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The Bank of Canada is warning that inflation rates could stall around 3 per cent for the next year, before hitting the 2-per-cent target by the middle of 2025. Wednesday’s rate hike, with which interest rates hit 5 per cent, brings the policy rate to a level not seen since April, 2001.
Consumer spending, the job market and the housing market have not responded to rate hikes in the way analysts expected. Population growth, a tight labour market, accumulated savings and spending by the federal and provincial governments are among the explanations the BoC pointed to for the resilience to high interest rates. Delinquency rates for household debt are rising but they’re still lower than prepandemic. Meanwhile mortgage delinquencies are near all-time lows, even for households with a variable-rate mortgage.
The bank didn’t give away any hints about future rate decisions, but BoC governor Tiff Macklem did not close the door to future hikes.
”If new information suggests we need to do more, we are prepared to increase our policy rate further. But we don’t want to do more than we have to.”
Read more:
- Variable-rate mortgage borrowers under pressure again as BoC hikes rate to 5 per cent
- David Parkinson: Bank of Canada is cautiously pessimistic about inflation, but will it be proven right?
- Steve Ambler, Jeremy Kronick: Bank of Canada’s latest interest rate hike may be one too many
The Bank of Canada wording on a Canadian $50 bill is pictured in Ottawa on Jan. 11.Sean Kilpatrick/The Canadian Press
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By keeping Ukraine out of NATO, some allies leave door open to negotiations with Russia
NATO has committed to continue equipping Kyiv with military equipment, training, cyberdefence, and intelligence as Russia’s invasion stretches into its 503rd day. These are the first formal promises the West has made to Ukraine since the start of the invasion in 2022. Still, NATO has not provided a timeline or invitation for Ukraine to join, which leaves the postwar future of Europe ambiguous.
Mark MacKinnon writes that this is by design. U.S. President Joe Biden and other NATO leaders are walking a fine line between defending Ukraine against Russian aggression, while leaving room to compromise with Russian President Vladimir Putin when the time comes to make peace.
After all, at some point there must be an agreement made with Russia, and Ukraine’s status with NATO and its geopolitical security relationships will be important objects of negotiation. The possibility that NATO may expand to include Ukraine has long been cited by President Putin as justification for the invasion in the first place. Some allies view leaving Ukraine out of NATO as a possible avenue for a peace agreement.
Ottawa says it can’t commit to Manitoba landfill search without province’s support
Crown-Indigenous Relations Minister Marc Miller says it is “logistically impossible” for the federal government to search a Manitoba landfill for the remains of two First Nations women this summer without support from the province. Manitoba Premier Heather Stefanson said that her government would not finance the search, citing potential health risks because of the presence of contaminants in the landfill.
Morgan Harris and Marcedes Myran were murdered by a Winnipeg man, alongside two other women, in what police have described as a serial killing. Winnipeg police announced in December that the remains of Harris and Myran are believed to be in the Prairie Green landfill, which prompted calls from Indigenous communities for the government to do a search. The Assembly of Manitoba Chiefs assessed what a search would entail, and concluded that though it would be costly, it was possible. Minister Miller said the staffing and logistics of the search would fall under provincial jurisdiction.
Stefanson defended the move during a meeting of Canada’s premiers in Winnipeg this week, saying premiers “have to make difficult decisions” and that she stands by hers.
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Also on our radar
Pharmacare: Health benefits provider GreenShield is introducing a no-cost prescription drug plan on Thursday, a pilot project offering access to essential medications for underserved communities who do not have public or private prescription drug coverage.
B.C. port strike: Labour Minister Seamus O’Regan sent the terms of a federal mediator’s contract proposal to the union and employers on Wednesday, setting a 24-hour deadline for responses in hopes of ending a walkout that has disrupted billions of dollars of trade.
Sexual assaults at Nova Scotia youth centre: The RCMP are investigating at least 70 cases of sexual assault that allegedly took place between 1988 and 2017 at a youth detention facility in Nova Scotia. All 70 of the initial cases involved males.
Indigenous policing: The Assembly of First Nations is calling on the federal government to give Indigenous communities more of a say in how it allocates and uses funding for policing on reserves. The federal government has said it can’t give funding to First Nations who don’t agree to the government’s terms and conditions.
Bangladesh Rohingya refugee camps: Camps holding Rohingya refugees in Bangladesh have becoming increasingly unsafe amid “surging violence,” according to a new report that says the country’s authorities are not doing enough to protect them from unrest spilled across the Myanmar border.
Maternal deaths in America: Pregnant Afrodescendent women and girls across the Americas are more likely to die during childbirth than almost every other racial and ethnic group because of systemic racism in health care, according to a report from the United Nations. The discrepancy is the largest in the United States.
Morning markets
Rate hopes buoy world stocks: Global stocks traded around their highs for the year on Thursday as investors bet that the Federal Reserve was finally taming inflation and could soon end its rate hiking cycle.
Just after 5:30 a.m. ET, Britain’s FTSE 100 was up 0.29 per cent. Germany’s DAX and France’s CAC 40 gained 0.56 per cent and 0.62 per cent, respectively. In Asia, Japan’s Nikkei rose 1.49 per cent. Hong Kong’s Hang Seng finished up 2.6 per cent. New York futures were positive.
The Canadian dollar was higher at 75.96 US cents.
What everyone’s talking about
Memo to Mayor Chow: Don’t forget about Toronto’s other property tax
“Over the years, the city has come to rely on land-transfer tax revenues. But it’s time to consider whether that is the fairest way to raise money, and whether the tax should go easier on first-time buyers, many of whom are struggling to pull together a down payment.” - The Editorial Board
Why was a Syrian torture survivor flagged as a national security risk in Canada?
“Applications for these visas are usually processed within a matter of months, yet Noura and Bahr waited on an answer for three years, with no further clarification as to why Noura’s application was flagged. It took an international advocacy campaign for Canadian authorities to relent and for Noura and Bahr to become permanent residents.” - Emile Dirks
Today’s editorial cartoon
Editorial cartoon by Brian Gable published July 13, 2023. NATO.Illustration by Brian Gable
Living better
Sustainable seafood is top notch and plentiful in Canada. These three recipes prove it
Karen Pinchin shares three recipes you can enjoy knowing they’re sustainably sourced – from how they’re harvested to their distribution:
- ShanDaph Oysters with Strawberry Black Pepper Mignonette
- Summer Crunch Tuna Crudo with Sweet Citrus Oil
- Crobster Roll
Moment in time: July 13, 1939
American singer and actor Frank Sinatra performs with Harry James and his Orchestra on stage at a concert for American servicemen at the Hollywood Canteen in California on Aug. 16, 1947.CBS Photo Archive/Getty Images
Frank Sinatra makes recording debut
Before he was known as Ol’ Blue Eyes or Chairman of the Board, a skinny Hoboken, N.J., kid named Frank Sinatra was called Bones or Hoe Handle as he sang on street corners in his hometown. While still a teen he joined three other musicians to become The Hoboken Four and by 1935 they were singing on the radio. It wasn’t to last. Mr. Sinatra left the group a year later and went back to crooning at Elks Clubs meetings and Italian weddings. He became a singing waiter and MC at a roadhouse joint known as the Rustic Cabin. In June of 1939, Harry James of the Harry James Orchestra heard Mr. Sinatra there and loved his smooth, heartfelt voice. On this day in 1939, Mr. Sinatra, known for his piercing blue eyes that made teeny-boppers swoon, made his recording debut – a two-year contract at $75 a week – with Mr. James. The 78-rpm record was From the Bottom of My Heart, which went nowhere. But a year and a half later, he was singing with the Tommy Dorsey Orchestra and two years after he went solo and launched an entertainment career that lasted more than 50 years. Philip King
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