In this edition:
- Bank of Canada holds interest rate steady at 5 per cent
- New Ontario housing minister pledges open Greenbelt review
- Statistics Canada says country posted $987 million merchandise trade deficit in July
- Homeowners in these parts of Canada have built hundreds of thousands in equity in five years
- Canada expects to finalize free trade agreement with Association of Southeast Asian Nations (ASEAN)
- Zellers pop-ups to land in all remaining Hudson’s Bay locations
- Reading Recommendations: Climate
Bank of Canada holds interest rate steady at 5 per cent
Today, the Bank of Canada held its target for the overnight rate at 5 per cent, with the Bank Rate at 5.25 per cent and the deposit rate at 5 per cent. The Bank is also continuing its policy of quantitative tightening.
Inflation in advanced economies has continued to come down, but with measures of core inflation still elevated, major central banks remain focused on restoring price stability. Global growth slowed in the second quarter of 2023, largely reflecting a significant deceleration in China. With ongoing weakness in the property sector undermining confidence, growth prospects in China have diminished. In the United States, growth was stronger than expected, led by robust consumer spending. In Europe, strength in the service sector supported growth, offsetting an ongoing contraction in manufacturing. Global bond yields have risen, reflecting higher real interest rates, and international oil prices are higher than was assumed in the July Monetary Policy Report (MPR).
The Canadian economy has entered a period of weaker growth, which is needed to relieve price pressures. Economic growth slowed sharply in the second quarter of 2023, with output contracting by 0.2 per cent at an annualized rate. This reflected a marked weakening in consumption growth and a decline in housing activity, as well as the impact of wildfires in many regions of the country. Household credit growth slowed as the impact of higher rates restrained spending among a wider range of borrowers. Final domestic demand grew by 1 per cent in the second quarter, supported by government spending and a boost to business investment. The tightness in the labour market has continued to ease gradually. However, wage growth has remained around 4 per cent to 5 per cent.
New Ontario housing minister pledges open Greenbelt review
Ontario’s new housing minister, the Honourable Paul Calandra, is promising an open and public review of the province’s Greenbelt and says he is looking at new measures to hold developers accountable for building homes.
Mr. Calandra said he has asked bureaucrats to draw up options for the parameters for the Greenbelt review. But he said that it will include the 14 parcels of land the government has already removed. However, talks with developers on plans, and infrastructure costs, on those sites will continue, he said.
Statistics Canada says country posted $987 million merchandise trade deficit in July
Statistics Canada reported a July merchandise trade deficit of $987 million, primarily due to lower imports driven by reduced gold shipments and the B.C. port strike. This contrasts with June’s revised deficit of $4.9 billion.
Imports declined by 5.4 per cent in July, with metal and non-metallic mineral products plummeting by 25.3 per cent. Subcategory imports, including unwrought gold, silver, and platinum group metals, dropped by 60.5 per cent, largely due to reduced gold asset transfers between financial institutions. Imports of goods dependent on B.C. ports, typically from Pacific Rim countries, also decreased. Consumer goods fell by 4.9 per cent, electronic equipment by 6.4 per cent, and industrial machinery and equipment by 6.1 per cent.
In contrast, total exports increased by 0.7 per cent, with lower exports of some goods due to the port strike offset by gains in less affected products.
Homeowners in these parts of Canada have built hundreds of thousands in equity in five years
Though the real estate market is known to fluctuate, over time home prices generally trend upwards – which is good news for homeowners. In most cases, the longer it’s been since purchasing your home, the more its value tends to increase.
To find out exactly how much equity a benchmark-priced home has built in the past 5 years, Zoocasa analyzed data from 15 major Canadian markets and calculated the estimated equity built on a home bought at the composite benchmark price, a detached home, a townhouse, and a condo in each city in July 2018.
For example, the value of a house in the Hamilton-Burlington region has risen $314,400 since July 2018, with the benchmark price hitting $873,600 in 2023 compared to $559,200 in 2018.
Canada expects to finalize free trade agreement with Association of Southeast Asian Nations (ASEAN)
Today, Prime Minister Justin Trudeau said that Canada expects to finalise a free trade agreement with ASEAN following the launch of the Canada-ASEAN strategic partnership.
During a ASEAN-Canada summit in Jakarta, Trudeau also emphasised the importance of transparency and understanding international rules to achieve growth.
Zellers pop-ups to land in all remaining Hudson’s Bay locations
Hudson’s Bay says it is expanding its Zellers brand to even more of its department stores.
The Toronto-based retailer says Zellers pop-ups will open within all Hudson’s Bay stores that have not yet featured the discount chain.
The expansion will cover 13 Ontario locations, seven in B.C., six in Alberta, four in Quebec and one in Manitoba.
They will be open in time for the holiday season and bring the number of Hudson’s Bay stores with a Zellers presence to 78.
Did you know?
Bubble Wrap was originally created in 1957 with the intention of serving as textured plastic wallpaper.
Focus on Climate
From Montana to Ontario, youth take to the courts as a last resort to combat climate change
Kate Helmore; The Globe and Mail
In 2020, seven young climate activists sued Ontario for violating their rights to life, liberty, security and equality. Mathur v. Ontario took particular issue with the province’s repeal of the Climate Change Mitigation and Low-carbon Economy Act, legislation that sought to reduce greenhouse gas emissions.
Alex Neufeldt, a part-time seamstress and fashion designer in Ottawa, was 23 when she and her six fellow litigants launched their case.
In April, a judge ruled against Ms. Neufeldt and the other plaintiffs. However, Mathur v. Ontario marked the first time a Canadian court had accepted a climate-litigation case like it, a turning point in the movement to use the courts to fight climate change.
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.