Global economic lethargy has started to hinder Canada’s economy and exchange traded fund (ETF), but the government has acknowledged the necessity of taking action.

The Canadian economy will receive a good jolt as the the Bank of Canada cut key interest rates on Tuesday by .75% to 1.5%, an impressive 50-year low, reports Ian Austen for The New York Times.

After staying relatively isolated from the crisis stemming from mortgage and banking woes, Canada has accepted that it is entering a recession because of global slowdown and the effects of deteriorating energy and commodity prices, coupled with drops in exports to the United States.

Prime Minister Stephen Harper has stated that additional fiscal policies, such as a stimulus package, will also be needed to address problems in specific sectors of Canada’s economy, write Randall Palmer and David Ljunggren for Reuters.

Specifically, the Conservative government is being pressured to help struggling automakers and potentially save thousands of jobs in the auto sector.

Hopefully, ameliorating effects of cut rates and potentially a future stimulus plan may boost the straggling Canadian ETF iShares MSCI Canada Index (EWC), which is currently down 49.8% year-to-date.

Tags: Canada, Commodity ETFs, EWC, Sector ETFs