In this edition:
Scrap the App!
Inflation affecting three-quarters of Canadians’ ability to meet day-to-day expenses
Bank of Canada warns of more complex financial vulnerabilities, elevated risks
Inflation will dictate pace, size of rate hikes
Typical mortgage payment could be 30% higher in 5 years
Scrap the App!
The GNCC is calling on the Government of Canada to scrap the ArriveCAN app, and we need your help to do it.
Travellers are already required to verify vaccination status and can be subjected to random testing. We believe the ArriveCAN app does little more than deter tourists from coming to Canada. With 40,000 to 60,000 local jobs depending on tourism, Niagara cannot afford additional burdens to international travel.
Will you take a moment to send a message to your Member of Parliament? We’ve made it easy – all you need to do is click here to pick your riding and send a pre-written message, or write your own.
Inflation affecting three-quarters of Canadians’ ability to meet day-to-day expenses
To understand how rising prices are contributing to financial concerns or influencing the financial decisions of Canadians, Statistics Canada conducted the Portrait of Canadian Society survey from April 19 to May 1, 2022.
It found that nearly three in four Canadians reported that rising prices are affecting their ability to meet day-to-day expenses such as transportation, housing, food, and clothing. As a result, many Canadians are adjusting their behaviour to adapt to this new reality, including adjusting their spending habits and delaying the purchase of a home or moving to a new rental.
During the past year (April 2021 to April 2022), the price of food rose by 9.7%. Canadians had to pay much more for basic food staples, such as fresh fruit (+10.0%), meat (+10.1%) and fresh vegetables (+8.2%). With rising costs in other areas such as shelter and transportation, Canadians have also been less able to budget money for food.
When asked in which area they were most affected by rising prices during the six months preceding the survey, 43% of Canadians answered food. After food, the most affected areas were transportation (32%), shelter (9%) and household operations (8%).
Bank of Canada warns financial system vulnerabilities more complex, risks elevated
The Canadian financial system has proved resilient throughout the COVID‑19 pandemic, and the balance sheets of businesses and households are generally in good shape. However, in an environment of tightening financial conditions, high global inflation and increased geopolitical tensions, financial system vulnerabilities have become more complex, and risks have become more elevated.
The Bank is paying particular attention to the fact that a greater number of Canadian households are carrying high levels of mortgage debt. These households are more vulnerable to declines in income and rising interest rates. While the sharp increase in house prices over the past year has resulted in significant equity gains for many households, those who entered the housing market in the last year or so would be more exposed in the event of a significant price correction.
The vulnerabilities highlighted in this report suggest the effects for the real economy could be significant if a trigger event occurs, even as systemically important financial institutions remain resilient.
Click here to read the report.
Inflation will dictate pace, size of rate hikes
Bank of Canada Governor Tiff Macklem on Thursday said inflation would dictate how fast interest rates go up, reiterating that the bank might need to make more increases in a row or consider a move larger than 50 basis points.
Macklem, answering questions after the release of an annual financial system review, made clear getting inflation back to the 2% target was the central bank’s No. 1 priority, though it hoped to avoid cooling the economy too much.
The bank raised its benchmark rate to 1.5% from 1.0% last week and said it was prepared to act “more forcefully” if needed to curb inflation, currently running at a 31-year high.
Typical mortgage payment could be 30% higher in 5 years
High house prices and debt loads associated with them are a major vulnerability to Canada’s economy, the Bank of Canada said Thursday, warning buyers who bought during the pandemic that the impact of even slightly higher mortgage rates could be dramatic.
In its Financial System Review, the central bank said that while the country’s financial system is strong and weathered the pandemic well, the economy remains vulnerable because of elevated debt levels tied to the country’s increasingly expensive housing market.
“Even as the average household is in better financial shape, more Canadians have stretched to buy a house during the pandemic,” Bank of Canada Governor Tiff Macklem said Thursday. “And these households are more exposed to higher interest rates and the potential for housing prices to decline.”
The bank said that assessing risks related to high household debt levels has become more complex, but overall “the vulnerability has increased.”
Reading Recommendations
How delays at Pearson Airport got so bad: Aviation experts weigh in
CTV News
It’s been a nightmare for travellers flying through Canada’s busiest airport, with long lines, flight delays and cancellations becoming the norm, and aviation experts predict that these problems are only going to get worse before they improve.
Duncan Dee, former chief operating officer for Air Canada, says much of these delays stem from staffing levels at customs and immigration desks at Toronto Pearson International Airport inadequately equipped to deal with the surge in passenger traffic as well as the COVID-19 border measures, creating a domino effect of delays.
“Each and every one of the travellers is screened. And it’s now taking four times longer than it did before the pandemic,” he told CTV News on Wednesday.
Why Are There Still So Few Women Leaders in Politics?
The Walrus
Interim leaders hold a strange position in party politics. They’ve advanced to one of the highest offices in the country, but at a cost: these leaders are generally not allowed to run in the following leadership race due to the unfair advantage they would have. Few end up making it to the real top spot in the party at a later date. And, as history has shown, interim leader is as high as most women politicians make it. The brass ring remains frustratingly out of reach.
After Erin O’Toole was ousted as leader of the Conservative Party of Canada, on February 2, Candice Bergen was quickly elected interim leader, picking up the reins of a party that seems to be having trouble deciding what it is, what it represents, and how it will take back power from the Liberals. The long-time Manitoba MP for Portage–Lisgar and former deputy leader joined an exclusive list: highly qualified women considered good enough by their parties to put things back together after a crisis but whose names often disappear when a permanent leader is discussed.
In a Twitter thread from the day Bergen was elected, Kathleen Monk, president and owner of Monk + Associates and former director of communications for Jack Layton, pointed out the large number of women who have been elected interim leaders across federal parties, from the NDP’s Nycole Turmel to the Conservatives’ Rona Ambrose, comparing it to the paltry number who’ve been elected as permanent leaders.
“We all have these theories,” Monk says. “It’s like, oh, what—Mom’s going to heal all the wounds and bring everybody together? And then that also means that she can’t actually get the big job and she’ll be relegated to history.”
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.
