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By Susan Merivirta, Chief Financial OfficerCorporate News

Last week I attended a Monetary Policy Report Briefing by Deputy Governor Sheryl Kennedy of the Bank of Canada. This is a semi-annual session; it was not scheduled as a result of the current turmoil in the Financial system, although the timing couldn't have been better. Ms. Kennedy spoke for twenty minutes from her prepared notes, but dedicated the rest of the time fielding questions from the audience.

To summarize the Bank of Canada's latest Monetary Policy review:

• Tighter credit conditions, weaker external demand, and sharply weaker commodity prices have lowered the outlook for Canadian growth and inflation.
• Growth in Canada will be sluggish through the first quarter of next year, then pick up over the rest of 2009 and accelerate to above-potential growth in 2010.
• Total CPI inflation is projected to fall below 1 per cent in mid-2009 before rising to 2 per cent by the end of 2010. Core inflation will remain below 2 per cent until the end of 2010.
• Policy-makers in major countries have taken bold actions to address the financial crisis and its effects on the economy. Canada's economy and strong financial system will benefit directly from these actions.
• The policy interest rate has been lowered by a total of 75 basis points this month (October, 2008), 225 basis points since the beginning of December 2007. Some further monetary stimulus will likely be required to achieve the 2 per cent inflation target over the medium term.

What Ms. Kennedy said in "real English" was:

• The global economy is heading into a mild recession, led by a US economy that is already in recession and expected to pick up only modestly through 2009.
• Canada is positioned to weather the global financial crisis better than most countries. The regulation of the Canadian Chartered Banks has minimized many of the problems that are being encountered south of the border.
• Canada will not fall as deep into recession, and, will recover much quicker than other G7 countries.
• The Canadian government is recapitalizing its banks by providing them with cash or "guarantees" so as to keep money in the system for borrowing by businesses, particularly small businesses, who, in many cases, would not survive the withdrawal of "credit lines" during this period of instability.
• The lowering of the Canadian dollar over recent weeks will provide an important offset to the effects of weaker global demand and lower commodity prices.

At the end of the day, we need to believe that the financial crisis today will result in a stronger, more accountable World Economy a few years from now.

We have quoted this saying many times. It just seems even more appropriate right now...

There's no growth on the hills or peaks. The growth is in the valleys. The same applies to the peaks and valleys of life. There is no growth while you're on the mountain top. It's when you're in the valleys of depression that you grow and mature.

- Rev. Jimmy Snow, Words of Wisdom, page 121.