The Canadian economy’s Cinderella status is being eroded by SARS and mad cow disease. Add a weak American economy to the mix and Ottawa has decided to restate its growth expectations. Finance Minister John Manley said Tuesday that Canada’s gross domestic product may grow by an average of only about 2.2% this year instead of the 3.2% predicted only four months ago.

Despite this gloomy news, investors aren’t expected to react because analysts have seen this coming and say that it’s already been priced in to the markets.

Investors and currency traders are awaiting a speech by Bank of Canada Governor David Dodge at 11:30 ET in Halifax.

There may even be reason for some optimism due to recent economic releases from south of the border, say some analysts. The White House, the Congress, the Treasury and the Fed are acting together to restart the American economy.

And despite the GDP news, Ottawa’s coffers are full, according to a report released Wednesday by Statistics Canada. Driven by increased consumer demand in 2002/03, revenues from consumption taxes helped to push the consolidated government surplus to $8.3 billion from $6.7 billion in 2001/02. A surge of $8.2 billion in consumption taxes, plus an extra $4 billion in property taxes and contributions to the Canada and Quebec pension plans, offset a $7.5 billion reduction in income tax collections. Overall revenues increased by $7.4 billion to $473.8 billion.

StatsCan is also reporting increased investment from foreign investors. Foreigners added $4.8 billion to their holdings of Canadian securities in April, their third consecutive month of large investments. At the same time, Canadian investors continued to buy large amounts of foreign bonds, while reducing their holdings of foreign equities.

Asian markets closed mixed overnight. Tokyo’s Nikkei gained on expectations that exporters will profit from a stronger U.S. dollar. It closed up 59.97 points, or 0.66%, at 9,092.97 points.

In Hong Kong, shares closed lower as profit-takers swept up recent gains. The Hang Seng Index dropped 60.07 points, or 0.6%, to 9,970.3.

In London, the FTSE 100 index is up 0.4% at midday. Frankfurt’s DAX has gained 0.13% and Paris’s CAC 40 has risen 0.19%.