Evening Update: BoC’s Tiff Macklem says potential recession will be less severe than earlier downturns

Good evening, let’s start with today’s top stories:

The Canadian economy may be on track for a recession this year, but it won’t feel as severe as other downturns the country has experienced over the past few decades, according to Bank of Canada Governor Tiff Macklem.

“It’s not going to feel great. But it is not going to feel like what people think of when you say the word recession,” Mr. Macklem said in an appearance before the House of Commons finance committee on Thursday. “You say recession, [most people] think big job losses, very, very painful.”

The central bank is forecasting near-zero economic growth through the first three quarters of 2023, as higher interest rates constrain consumer spending and business investment. It expects the rate of unemployment – which remains near an all-time low – will rise in the coming months. “But this is still going to be a pretty healthy labour market,” Mr. Macklem said. “This is not going to feel like the kind of recessions that we had in 08, or 81 or 91.”

• Senate calls for more transparency from Bank of Canada
• Persistent inflation has investors betting on rate hikes
• More interest rate hikes needed to combat inflation, Fed’s Loretta Mester says

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Emergencies Act inquiry’s final report to be released Friday

The final report of the inquiry studying the federal government’s unprecedented decision to invoke the Emergencies Act to quell anti-vaccine-mandate, anti-government protests will be released in Ottawa on Friday.

Justice Paul Rouleau will release the report just days before the legally binding deadline of Feb. 20. The inquiry is mandated by law to study and report on the circumstances that led to the emergency declaration –the first time that the sweeping federal powers were invoked – and the measures taken by the government to deal with the protests.

The Public Order Emergency Commission, held public fact-finding hearings from Oct. 13 to Nov. 25, hearing from 76 witnesses, including top police brass, Ottawa residents, convoy organizers, a host of federal ministers and Prime Minister Justin Trudeau.

• Brenda Lucki leaving her post as RCMP commissioner
• A look at RCMP Commissioner Brenda Lucki’s time in office

John Tory lays out timeline for departure as Toronto mayor

After presiding over a chaotic city council meeting Wednesday that approved his municipal budget, Toronto Mayor John Tory finally laid out his timeline for leaving office.

The 68-year-old mayor will hand over power effective 5 p.m. Friday, in the wake of his admission last week to a lengthy affair with someone who had been on his staff. Councillor Jennifer McKelvie, deputy mayor, will take on the job as interim leader. McKelvie says she will not run in the upcoming by-election to choose a new mayor and instead will focus on a “smooth transition” and governing the city.

Under city rules, the next election will be held four to five months from now. Council must declare the post of mayor vacant at its next meeting, near the end of March, which will kick-start a nomination process and then a campaign period.

Palestinians sense a new intifada coming as young people focus their anger on Israel’s resurgent right

The international community considers East Jerusalem occupied territory. But the Silwan valley, which holds importance to the Jewish community as the historical site of the City of David, has been among the flashpoints that have brought a bloody start to this year.

Earlier this month, CIA director William Burns said the increase in violence is reminiscent of the fraught moments that preceded the second intifada, the violent uprising in 2000 that left thousands dead. Of the dozens already dead this year, many weren’t yet born in 2000. Their youth underscores a generational cycle of brutality, but also reflects an increased bleakness after Benjamin Netanyahu returned to power in Israel with hard-right support.

A January poll by the Palestinian Center for Policy and Survey Research found a 10-point decline in support for a two-state solution, the lowest since the survey began in 2016. Sixty per cent of Palestinians and two-thirds of Israeli Jews say they believe another intifada is beginning. “Trust is declining to new low points,” the centre reported.

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ALSO ON OUR RADAR

Ottawa announces new Canada Innovation Corp. aimed at commercializing research: Promising that it “will not be just another funding agency,” the federal government is launching a new Canada Innovation Corp. that promises to help businesses commercialize their research and protect intellectual property.

Georgia grand jury suspected perjury in probe of Trump election interference: Some witnesses may have lied under oath during a grand jury probe of former president Donald Trump’s efforts to overturn his 2020 election defeat in Georgia, according to excerpts from the panel’s findings released on Thursday.

Teck Resources is exploring spin-out of coal operations: The company is exploring a spin-out of its steelmaking coal division, or other ways to exit one of its largest businesses, as part of a strategic shift in mining copper and zinc.

Royal Conservatory of Music chief Peter Simon to depart next year: During his tenure, the Toronto-based conservatory has undergone massive development and become one the world’s largest music education institutions. But Simon, 73, says the institution’s next phase of growth requires a younger person in the leadership role.

MAID eligibility should expand, report recommends: Canada should expand assisted dying to include mature minors and patients with mental illnesses, and allow people with illnesses such as dementia to make advance requests for euthanasia, a parliamentary committee report tabled in the House of Commons recommended this week.

• Quebec tables legislation to allow advance requests for medical assistance in dying

Ukraine pounded by missiles, Russia eyes Bakhmut: Russia rained missiles across Ukraine on Thursday and struck its largest oil refinery, Kyiv said, while the head of the Wagner mercenary group predicted the long-besieged city of Bakhmut would take weeks if not months to fall.

• Canada to provide $21-million for Ukraine demining efforts, humanitarian assistance
• Life, upended: Nine stories from Ukraine’s refugees on starting over after fleeing Russia’s war

MARKET WATCH

Wall Street ended sharply lower on Thursday after unexpectedly strong inflation data and a drop in weekly jobless claims added to fears that the U.S. Federal Reserve will keep raising interest rates to tame high prices. The TSX tracked the move, although losses were capped by slight gains in the heavily weighted financials and materials sectors.

The S&P/TSX composite index was down 113.97 points or 0.55 per cent at 20,606.42

In New York, the Dow Jones industrial average was down 431.20 points, or 1.3 per cent, at 33,696.85. The S&P 500 index was down 57.19 points, or 1.4 per cent, at 4,090.41,while the Nasdaq composite was down 214.76 points, or 1.8 per cent, at 11,855.83.

The Canadian dollar traded for 74.41 cents US compared with 74.57 cents US on Wednesday.

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TALKING POINTS

Canada isn’t broken, but Canadians are at the breaking point

“Canada is not broken. We continue to live in a prosperous, peaceful and tolerant land that we are blessed to call home. But millions of Canadians are under great stress, and governments are not moving swiftly enough to their aid.” – The Editorial Board

LIVING BETTER

There are a wealth of great new (and new-ish) movies to lift your winter blues and help power you through the remaining cold-comfort days. Keep an eye out for new black comedy Cocaine Bear, directed by Elizabeth Banks and starring Keri Russell. It’s based very loosely on a real-life incident in which a 500-pound black bear accidentally ingested a drug delivery that was lost by traffickers. Supernatural comedy We Have a Ghost is sort of like Beetlejuice with shades of The Frighteners, writes Barry Hertz, starring David Harbour of Stranger Things fame, with supporting performances from Jennifer Coolidge and Tig Notaro. That will hit Netflix on Feb. 24. See Hertz’s full list.

TODAY’S LONG READ

Training with champion skier is a humbling, and heartening experience

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“Last week, I waited at the base station of the funicular in St-Luc, the neighbouring village to Chandolin in Switzerland’s Val d’Anniviers, in the sunshine of the late afternoon,” writes journalist Simon Akam. “I’d just completed my final day of instruction before moving up the valley with Christophe Hagin, the head of Chandolin’s ski school. We’d had a red-letter day under bluebird skies, off-piste runs back-to-back, including some of the steepest ground I’d ever skied.”

“I was exhausted, though, and a little apprehensive given I’d grafted onto that downhill work a stint in the other direction, the uphill tussle with gravity that is the heart of this project. But I was still looking forward to meeting one of the area’s preeminent competitive ski mountaineers, 25-year-old Maximilien Drion.”

“Drion notched second and third places in World Cup events in Andorra early this year. In 2018 he won the ‘Petite’ Patrouille des Glaciers, the short-course variant of the race I hope to take part in next year, covering 30 kilometres and 1,900 metres of climb in 2 hours 44 minutes. In 2019 Drion was also filmed in a less formal but no less dramatic event: He raced a ski lift uphill, and comfortably won.” Read the full story on Akam’s experience training with Drion.

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.