Bank of Canada governor Tiff Macklem says he expects 2024 to be a transition year as higher interest rates slow down the economy, making way for lower inflation.Nathan Denette/The Canadian Press
Getting caught up on a week that got away? Here’s your weekly digest of the Globe’s most essential business and investing stories, with insights and analysis from the pros, stock tips, portfolio strategies and more.
Bank of Canada’s Macklem expects inflation to be ‘close to’ target by late 2024
According to Bank of Canada Governor Tiff Macklem, 2024 will be a “year of transition.” In his end-of-year speech in Toronto, he said inflation could be “getting close to” the bank’s 2-per-cent target by the end of next year. He also said the bank’s governing council has not begun discussing interest rate cuts, but would start easing monetary policy once it’s confident that inflation is “on a sustained downward track.” Mark Rendell also reports several changes to the bank’s communications in 2024, such as press conferences to follow each of its eight annual decisions.
Canadians are paying highest portion of disposable income toward debt on record
This week’s figures on household debt are a sign that Canadians continue to feel the financial strain of interest rates. The debt service ratio, which measures how much of a typical household’s disposable income is going to pay back loans and cover interest payments, rose to 15.22 per cent in the third quarter, said Statistics Canada. Put another way, the average household is spending around 15 cents of every after-tax dollar to service their debt. It is now at its highest level since records began in 1990. And that record level of debt stress is likely to climb even higher as many homeowners have yet to renew their mortgages at higher interest rates, Matt Lundy reports.
Why electric SUV and crossover sales are booming
The number of new electric vehicles hitting the roads in Canada continues to surge, mainly driven by the sales of battery-powered SUVs and crossovers. Canadians registered roughly 457,800 new vehicles in the third quarter, according to Statistics Canada, and over the same period the combined sales of battery electric and plug-in hybrid vehicles jumped 62 per cent. Most of that growth came from zero-emission SUVs and crossovers, specifically one model – the Tesla Model Y, which is now Canada’s most popular electric vehicle. Why? Jason Kirby takes a closer look in the latest Decoder.
Canada’s long, difficult road to becoming an electric vehicle ‘superpower’
Speaking of electric vehicles, Canada is struggling to carve out supply chains for their batteries despite tens of billions of dollars in subsidies. It may be one of a small handful of democratic countries that has reserves of the minerals required to make lithium-ion batteries, but so far, Canada has been a tiny player in all but one of the battery metals. In the latest piece from The Globe’s Mission Critical series, Matthew McClearn documents the long path to catching up to rival countries such as China, South Korea and Japan, and the challenges faced getting from the mine to the motor.
Whistle-blower alleges government coverup over report on green-tech funding agency
A whistle-blower alleged this week that Industry Minister François-Philippe Champagne’s office softened the final report of an investigation into Sustainable Development Technology Canada, a federal foundation that finances the development of green technologies, to protect the federal agency’s senior leadership. The former SDTC employee testified before a House of Commons industry committee that the federal government knew for several months of serious financial and governance infractions, and in the end covered up the full extent of the problems. Mr. Champagne has denied the whistle-blower’s allegation, Jeffrey Jones reports.
Why Winnipeg is the most livable city in Canada for raising kids
The latest instalment of Canada’s most livable cities series looks at the top place for raising kids – Winnipeg, Man. Salmaan Farooqui spoke to Winnipeggers who say the city’s relative isolation may be part of the reason why it scored so highly on the list. It has no other major population centres near it to drive up demand for housing, or to add to lengthy commute times. Plus, the cost of living is much lower than other Canadian cities. “You get to take part in things that you maybe wouldn’t otherwise be able to in a larger city, like playing sports, using the rivers, having access to close schools and communities and all the sorts of amenities families look for,” said Jino Distasio, a professor at the University of Winnipeg.
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