global recession has intensified and become more synchronous since the bank's January Monetary Policy Report Update with weaker-than-expected activity in all major economies," the statement said. "While more aggressive monetary and fiscal policy actions are under way across the G20, measures to stabilize the global financial system have taken longer than expected to enact.".Read More >