The BoC rate hike, Indigo’s exodus and a clawback of COVID benefits: Business and investing news for June 11

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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 raises key interest rate to highest level in 22 years

The Bank of Canada raised its benchmark interest rate by a quarter percentage point on Wednesday, restarting its campaign to tighten monetary policy. The decision lifts the policy rate to 4.75 per cent, the highest level since May, 2001, pushing up mortgage rates and squeezing household budgets. Governor Tiff Macklem announced a “conditional pause” to interest-rate increases earlier this year in the belief that borrowing costs were high enough to cool the economy and bring down inflation over time. Mark Rendell reports, however, this has not unfolded as expected.

Ottawa’s clawback of COVID-era benefits is hurting the poor and punishing for small errors

Ottawa has sent $4.6-billion to individuals who weren’t eligible for pandemic benefits such as the Canada Emergency Response Benefit (CERB) and the Canada Recovery Benefit (CRB). Now, the federal government is under pressure to recover those billions of dollars. Critics, however, believe the debt recovery clawback has been unnecessarily harsh toward low- and modest-income Canadians who made small mistakes and now owe more than $10,000 or $20,000. Erica Alini reports on how the debt collections, along with poor communication from the Canada Revenue Agency, is hurting those who can least afford it.

Canadian gold exports rise with U.S. uncertainty

There’s an ongoing pattern when it comes to the global economy: When uncertainty rises in the United States, apparently so does gold’s share of Canada’s total exports. Statistics Canada reported this week that Canada’s export volumes rose to an all-time high in April, surpassing prepandemic levels. The biggest driver of that rise was exports of gold due to shipments from Canadian financial institutions to south of the border. All this comes against a backdrop of unease over Washington’s debt-limit fight and fears of a recession. Jason Kirby takes a closer look in this week’s Decoder.

Canadian gold exports rise with uncertainty

U.S. economic uncertainty

index

Gold as percentage

of total exports

350

9%

8

300

7

250

6

200

5

4

150

3

100

2

50

1

0

0

2007

2009

2011

2013

2015

2017

2019

2021

2023

the globe and mail, Source: Statistics Canada,

Policyuncertainty.com

Canadian gold exports rise with uncertainty

U.S. economic uncertainty

index

Gold as percentage

of total exports

350

9%

8

300

7

250

6

200

5

4

150

3

100

2

50

1

0

0

2007

2009

2011

2013

2015

2017

2019

2021

2023

the globe and mail, Source: Statistics Canada,

Policyuncertainty.com

Canadian gold exports rise with uncertainty

U.S. economic uncertainty index

Gold as percentage of total exports

350

9%

8

300

7

250

6

200

5

4

150

3

100

2

50

1

0

0

2007

2009

2011

2013

2015

2017

2019

2021

2023

the globe and mail, Source: Statistics Canada, Policyuncertainty.com

Indigo sees nearly half its board exit; founder Heather Reisman to retire

Indigo Books & Music Inc. IDG-T announced on Wednesday that four of its 10 board members have stepped down: Frank Clegg, Howard Grosfield, Anne Marie O’Donovan and Dr. Chika Stacy Oriuwa. Departing member Dr. Oriuwa resigned “because of her loss of confidence in board leadership and because of mistreatment.” Indigo also announced that company founder Heather Reisman will retire later this summer. According to Susan Krashinsky Robertson and David Milstead, the departures occur amid a challenging period for the Toronto-based retailer. In February, a cyberattack took down the retailer’s e-commerce operations and leaked sensitive information about current and former employees.

Car thefts in Canada reach ‘national crisis’ levels

Canada’s auto insurance industry lost more than $1-billion in 2022 from stolen vehicles. According to a report from Équité Association released Tuesday, that figure is up from $700-million in 2021. Clare O’Hara reports that organized crime rings helped push up car thefts by nearly 50 per cent in Ontario and Quebec, particularly targeting newer SUVs that were produced after 2017. Several insurers are now offering incentives to policyholders in certain areas – or those with high-risk vehicles – to install tracking devices for free.

Adult kids are spending thousands a year to support their parents

How common is it for adult kids to help parents financially? Rob Carrick recently asked readers in this situation to provide insight – and the results are in. The survey found that the overwhelming reason why adult kids are financially supporting their parents today is insufficient retirement savings. More than 52 per cent cited a lack of retirement savings, while another 10 per cent said their parent or parents had outlived their savings. He recommends having a conversation with your parents about their retirement savings, so you can be prepared.

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Now that you’re all caught up, prepare for the week ahead with the Globe’s investing calendar.