Bank of Canada declares recession over

Yesterday, the Bank of Canada (BoC) kept its overnight lending rate at 0.25%. Not much of a surprise, but interestingly, the BoC pretty much declared the recession is over.

In its press release that accompanied the rate decision, the BoC said, "Global economic activity appears to be nearing its trough, and there are increasing signs that activity has begun to expand in many countries in response to monetary and fiscal policy stimulus and measures to stabilize the global financial system."

The BoC went on to say that it has long anticipated economic growth in Canada would resume in the second half of this year and pick up in 2010. Indeed, growth in Canada "should resume this quarter." Clearly more definitive than what the US Fed has been saying.

Canada may be the smaller northern neighbor of the US, but it is an important trading partner. In May, the US exported $16 billion in goods to Canada versus $17.9 billion to the entire European Union, according to the US Bureau of Economic Analysis.

Although Canada appears to be emerging from the recession, the central bank reiterated its conditional commitment to hold policy steady until 2Q of 2010.