Several factors really.
1 - recovering global economy
2 - housing market asset price bubble
3 - high/unsustainable levels of household debt
4 - inflation targetting
5 - demand management.
With regard to the inflation targeting and demand management, if you saw today's paper you'll see that unemployment is now at 5.6%, the lowest since 1989, despite an increase in the participation rate. This is a signal that we are in "an expansionary gap" and unemployment may be below the Natural rate ---> tightened interest rates may then be seen as a strategy to just slow the economy down for a bit so as to prevent inflationary pressures that usual result when growth is outpacing the long-term economic trend (in terms of long-run phillips curve, there is only so much by which you can reduce unemployment - after that its merely a case of keeping a cap on inflation).
In terms of our exhorbitant trade balance. Theoretically raising interest rates will reduce import expenditure and thus help our CAD. However our demand for imports is rather inelastic, and a 25basis point rise isn't that extensive (tho it may be symbolic to some, and for those with large mortgages it may be enough to rein in spending). So the more immediate effect, as can be seen by yesterday's and today's exchage rates, is that speculation and capital inflow will cause an appreciation in the dollar, which will cause imports to be cheaper and exports to be more expensive > thereby worsening the CAD, but still serving to reduce AD (tightening mp).
If tighter monetary policy, does in the medium term however assist in keeping inflation down, this could help exports by making them more competitive, but in this low inflation/deflationary climate even our nice 2-3% is higher than that of other countries and without a currency depreciation, may not be too significant a factor.
