Ok so I usually stay far away from quoting Canadian banks (sometime I "steel" their diagrams), but one of my competitor has had interesting things to say about Canadian productivity and the labor market, fundamentally original research on complex topic. As an example their take on Canadian productivity is that it doesn't compare to the US because of very important difference. Don't agree with all their arguments, but they have a valid point on certain aspects.
The bank of Canada has taken a position that the Canadian labor market is still relatively "slack", but this bank takes a very different view, especially because part time work is such a small percentage of the workforce (yeah you read that right). They take the view that in fact the labor market is tight (for full time employment).
(Source: Da Bank, BLS, StatsCan)
The implication is that the BoC has less room to operate than is implied by the futures market (no rate hike for before 2013). Canada is still a few percentage points away from the "overheating" zone but is getting closer. Moreover, the Canadian labor market poorly reflect regional disparities. Carney and friends must be "praying" for a European/Chinese/American economic slow down. Otherwise, the BoC will have to take action.
It would seem that the 4am "resolution" in Europe has taken the risk of severe recession in the region to "after Christmas. Everyone is going to pat themselves on the back after this latest effort. Next year European governments will figure out that when government expenditure falls in an economy where it accounts for nearly half of GDP, then GDp doesn't rise, it falls. The banks' liquidity problems are still present (hence the strength of the Euro -- as they repatriate cash). America is depressed but sales of "stuff" is rising -- depletion of savings! While China -- no one knows.