This statement is from 2009 when low interest rates started. Can we stay at this level forever? No. Did we? No.
Mark Carney’s comments on economic stimulation done : Bank of Canada Governor Mark Carney said on Wednesday:
In total, since December 2007, we have cut interest rates by 425 basis points to their historic lows and lowest possible levels. It is the Bank’s judgment that this cumulative easing, together with the conditional commitment to keep rates low for a considerable period, is the appropriate policy stance to move the economy back to full production capacity and to achieve the 2 per cent inflation target.
Given I suspect there wasn’t much else that could be done in terms of interest rates and such, this really is the default statement Mr. Carney can make. The Bank of Canada is unlikely to stimulate more or cut interest rates. This is not a big surprise. It is nice to see they are going to try to keep these rates low for a while too.
What about our recovery from the Great Financial Apocalypse?
As a result of the current global economic and financial situation, the Bank now projects that the Canadian recession will be deeper than we projected in the January MPR Update. Our return to growth will be delayed by one quarter, to the end of 2009, and our recovery will be somewhat more gradual.
Whoops, the recovery that was due mid-year is now pushed to the end of the year. There is a chance that it may happen a little later than that. Again, not a real big surprise. The entire automobile industry has to get its "poop" together first. We are in the middle of the economic upheaval caused by this.
Wow Mr. Carney, do you have anything positive for us?
- While there remains a high degree of uncertainty particularly with the Canadian economy dependent on forces beyond our borders we remain confident in the prospects of eventual economic recovery in Canada.
- This recovery should be supported by the following factors:
- the gradual rebound in external demand;
- the end of the stock adjustments in Canadian and U.S. residential housing;
- the strength of Canadian household, business, and bank balance sheets;
- our relatively well-functioning financial system and the gradual improvement in financial conditions in Canada;
- the past depreciation of the Canadian dollar;
- stimulative fiscal policy measures;
- the timeliness and scale of the Bank's monetary policy response.
OK! Well don't give yourself whiplash patting yourself on the back just yet either. We need a weaker dollar, households to start spending, a stock market rally and an increase in demand? I am seeing signs of some of these things, but certainly not all of it yet!
Still useful to hear an expert's point of view on our economic world, I guess.
💰📉🍁2025 Addendum on Stimulation
“Stimulation” was the word of the day back in 2009—and here we are again, in 2025, watching governments inject cash into economies like espresso into a Monday morning.
The question remains: how much stimulation is too much?
Interest rates have see-sawed. Central banks walked a tightrope between inflation and recession. Meanwhile, new stimulus packages—green energy, affordable housing, digital infrastructure—have flooded every level of government spending.
Don’t get me wrong—people needed help. Businesses needed lifelines. But after trillions in COVID recovery, pandemic-era subsidies, and climate transition programs, we now ask: is this still recovery… or dependency?
Signs You Might Be Overstimulated
- 👷 Housing markets that bounce back despite rate hikes.
- 📈 Consumer debt that won’t quit, even with high interest rates.
- 🧾 Tax revenue stretched while inflation quietly chips away.
- 💡 Governments needing to "stimulate the stimulus."
And yes, we’ve seen this movie before. 2009 gave us bailouts. 2020 gave us CERB. 2025? We're in the sequel: Stimulation 3: The Budget Awakens.
The real question: Is this energy going into growth... or into keeping the lights on?
At some point, we need structural reform, not just financial injections. Infrastructure is great. So are green jobs. But if every hiccup leads to another stimulus, we’re not building resilience—we're just subsidizing fragility.
Enough stimulation, big boy. Time to stand on our own economic feet again.
