The Bank of Canada held its overnight rate at five per cent on Wednesday, as Canada’s economy continues to slow and there are indications that supply and demand are now approaching balance.
Interest rate increases have dampened economic growth, with Canadian economic growth averaging one per cent this year. The economy is expected to remain weak throughout 2024, before picking up to 2.5 per cent in 2025.
“We’ve been expecting the economy to slow and the data we've been receiving is showing that slowly, and in fact, the economy has slowed a little more than we were predicting back in July,†said Bank of Canada governor Tiff Macklem during a press conference with reporters in Ottawa on Wednesday.
The bank said it remains concerned that progress towards its target rate of two per cent remains slow. Oil prices are higher than expected, and there is a risk they may go higher if the Israel-Gaza war turns into a regional conflict. On the domestic side, inflation expectations among households and businesses remain high, which also pose a risk to the central bank’s ability to get back to target, it said.
“Furthermore, businesses may be slower to adjust their pricing behaviour,†reads the Monetary Policy Report (MPR), released on Wednesday. “In addition, if the labour market remains tight or productivity growth remains weak, cost pressures could be higher and more persistent than projected.â€
In September, inflation was at 3.8 per cent, down from four per cent in August. The bank expects the consumer price index to remain at 3.5 per cent until the middle of next year, before easing back to its two per cent target in 2025.
Macklem would not rule out the need to raise rate higher, if underlying inflation measures begin to tick up again.
“There's always going to be a certain amount of volatility and headline CPI inflation,†said Macklem. “We've been very deliberate. We're leaving the door open to further interest rate increases because there is uncertainty about that and if we see inflationary pressures persist, we are prepared to raise our interest rate further.â€
Jules Boudreau, senior economist at Mackenzie Investments, thinks the next few rate decisions will be uneventful, with growth too soft to support hikes, but inflation too high to justify cuts.
“The bank will be forced to walk on the 5% tightrope for a few quarters,†he wrote in email to Â鶹´«Ã½. “But it won’t want to repeat its error from January, when it suggested that rates had reached their peak, before resuming hikes in June. The bank’s credibility took a hit.â€
High shelter costs are causing inflationary pressures in the Canadian economy. Canadian households are paying more in rental and mortgage costs. While delinquency rates on mortgages remain at an all-time low, the share of borrowers falling behind on payments by 60 days in other credit products has increased.
“In particular, delinquency rates for motor vehicle loans have surpassed pre-pandemic levels,†reads the MPR.
The central bank remains concerned the economy could slow down faster than it expects, with businesses and households cutting back on investment and consumer spending more than expected.
The bank also points to monetary policy tightening potentially triggering market volatility that could lead to sharp slowdowns in global growth.
“Monetary policy is tight in most advanced economies, and bond yields have risen sharply in recent weeks, reaching levels not seen since before the 2008-09 global financial crisis,†reads the release. “If the increase in yields proves to larger or more persistent than expected, equity and other asset prices could be negatively impacted further.â€
Macklem said the central bank is still not predicting a recession, but that a few quarters of near-zero GDP growth could also turn into a few quarters of negative growth.
“When people say the word recession I think what they have in mind is a steep contraction and output and a large rise in unemployment,†Macklem said. “We've been saying for some time that the path to a soft landing is narrow and in this projection that path has gotten narrower.â€
The next rate announcement is expected on Dec. 6. The next Monetary Policy Report is expected on Jan. 24.
It's been exactly three years since Canadian Michael Kovrig returned to Canada after spending 1,019 days in a Chinese prison. Now, he's publicly speaking out about his arrest and detainment for the first time.
Police say a toddler in Cambridge, Ont., who was reported missing early Monday morning, has since died.
The Canada Revenue Agency (CRA) has provided new data on the number of employees who were found to have received the Canada Emergency Response Benefit (CERB) during the COVID-19 pandemic.
Israeli strikes on Lebanon Monday killed more than 490 people, including more than 90 women and children, Lebanese authorities said, in the deadliest barrage since the 2006 Israel-Hezbollah war.
While many Canadians no longer stress as much about COVID-19 as they did during its peak, health experts say a new variant has been spreading in some parts of the world and is now present in Canada.
House of Commons Speaker Greg Fergus gave MPs a stern warning on Monday about improving their behaviour as they prepare for a fractious debate about whether the Liberals should continue to govern.
A new analysis of dozens of arrowheads is helping researchers piece together a clearer portrait of the warriors who clashed on Europe’s oldest known battlefield 3,250 years ago.
Beverly Glenn-Copeland says he's been diagnosed with dementia and will play his final concert tour dates over the next two weeks.
It was a tragic ending to the search for a six-year-old boy in northeastern Manitoba who had been missing since Wednesday.
On Sept. 20, Justice R.E. Nation of the Alberta Court of King's Bench found Craig McMorran guilty of fraud, money laundering and stealing a cottage from its rightful owners.
It's been exactly three years since Canadian Michael Kovrig returned to Canada after spending 1,019 days in a Chinese prison. Now, he's publicly speaking out about his arrest and detainment for the first time.
Authorities are investigating a report that violence erupted on a pickleball court in B.C.'s Lower Mainland over the weekend.
Police say a toddler in Cambridge, Ont., who was reported missing early Monday morning, has since died.
Ontario Premier Doug Ford says the Toronto District School Board (TDSB) should investigate how some students on a recent school field trip ended up at a rally where pro-Palestinian slogans were shouted.
The City of Ottawa says it is recruiting a 'nightlife council' to aid the city's recently appointed nightlife commissioner.
Malaysian police said Monday they have rescued 187 more children and raided locations nationwide linked to an Islamic business group that is being investigated for alleged sexual assault of children.
Israeli strikes on Lebanon Monday killed more than 490 people, including more than 90 women and children, Lebanese authorities said, in the deadliest barrage since the 2006 Israel-Hezbollah war.
A mentally ill man who killed 10 people at a Colorado supermarket in 2021 was convicted Monday of murder and faces life in prison.
The man accused in the apparent assassination attempt of Donald Trump at a golf course in Florida left behind a note saying that he intended to kill the former president and maintained in his car a handwritten list of dates and venues where Trump was to appear, the U.S. Justice Department said Monday.
Officials in Birmingham, Alabama, pleaded Monday with members of the public for information leading to arrests in a weekend mass shooting that killed four people and injured more than a dozen others, announcing rewards totaling US$100,000.
The Massachusetts State Police have suspended full-contact boxing training activities among recruits until further notice after a trainee died, a police spokesperson said.
Following another byelection loss in a riding long considered a Liberal stronghold, coupled with the news another minister is quitting cabinet — and opting to sit as an independent MP — the weekly panel of political strategists on CTV's Question Period weighs in on the Liberals' political fortunes.
Justin Trudeau will turn his focus to the ongoing crises in Haiti as he speaks with some world leaders Monday ahead of the 78th meeting of the United Nations General Assembly.
House of Commons Speaker Greg Fergus gave MPs a stern warning on Monday about improving their behaviour as they prepare for a fractious debate about whether the Liberals should continue to govern.
Private nursing agencies could cost Canadian health-care facilities approximately $1.5 billion in 2023-24, according to a new report commissioned by the Canadian Federation of Nurses Unions.
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There are 'no restrictions' on the right to receive health services in Quebec for English speakers, according to a new clarification document issued by the Quebec Health Ministry on Monday.
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A Soyuz capsule carrying two Russians and one American from the International Space Station landed Monday in Kazakhstan, ending a record-breaking stay for the Russian pair.
Beverly Glenn-Copeland says he's been diagnosed with dementia and will play his final concert tour dates over the next two weeks.
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The Juno Awards are casting a spotlight on Canadian-made South Asian music as part of broader changes to the annual celebration.
Canadian natural gas prices slumped to their lowest level in more than two years on Monday and are expected to remain under pressure for weeks.
Cosmetics brand Lush says it is laying off staff as it scales down operations at its Vancouver facilities.
Amazon.com Inc. says some customers in Canada can now start getting their packages delivered to their garage.
The City of Ottawa says it is recruiting a 'nightlife council' to aid the city's recently appointed nightlife commissioner.
One simple action involving your smartphone could help improve your mental health at work, according to a new study.
Alcohol-free beer has been gaining popularity in recent years as beer consumption shrinks.
Surfer Mickey Brennan says he's 'amazed' to be alive after wiping out in a giant wave off Tasmania.
The Toronto Raptors are planning to retire Vince Carter's jersey next month, sources tell TSN.
The Philadelphia Flyers had a former hockey coach help him Monday at training camp — the father of the late John and Matthew Gaudreau, who was an invited guest.
Canadian natural gas prices slumped to their lowest level in more than two years on Monday and are expected to remain under pressure for weeks.
The U.S. Commerce Department on Monday will propose a ban on the sale or import of smart vehicles that use specific Chinese or Russian technology because of national security concerns, according to U.S. officials.
Northvolt plans to cut 1,600 jobs at its base in Sweden, or about a fifth of its global workforce, as Europe's biggest hope in the electric vehicle battery market struggles with production problems, sluggish demand and competition from China.
Fire has destroyed a barn and 17,000 plants at a family-owned business in Lower Coverdale, N.B.
Before influencers on social media, Canada’s Jeanne Beker was bringing the world of high fashion down to earth and as Calgary’s Glenbow Museum gets a major make-over, it will include a new exhibition showcasing the pop culture icon.
A sea lion swam free after a rescue team disentangled it near Vancouver Island earlier this week.
A Nova Scotian YouTuber has launched a mini-truck bookmobile.
Cole Haas is more than just an avid fan of the F.W. Johnson Wildcats football team. He's a fixture on the sidelines, a source of encouragement, and a beloved member of the team.
Getting a photograph of a rainbow? Common. Getting a photo of a lightning strike? Rare. Getting a photo of both at the same time? Extremely rare, but it happened to a Manitoba photographer this week.
An anonymous business owner paid off the mortgage for a New Brunswick not-for-profit.
They say a dog is a man’s best friend. In the case of Darren Cropper, from Bonfield, Ont., his three-year-old Siberian husky and golden retriever mix named Bear literally saved his life.
A growing group of brides and wedding photographers from across the province say they have been taken for tens of thousands of dollars by a Barrie, Ont. wedding photographer.
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Mounties are asking witnesses to come forward after a woman was struck by a vehicle and seriously injured in a crosswalk in Nanaimo, B.C.
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A Toronto rapper who was charged in a fatal 2021 shooting has been released after a judge dismissed social media evidence in the case.
Ontario Premier Doug Ford says the Toronto District School Board (TDSB) should investigate how some students on a recent school field trip ended up at a rally where pro-Palestinian slogans were shouted.
A Brampton man has been charged with fraud after allegedly leading someone to believe they bought Guaranteed Investment Certificates (GICs) through a legitimate investment company in British Columbia.
The Alberta Medical Association (AMA) is urging the provincial government to implement a new compensation model for doctors and adopt a plan to stabilize acute care.
Calgary police have released a photo of a suspect wanted in connection with a fire in the community of Riverbend that damaged multiple homes.
A group of residents in the southeast Calgary community of Lake Bonavista are hoping their latest attempt to stop the city from ushering in blanket rezoning will fend off developers from looking to pave change in their community.
There has been an apparent spike in the number of reported violent crimes in Ottawa this month. Police Chief Eric Stubbs says it's a concern.
The Canada Revenue Agency (CRA) has provided new data on the number of employees who were found to have received the Canada Emergency Response Benefit (CERB) during the COVID-19 pandemic.
The City of Ottawa says it is recruiting a 'nightlife council' to aid the city's recently appointed nightlife commissioner.
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As the difficulties mount for battery manufacturer Northvolt, the PQ is calling for an emergency debate in the Quebec legislature on Tuesday to find out more about the agreement between the Quebec government and the Swedish multinational.
Quebec public health officials have issued a new warning to teachers and staff in schools across the province about the rising cases of whooping cough.
The Alberta Medical Association (AMA) is urging the provincial government to implement a new compensation model for doctors and adopt a plan to stabilize acute care.
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Emergency Crews including Regina Fire were called to a house fire in the community of Grand Coulee on Monday afternoon.
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The Saskatchewan Roughriders unveiled their special First Nation-designed logo ahead of Saturday's kisiskaciwan game, recognizing truth and reconciliation, against the Ottawa Redblacks.
Three people were killed Monday morning in a crash north of Wellesley.
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Fire crews are battling a blaze at the Candle Lake Golf Course clubhouse on Monday morning.
Eighteen years ago, country music star Paul Brandt sat down with his wife to watch a film that changed him forever.
A First Nation in northeastern Saskatchewan is conducting a search this week for potential unmarked graves.
A family dispute related to a property matter turned ugly over the weekend when a 71-year-old hit their head on the pavement after being pushed.
Officials in the City of Timmins say the state of Municipal Road, which connects Timmins and Iroquois Falls, is well beyond the patch-up phase.
Sara Cunningham, the first woman to lead the Greater Sudbury Police Service, has been a police officer since she was 21.
519 Meets organized a car rally in south London on Saturday in a Value Village parking lot, and it turned out to be their largest ever.
In early August, Gord Leaman proudly put up a billboard on his front lawn that says 'Screw Trudeau, Screw Singh, Capitalism not Socialism, and White Lives Matter.'
A London courtroom heard how frightened a woman was after she testified about the aggressive actions of a former London police officer.
Casino Rama announced three new performances will hit the stage this winter.
A Brampton man faces charges after police say a dispute over an unpaid bill at Blue Mountain Resort turned into a confrontation.
Provincial police laid charges in a luring and child pornography investigation involving an Orillia man who worked at a local recreation centre.
Current and former alumni and staff are remembering Dr. John Strasser for his personality, energy and foresight.
Windsor police have arrested one suspect and is looking for another after shots were fired during an altercation downtown.
Leela Thomas has been elected Chief of Walpole Island First Nation, leading a wave of change after weeks of protest and frustration aimed at the previous Band Council.
Mounties are asking witnesses to come forward after a woman was struck by a vehicle and seriously injured in a crosswalk in Nanaimo, B.C.
The NDP has shared a video of B.C. Conservative Leader John Rustad saying he regrets getting the "so-called vaccine" against COVID-19.
A 44-year-old man has been sentenced to two and a half years behind bars after he pleaded guilty to multiple break-ins at homes under construction across Metro Vancouver.
A pair of runaway pigs are in the custody of an animal sanctuary in the Okanagan after evading police and volunteers for hours earlier this week.
The Red Bridge, a historic landmark in Kamloops, B.C., was completely destroyed by fire early Thursday morning.
Animal protection officers in British Columbia have rescued three pit bulls – including one that gave birth to 10 puppies – from a rat-infested home in Kelowna.
Monday marked the official start of Reconciliation Week in Lethbridge.
A Medicine Hat man faces charges after police say they found him in possession of drugs and a .22-calibre pen gun.
Despite the heavy rain, plenty of muscle turned up for United Way’s annual Pull the Bus fundraiser in Lethbridge Friday.
After playing the lottery for more than 40 years, a Greater Sudbury woman made a huge windfall playing a scratch ticket game.
A family dispute related to a property matter turned ugly over the weekend when a 71-year-old hit their head on the pavement after being pushed.
Police in Sault Ste. Marie charged a 36-year-old suspect with drug trafficking and other charges following a weekend raid of a residence on Robin Street.
Newfoundland and Labrador sponsored a minor football team in England, now they’re about to play one of the biggest clubs in European soccer.
Newfoundland and Labrador's chief medical officer is monitoring the rise of whooping cough infections across the province as cases of the highly contagious disease continue to grow across Canada.
A 16-year-old biennial event aimed at fostering business in the country's eastern Arctic and northern regions has been cancelled indefinitely as a dispute unfolds between Inuit in Canada and a Labrador group claiming to share their heritage.
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