Bank of Canada Governor David Dodge reiterated the Bank’s bullish outlook for the Canadian economy at a speech in Halifax today.

The economy has been growing robustly, and well above expectations, says Bank of Canada governor David Dodge said.

Along with strong consumer spending, Dodge noted that business investment is no longer acting as a drag on growth, and that corporate profits are rebounding, which should continue to support business investment. He made these remarks during a speech to the greater-Halifax municipal partnership.

“While this domestic performance bodes well, geopolitical uncertainties and weaker profits among large multinational firms may inhibit a strong rebound in investment around the world for a period of time,” he said. But he noted that Canada’s economy is moving towards full production capacity more quickly than we had expected, and that core inflation has also been running slightly higher than anticipated.

Recalling last week’s rate hike, Dodge said that it “was the second increase in the target rate, aimed at withdrawing some of the substantial amount of monetary stimulus in the economy. With the domestic economy showing strong momentum, the Bank will take whatever action is necessary to keep inflation near its 2% target over the medium term.”

Dodge also discussed the need among Canadian financial markets for trust and transparency to operate efficiently. The Bank of Canada’s reliance on trust and transparency shows why these qualities are also important to the private sector. “Trust is an important enabler for all of the Bank of Canada’s key functions,” said Dodge.

He added that this trust “can be thought of as a form of social capital-a shared asset that benefits everyone.” This lesson is particularly relevant to the private sector in the current climate, he added, where investor confidence have been shaken and reputations have been threatened by the collapse of Enron. “Investors must be able to trust that corporate disclosures are made fully and fairly and in an understandable way.”