Our basic guidance is to focus on solid businesses with healthy balance sheets that have withstood historic stress since this recession got going in late 2007. We’re interested in companies that generate sustainable dividends.

There are in fact signs that the worst is over. But the worst was unlike anything most of us have ever seen. Bank of Canada Governor Mark Carney, in a public speech last week, advised his audience, “Just as you don’t count your chickens before they are hatched, we shouldn't presume that green shoots today guarantee a bumper crop tomorrow. It is a long, anxious time between the appearance of seedlings and the harvest.”

Canada’s official data agency reported Wednesday that the pace of decline in its broad measure of economic activity slowed in May to 0.1 percent, the smallest in a series of nine consecutive declines. And the shift from a 0.9 percent drop in April is the largest month-to-month change in either direction since December 1965.

Since the S&P 500, the S&P/TSX Composite Index and the S&P/TSX Income Trust Index bottomed on March 9, the two Canadian indexes have correlated more with the MSCI Asia All Country ex-Japan Index. In other words, Canada’s stocks have become more and more levered to the global economy, including areas in Asia where signs of economic recovery are easier to see.

The 170 billion barrels of recoverable reserves can help mitigate North American concerns about global security without causing extreme planetary degradation. The key is for US and Canadian policymakers to coordinate climate policy, combining efforts to regulate greenhouse gas emissions, for example, by at least linking their respective cap-and-trade proposals that are almost sure to be enacted within the next 12 months.

Needless to say, opposition leaders are crowing about Mr. Flaherty’s lack of facility for numbers, and it’s rumored that at least one critic will ask for his resignation as early as this afternoon. At the same time, however, Liberal Party and New Democratic Party leaders are calling for increased aid to unemployed workers, what’s known in Canada as Employment Insurance (EI), and further steps to increase Canada’s stimulus package.

It hasn’t happened yet, but Prime Minister Stephen Harper’s lieutenants are laying the foundation for a fall 2009 visit by Canada’s top elected official to the country that looms as the most significant X-factor in the global economy.

Global warming continues to melt the ice in the Northwest Passage and the competition for northern resources is heating up. Canada, the authors warn, may be forced to defend this area from a position of grave weakness.

That conditions seem to be stabilizing in the critical US housing market and that domestic activity in China is picking up--which means rising demand for Canada’s commodities--are encouraging signs that February’s GDP improvement has legs.

Part of the loonie’s winning streak can be traced to the BoC’s stance on quantitative easing--that it won’t immediately create money out of thin air reduced the threat of an inflationary spiral.