Good evening, let’s start with today’s top stories:
The Bank of Canada has warned that household vulnerabilities have worsened over the past year and could lead to stress in the financial system as people struggle to service their debts.
In its latest Financial System Review, the central bank identified high levels of household debt and elevated home prices as the top two vulnerabilities, saying they could even result in a financial crisis.
The cost of borrowing has spiked over the past few months and is expected to continue on that path as the Bank of Canada aggressively raises interest rates to combat high inflation.
“Our primary focus is getting inflation back to target. Monetary policy is not housing policy,” central bank Governor Tiff Macklem said at a news conference. Higher interest rates have already slowed real estate activity, with sales declining nationwide and home prices falling in some of the country’s hottest markets. Several private-sector economists have forecast double-digit declines in prices this year, but the central bank said it was too soon to say whether this was the start of a substantial correction.
Macklem also said the central bank may need to raise its benchmark interest rate to 3 per cent or higher to bring inflation under control, and that the bank’s governing council is open to larger rate hikes if needed.
Read more:
- Is it too late to lock into a fixed-rate mortgage?
- Gordon Pape: Bank of Canada blunders could bring a housing market crunch
This is the daily Evening Update newsletter. If you’re reading this on the web, or it was sent to you as a forward, you can sign up for Evening Update and more than 20 more Globe newsletters here. If you like what you see, please share it with your friends.
Canada would need to spend $75-billion more over half a decade to reach NATO defence spending target, report says
Canada has fallen so short of its NATO commitment to devote 2 per cent of annual economic output to military spending that it would cost $75-billion over the next half-decade to catch up, a new report by a parliamentary budget watchdog says.
The North Atlantic Treaty Organization is a military alliance dedicated to the collective defence of its 30 members, including Canada. In 2006, NATO defence ministers agreed to commit a minimum of 2 per cent of their gross domestic product to defence spending to ensure the alliance’s readiness. In 2014, they renewed that commitment.
Parliamentary Budget Officer Yves Giroux says while Canada will make some progress, there’s no chance the country will meet its NATO goal over the next five years at the government’s level of military spending.
Read more:
- Photographer Anna Liminowicz examines the loss and pain the Ukrainian refugee crisis will have on future generations
- Street fighting intensifies in Ukrainian city of Sievierodonetsk as Russia concentrates its forces
Anna Liminowicz/The Globe and Mail
Air Canada cancels almost 10% of Toronto flights over seven days as staffing crunch, passenger surge hit Pearson airport
Air Canada cancelled about 360 flights at Toronto Pearson in the first seven days of June – almost 10 per cent of its schedule – amid staffing shortages and a surge in passengers at Canada’s busiest airport.
The cancellations were split between arrivals and departures, according to Cirium, the aviation data company that provided the numbers to The Globe and Mail.
A rebound in demand for air travel has overwhelmed the government agencies that conduct security, customs and immigration checks at Pearson and other major Canadian airports. The aviation industry says its reduced work force is unable to manage the increase in passengers while still enforcing COVID-19 rules. Vaccine mandates for employees of federal agencies and airlines have also reduced staff numbers, the industry says, as some employees refused to be vaccinated.
ALSO ON OUR RADAR
Testimony by former Trump aides to be in spotlight as U.S. Capitol riot hearings open: The congressional hearings on the 2021 assault on the U.S. Capitol by Donald Trump supporters will spotlight testimony by the former president’s top aides and family members as a House committee seeks to persuade Americans that the riot was an orchestrated attack on democracy.
Canadian universities still partnering with Huawei despite 5G ban over security: Leading Canadian universities say they intend to continue research and development with Huawei Technologies Co. – which reaps intellectual property from the partnerships – after Ottawa’s decision to ban the Chinese telecommunications giant from 5G wireless networks over national-security concerns.
CIBC to boost base salaries and minimum wage for majority of staff: Canadian Imperial Bank of Commerce is matching rival banks by raising base salaries for a majority of employees by 3 per cent, and is also boosting its minimum wage paid to entry-level staff. The increase to base salaries for employees at the lower end of its pay grade will take effect in July.
Phil Mickelson among 17 golfers suspended by PGA Tour for playing LIV event: The PGA Tour suspended longtime fan favourite Phil Mickelson and all other members who decided to join the Saudi-backed LIV Golf Invitational Series that began on Thursday and said anyone else who makes the jump will face the same fate.
U.S. advances probe of Teslas running into emergency vehicles: A U.S. investigation into Teslas operating on partially automated driving systems that have crashed into parked emergency vehicles has moved a step closer to a recall.
MARKET WATCH
North American stocks tumbled Thursday following the latest reminder that central banks now care more about fighting inflation than propping up markets.
In New York, the Dow Jones industrial average was down 638.11 points or 1.9 per cent at 32,272.79. The S&P 500 index was down 97.95 points or 2.4 per cent at 4,017.82, while the Nasdaq composite was down 332.04 points or 2.8 per cent at 11,754.23.
The S&P/TSX composite index closed down 228.54 points or 1.1 per cent to 20,563.89. The Canadian dollar traded for 79.09 cents US compared with 79.74 cents US on Wednesday.
Got a news tip that you’d like us to look into? E-mail us at tips@globeandmail.com. Need to share documents securely? Reach out via SecureDrop.
TALKING POINTS
Does François Legault have Quebec sovereignty up his sleeve, after all?
“When future historians identify the moment when the Quebec sovereignty movement emerged from its early 21st-century coma, they may point to a May 29 speech that Premier François Legault made calling for more power over immigration.” – Konrad Yakabuski
The Nova Scotia inquiry is prioritizing the trauma of police over the trauma of victims’ families
“If the foremost aim of this inquiry is indeed to piece together how and why a killer was permitted to terrorize an entire province for 13 hours, then it should operate from a position that puts disclosure and transparency first, that includes all information by default, and that thoroughly questions all involved individuals.” – Robyn Urback
Ontario has a new Doug Ford, and the same old fiscal challenges
“But the emergency is over. And in an era of inflation and rising interest rates, so is free money. It’s back to reality: Ontario can no more tax less and spend more than you can lose weight by simultaneously upping caloric intake and couch time.” – The Editorial Board
LIVING BETTER
Nine mouth-watering pink wines to savour this summer
Ekaterina Molchanova
Rosé fans are spoiled for choice at this time of year. The selection on store shelves, online kiosks and restaurant wine lists is seldom better. Christopher Waters shares new releases he’s tried recently. Certified organic and vegan-friendly, Adobe is an affordable selection of wines made by Chile’s Emiliana Vineyards. A blend of syrah, cabernet sauvignon and merlot, the Adobe Reserva Rosé Organic 2021 has bright and refreshing flavours that touch on some black currant and cherry accents as well as the expected berry and citrus notes.
TODAY’S LONG READ
Through roller hockey, Colombian women are playing rough and taking on the world
Corazonistas roller-hockey team during a match in Bogota, Colombia on May 14, 2022.YADER GUZMAN/The Globe and Mail
For the women of the Corazonistas roller-hockey team in Bogota, the sport provides many different values. For some, it’s an opportunity to represent their country on the world stage, perhaps to study abroad and see the world; for others, it’s a time for oneself, away from the demands of work and motherhood. But for all, it’s a shared passion.
The club belongs to the Colegio Corazonista – a Catholic school where many of the players were first introduced to the sport and for whom they continue to play long after they’ve graduated.
In a country with no ice-hockey rinks, where football and cycling reign, the roller-hockey community is a tight-knit group. The Corazonistas club is one of eight women’s teams spread out across Colombian cities including Medellin, Cali and Manizales. Read the full story by Yader Guzman.
Evening Update is written by Prajakta Dhopade. If you’d like to receive this newsletter by e-mail every weekday evening, go here to sign up. If you have any feedback, send us a note.