The Bank of Canada released its April Monetary Policy Report, which discusses current economic and financial trends in the context of Canada’s inflation-control strategy.

Growth of the Canadian economy has been essentially in line with the Bank’s expectations as set out in the January Monetary Policy Report Update. But inflation has been higher than expected. After considering the full range of indicators, the Bank now judges that the Canadian economy was operating just above its production capacity in the first quarter of this year.
Over the projection horizon, domestic demand continues to be the main driver of growth in Canada. With the U.S. slowdown now expected to be somewhat more prolonged than previously projected, net exports should exert a slightly greater drag on growth in 2007. The Canadian economy is projected to grow by 2.2 per cent in 2007 and 2.7 per cent in both 2008 and 2009, returning to its production capacity in the second half of 2007 and remaining there through 2008 and 2009.

More on this report here at the Bank of Canada.