Paul Vieira, Financial Post  Published: Tuesday, December 9th, 2008  

OTTAWA - The Bank of Canada surprised markets Tuesday with a deeper-than-expected 75-basis-point cut to its benchmark-lending rate, to 1.5% a 50-year low, as it warned that Canada is entering a recession and global economic conditions are deteriorating at a deeper rate than anticipated.  "The outlook for the world economy has deteriorated significantly and the global recession will be broader and deeper than previously anticipated," the bank said. "While Canada's economy evolved largely as expected during the summer and autumn, it is now entering a recession as a result of the weakness in global economic activity. The recent declines in terms of trade, real income growth, and confidence are prompting more cautious behavior by households and businesses."