In this edition:
- Bank of Canada cuts key interest rate to 3.25% with slower pace of cuts going forward
- What economists are saying about the Bank of Canada and interest rates
- Seaway cargo shipments down in November; grain and potash still top movers
- Big expansion at Smithville pet food manufacturer Big Country Raw on schedule
- Ontario expands largest competitive energy procurement in province’s history
- Canada’s international investment position, third quarter 2024
- Focus on Climate
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Bank of Canada cuts key interest rate to 3.25% with slower pace of cuts going forward
The Bank of Canada lowered its interest rate by 50-basis points to 3.25 per cent on Wednesday, but signalled a slower pace of rate cuts moving forward as it focuses on keeping inflation close to target.
Economists were largely expecting another weighty cut following a quarterly GDP report that saw growth come in below the central bank’s 1.5 per cent projection and a jobs report that showed an uptick in the unemployment rate.
The decision marked the fifth consecutive reduction since June. In October, the central bank cut rates by a half-point for the first time since the pandemic.
Picture credit: alexey_arz – stock.adobe.com
What economists are saying about the Bank of Canada and interest rates
The second jumbo-sized cut in a row brings the central bank’s rate to the top end of its neutral range – where borrowing costs neither stimulate nor impede growth – of 2.25 per cent to 3.25 per cent.
But the economic landscape is shifting under its feet as signs emerge that inflation could be on the rise again, and consumer spending and the housing market show signs of life on lower borrowing costs.
Taking that into account and the uncertainties Donald Trump‘s upcoming second term pose for the Canadian economy, here is what economists think the Bank of Canada will do in 2025.
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Seaway cargo shipments down in November; grain and potash still top movers
Shipments on the 3,700-kilometre Great Lakes St. Lawrence Seaway were down at the end of November, according to figures released by St. Lawrence Seaway Management Corp.The seaway said 32.3 million tonnes of cargo were moved, a 2.25 per cent drop from last year’s 33 million tonnes.
Jim Athanasiou, the seaway’s president and chief executive officer, said in a news release that contributing to the North American economy and strengthening the supply chain remain key priorities for the agency as the navigation season begins to wind down.
Grain (up 12.10 per cent) and potash (up 8.35 per cent) shipments continue to drive traffic on the waterway that links the Great Lakes with overseas ports. Canada is the world’s largest producer and exporter of potash, exporting 95 per cent of production to more than 75 countries.
Picture credit: Big Country Raw – bigcountryraw.ca
Big expansion at Smithville pet food manufacturer Big Country Raw on schedule
With work proceeding on schedule, Big Country Raw on Spring Creek Road in Smithville is set to nearly double in size by next spring.
“We’re adding on a large addition to the backside of the building on the north side,” said Rob Brouwer, who with his wife Geraldine, began making raw, minimally processed dog and cat food from their home in the nearby West Lincoln community of St. Ann’s in 2008, before expanding their operation and moving it to Smithville in 2018. “It’s on schedule and things are moving along well.”
Brouwer said construction of the nearly $9 million (including a $1.5 million loan from the province), 2,700-square-metre (30,000-square-foot) addition began last summer and should be complete in March.
Pickering Nuclear Generation Station. Picture credit: Bob – stock.adobe.com
Ontario expands largest competitive energy procurement in province’s history
The Ontario government is expanding the largest competitive energy procurement in the province’s history by 50 per cent to meet soaring energy demand. The government has increased the target for the procurement from 5,000 megawatts (MW) to up to 7,500 MW to ensure Ontario has the reliable and affordable electricity it needs to power the building of new homes, businesses and communities.
Since the procurement was first announced, Ontario’s Independent Electricity System Operator (IESO) has released an updated electricity demand forecast which now shows the province will need 75 per cent more electricity by 2050, the equivalent of adding four and a half cities the size of Toronto to the grid. To meet this growing demand, the government directed IESO to begin the government’s Second Long-Term Procurement (LT2) and implement the increased procurement target.
Picture credit: amazing studio – stock.adobe.com
Canada’s international investment position, third quarter 2024
Canada’s net foreign asset position edged up by $11.6 billion to reach $1,865.3 billion at the end of the third quarter, following three consecutive quarters of substantial increases. Year over year, Canada’s net foreign asset position grew by $628.2 billion, largely on the strength of the US stock market, which Canadian investors are heavily exposed to. Over the third quarter, Canada’s international assets and liabilities grew significantly, driven by the rise in both equity and debt instruments prices.
Did you know?
Pantone’s Colour of the Year for 2025 is Mocha Mousse, capturing the global mood of connection, comfort, and harmony. It sounds delicious.
Focus on Climate
A tale of extremes: Canada’s 10 most impactful weather stories of 2024
Canada’s 10 most impactful weather stories for 2024 tells the tale of record-breaking heatwaves, destructive winds, and relentless rainfalls that prompt weather watches, warnings, and alerts. The stories illustrate how severe weather events evolve and how local responses can be safely navigated with informed decisions.
The most impactful weather stories of 2024 are:
- From heatwave to wildfires: Jasper’s summer inferno
- Central Canada bears the brunt of the 2024 hurricane season
- Western Canada plunged into January deep freeze
- Atmospheric rivers deliver double blow to British Columbia
- Billion-dollar hailstones: Calgary’s costliest weather disaster
- Southern Ontario’s summer of floods
- Arctic communities face unusual heatwave
- Cape Breton’s winter wallop
- Summer split: Maritimes sizzle while Alberta shivers
- Wildfires and evacuations in western Labrador
Through the Daily Updates, the GNCC aims to deliver important business news in a timely manner. We disseminate all news and information we feel will be important to businesses. Inclusion in the Daily Update is not an endorsement by the GNCC.
