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The Bank of Canada is warning that high levels of household debt taken on during an extended period of low interest rates and a frenzy of real estate investment could destabilize the economy as rates start to rise.
Canadians who stretched their finances to buy into the white-hot real estate market are highly exposed to rising debt servicing costs, Bank of Canada deputy governor Paul Beaudry said Tuesday in a speech about the stability of the financial system.
The risk of a housing market correction has also increased over the past year as investors flooded into the market in a speculative rush, he said, driving up home prices and exacerbating Canada’s housing affordability problem. The average home price has jumped more than 30 per cent since the start of the pandemic.
A home for sale on Euclid St. in Toronto, is photographed on Nov 17, 2021. Fred Lum/The Globe and Mail.Fred Lum/The Globe and Mail
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Liberals focus on climate change and pandemic in Throne Speech
The Speech from the Throne delivered a stark warning about the planet’s future as Governor-General Mary Simon opened the 44th Parliament, describing a world “in danger” from climate change and urging legislators to turn “talk into action.”
The minority Liberal government’s plans emphasized limiting greenhouse-gas emissions, and highlighted two other key campaign pledges – “getting the pandemic under control” and growing a “more resilient economy.” The speech mentioned the economy often, but had just one reference to inflation, which is leading to the biggest surge in prices in almost two decades.
- Campbell Clark: Same answers, but Liberals start to fret over new inflation question
- Early signs of Liberal leadership ambitions as Freeland biography in works
- Bloc pledges support for new bill to scale back COVID-19 benefits, which could be introduced this week
At the Darien Gap, migrants in Colombia stay on a perilous path despite Biden’s efforts to deter them
For months, Freddy Pestana Herrera has watched migrants pass through this roadless corner of northwestern Colombia, their backs laden with packs and their eyes trained on a muddy, slippery path intersected by tangles of roots and torrents of running water. These are the opening steps into the Darien Gap, a wild, water-soaked region that divides South America from North America – and a popular destination for migrants seeking to make their way overland to the United States. This year, 95,000 people have made the trip, more than ever before.
The migrants must navigate about 80 river crossings to get to the Panama border and then travel through untamed jungle. Now another barrier awaits them – the efforts of a U.S. administration that has reached far beyond its own borders to slow their path.
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ALSO ON OUR RADAR
B.C. offers funding to families affected by floods: British Columbia is offering $2,000 in emergency funding to the thousands of families pushed out of their homes by last week’s floods and mudslides, as people in the southwestern part of the province prepare for more heavy rain this week.
- Western Newfoundland facing multi-day deluge as storm envelops Atlantic region
- Gary Mason: Canada’s climate reckoning is upon us. The costs of ignoring the warnings will be enormous
Parents across Canada rush to book COVID-19 vaccines for children: With 2.9 million pediatric vaccines now in Canada, tens of thousands of parents are rushing to book appointments. Demand has been high at the onset – but it remains unclear how many parents will inoculate their children after the initial dash.
Rogers-Shaw deal bad for competition, rival says: Rogers Communications Inc.’s $26-billion takeover of Shaw Communications Inc. would “greatly reduce” competition and choice for consumers of broadcasting services, rival Telus Corp. told Canada’s telecom and broadcast regulator yesterday.
- Editorial: Is the Rogers-Shaw deal good for Canadians?
Western aid workers in Afghanistan face a near impossible task: After the U.S. and its allies withdrew their military presence from Afghanistan, bringing along with them embassy staff from around the world, international aid workers made the crucial decision to stay in the Taliban-controlled country to try to feed a starving population and to do what they can to protect the gains from the past 20 years.
Opposition demands release of documents on fired scientists: Federal opposition parties are pushing the Liberal government to release secret documents on the firing of scientists Xiangguo Qiu and her husband, Keding Cheng from Canada’s highest-security laboratory. The Globe and Mail has reported that the RCMP are investigating whether the two scientists passed on Canadian intellectual property to China, including to the Wuhan Institute of Virology, while working at the National Microbiology Laboratory in Winnipeg.
MORNING MARKETS
Markets await U.S. data: Global stocks recovered some lost ground on Wednesday as crude prices lifted oil companies, but rising COVID-19 cases in Europe, weaker economic sentiment in Germany and a bagful of U.S. data ahead of Thanksgiving were a focus for investors. Around 5:30 a.m. ET, Britain’s FTSE 100 added 0.11 per cent. Germany’s DAX and France’s CAC 40 fell 0.35 per cent and 0.32 per cent, respectively. In Asia, Japan’s Nikkei lost 1.58 per cent. Hong Kong’s Hang Seng rose 0.14 per cent. New York futures were down. The Canadian dollar was trading at 78.87 US cents.
WHAT EVERYONE’S TALKING ABOUT
Cathal Kelly: “On Monday, The Globe’s Andrew Willis broke news that Rogers is not not open to someone taking a chunk of the Jays off his company’s hands. The apparent leading candidate – himself.... This isn’t regime change. It’s shuffling money between the chequing account and the savings account. Whatever happens, Rogers (the corporation, the person or some combination thereof) will remain in charge. That means more of the same.”
Eric Morse: “Half a provocation is a provocation still. Think of our young people in the place of the two Michaels and ask whether the risk to them is worth it. When observers are beginning to wonder increasingly whether travel to China is safe, we should not take the risk of shovelling Canadian athletes into the wolf warrior’s maw. There should be a boycott indeed, but if Canada is to go that route, it must be all or nothing.”
TODAY’S EDITORIAL CARTOON
Brian GableBrian Gable/The Globe and Mail
LIVING BETTER
Travel deals for trips now or in the new year
Black Friday and Cyber Monday are traditionally some of the best times to book travel. The deals available are incredible, and the travel dates are flexible. So, if you’ve been thinking about booking a trip sometime soon or for the new year, you’ll want to do it soon as these deals won’t last.
MOMENT IN TIME: NOVEMBER 24, 1874
East Texas farm owner rolling up old barbed wire near Harleton, Texas, April 1939.Russell Lee/Library of Congress
Patent is issued for barbed wire
One of the great American myths is that the Winchester rifle, the locomotive and the telegraph “won” the West. The real story of what changed the United States is more mundane. It was barbed wire – which had been in existence for almost a decade before it was improved upon and successfully patented by Joseph Glidden, a farmer from DeKalb, Ill., on this day in 1874. Glidden figured out how to create and mechanically produce a pointed metal barb that was trapped between two twisted wires so it wouldn’t slip. The barb could stab and cut like a knife if inadvertently brushed against. The invention changed ranching – and property rights – almost overnight. Farmers and landowners loved it, because it ended the need for expensive wooden fences. No longer could livestock – or Native American tribes, which had been living on the U.S. frontier for 15,000 years – freely roam the country. The cheap and easy-to-erect fencing killed the cattle drive (and thus cowboys) and buffalo migration. Indigenous people called it “the devil’s rope” because it helped enforce boundaries where none had previously existed. But its proliferation enclosed the land at a rapid pace, and the mythical Wild West was won – and done. Philip King
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Tuesday’s Morning Update contained an incorrect link to the article “Drowned animals in B.C. are a further facet of a flawed farming system.” Read the story here: https://www.theglobeandmail.com/opinion/article-drowned-animals-in-bc-are-a-further-facet-of-a-flawed-farming-system/
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