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‘A big shock’: Canadians feeling squeezed by Bank of Canada’s interest rate hikes – Global News

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The Bank of Canada’s continued interest rate hikes this year — including Wednesday’s surprise one per cent bump — have hit Canadians like Aashti Vijh hard.

In January, the 30-year-old marketing and communications manager was paying about $1,600 per month for the variable rate mortgage she has on her downtown Toronto condo. Now, that monthly payment will be nearly $2,000.

“It’s been a big shock and a big change for me personally,” she told Global News Wednesday, shortly after the central bank’s announcement, which added about $200 to her payments alone.

“I’m also managing the mortgage by myself, so all of these payments come out from my paycheque.”

Read more:

Bank of Canada hikes key interest rate by full percentage point in surprise move

The key interest rate now sits at 2.5 per cent, a drastic shift from the 0.25 per cent rate seen at the start of the year, as the Bank of Canada tries to tame decades-high inflation that has sent prices skyrocketing.

The bank’s governor Tiff Macklem acknowledged Wednesday that higher interest rates will add to the difficulties that Canadians are already facing with high inflation, but said if inflation becomes entrenched it will be more painful for the economy — and for Canadians — to get it back down.


Click to play video: 'Bank of Canada hikes key interest rate by full percentage point in surprise move'



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Bank of Canada hikes key interest rate by full percentage point in surprise move


Bank of Canada hikes key interest rate by full percentage point in surprise move

That comes as little comfort for Vijh. After being forced to adjust her budget to accommodate previous interest rate hikes earlier this year, she says she’ll once again have to find a new balance.

“Primarily it’s going to be cutting down on my day-to-day costs – dining out, groceries – finding places where I can basically cut costs. I’ll put more money towards my mortgage if I can, as well as through my savings,” she said.

“I’m also reconsidering my travel plans for the rest of the year, because travel is also extremely expensive right now, and I’m not entirely sure I can accommodate that given the mortgage rate increases.”

Wednesday’s one per cent hike — the largest single increase since August of 1998 — surprised most economists who were anticipating a 75 basis point increase in line with the U.S. Federal Reserve.

Read more:

Inflation calculator: How do rising prices affect your personal finances?


Click to play video: 'Bank of Canada governor on why key interest rate announcement came relatively suddenly'



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Bank of Canada governor on why key interest rate announcement came relatively suddenly


Bank of Canada governor on why key interest rate announcement came relatively suddenly
The hike means a typical variable rate mortgage of 2.7 per cent on a home priced at the national average of $711,000 would see monthly payments increase from $2,845 to $3,168 — a difference of nearly $325 per month.

Although Vijh’s mortgage rate is slightly lower at 2.55 per cent, she’s says she’s still feeling the squeeze. She also has 23 years left on her 25-year amortization, leaving her with roughly $384,000 left to pay off.

The rising interest rates this year have already started to cool off Canada’s white-hot housing market, with home prices seeing their first declines in nearly three years. Royal LePage has slashed its annual market outlook to just five per cent growth by the end of 2022, down from a projected 15 per cent earlier this year.

But that still leaves new homeowners like Vijh making increasingly higher mortgage payments on properties that are now starting to dip in value along with the market.

Macklem said Wednesday’s oversized rate hiked reflected “very unusual economic circumstances” of “too high” inflation and increased consumer anxiety, which requires drastic action to reverse.


Click to play video: 'Bank of Canada projects ‘soft landing’ approach to addressing inflation'



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Bank of Canada projects ‘soft landing’ approach to addressing inflation


Bank of Canada projects ‘soft landing’ approach to addressing inflation

The Bank of Canada also signalled that interest rates would need to keep rising before the end of the current cycle.

In a note, CIBC senior economist Karyne Charbonneau said the Bank of Canada raising its key rate to a peak of 3.25 per cent is now more likely.

The continued hikes is concerning to Vijh, who says she’s growing increasingly worried about her ability to save for her retirement.

“In January, I was probably able to put a little more toward my RRSP,” she said. “Today, I may have to reconsider how much I’m putting towards retirement and instead put that into my mortgage payments, or save it and put it toward a prepayment for my mortgage.”

Read more:

Recession fears won’t faze Bank of Canada, economists say. Why that may be a good thing

Vijh says she wants people of her generation who also bought into the real estate market during the pandemic to keep a close eye on their expenses, particularly as the potential for more interest rate hikes looms.

“I’m sure a lot of them took the opportunity, like I did, to get into their first home in 2020, 2021, and are now being faced with pretty steep increases in their mortgage costs,” she said.

“It’s going to be very important for us to re-examine how we spend and save, and get into these new changes.”

 – with files from Global News’ Craig Lord


Click to play video: 'Mortgage advice following Bank of Canada’s 1% interest rate increase'



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Mortgage advice following Bank of Canada’s 1% interest rate increase


Mortgage advice following Bank of Canada’s 1% interest rate increase

© 2022 Global News, a division of Corus Entertainment Inc.

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Canadian Hockey League boosts border rivalry by launching series vs. USA Hockey’s development team

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The Canadian Hockey League is looking to capitalize on the sport’s cross-border rivalry by having its top draft-eligible prospects face USA Hockey’s National Development team in an annual two-game series starting in November.

Unveiled on Tuesday by the CHL, the series is being billed as the CHL-USA Prospects Challenge with this year’s games played at two Ontario cities — London and Oshawa — on Nov. 26-27. The CHL reached a three-year deal to host the series, with sites rotating between the group’s three members — the Ontario, Quebec Maritime, and Western hockey leagues.

Aside from the world junior championships, the series will feature many of both nation’s top 17- and 18-year-olds in head-to-head competition, something CHL President Dan MacKenzie noted has been previously lacking for two countries who produce a majority of NHL talent.

“We think we’ve got the recipe for something really special here,” MacKenzie said. “And we think it’s really going to deliver for fans of junior hockey who want to see the best payers of their age group play against each other with something on the line.”

A majority of the CHL’s roster will be selected by the NHL’s Central Scouting Bureau.

The Michigan-based NTDP, established by USA Hockey in 1996, is a development program for America’s top juniors, with the team spending its season competing in the USHL, while rounding out its schedule playing in international tournaments and against U.S. colleges. NTDP alumni include NHL No. 1 draft picks such as Patrick Kane, Auston Matthews and Jack Hughes.

For the CHL, the series replaces its annual top-prospects game which was established in 1992 and ran through last season. The CHL also hosted a Canada-Russia Challenge, which began in 2003 and was last held in 2019, before being postponed as a result of the COVID pandemic and then canceled following Russia’s invasion of Ukraine.

“The success of USA Hockey’s program has really evolved and sort of gets them in a position where they’re going to be competitive in games like this,” MacKenzie said. “We’re still the No. 1 development league in the world by a wide margin. But we welcome the growth of the game and what that brings to the competition level.”

The challenge series is being launched at a time when North America’s junior hockey landscape could be shifting with the potential of NCAA Division 1 programs lifting their longstanding ban against CHL players.

On Friday, Western Hockey League player Braxton Whitehead announced on social media he has a verbal commitment to play at Arizona State next season. Whitehead’s announcement comes on the heels of a class-action lawsuit filed last month, challenging the NCAA’s eligibility ban of CHL players.

A lifting of the ban could lead to a number of CHL players making the jump to the U.S. college ranks after finishing high school.

MacKenzie called it difficult for him to comment due to the litigation and because the CHL is considered an observer in the case because it was not named in the lawsuit.

“My only comment would be that we continue to be a great option for 16- to 20-year-old players to develop their skills and move on to academic or athletic pursuits by being drafted in the NHL, where we’re the No. 1 source of talent,” MacKenzie said. “And we’re going to continue to focus on that.”

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AP NHL:

The Canadian Press. All rights reserved.



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Boston Marathon lowers qualifying times for most prospective runners for 2026 race

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BOSTON (AP) — Runners hoping to qualify for the 2026 Boston Marathon are going to have to pick up the pace.

The Boston Athletic Association has updated its qualifying times for the world’s oldest annual marathon, asking most prospective competitors to run a 26.2-mile race five minutes faster than in recent years to earn a starting number.

“Every time the BAA has adjusted qualifying standards — most recently in 2019 — we’ve seen athletes continue to raise the bar and elevate to new levels,” Jack Fleming, president and CEO of the BAA, said in a statement posted Monday. “In recent years we’ve turned away athletes in this age range (18-59) at the highest rate, and the adjustment reflects both the depth of participation and speed at which athletes are running.”

The BAA introduced qualifying times in 1970 and has expanded and adjusted the requirements through the decades. Runners participating in the event to raise money for charity do not have to meet the qualifying standards.

The latest change means men between the ages of 18 and 34 will have to run a marathon during the qualification window in 2 hours, 55 minutes or faster to earn a spot in the 2026 race — five minutes faster than for this year’s edition.

Women and nonbinary applicants need to complete the distance in 3:25.

The slowest competitors that can earn qualification are in the 80 and over age group. The men in that category must complete a marathon in 4:50, while women and nonbinary competitors have 5:20 to finish. Those numbers were not changed in the most recent adjustment.

The BAA said it had 36,406 qualifier entry applications for next year’s race, more than ever before.

“The record number of applicants indicates the growing trend of our sport and shows that athletes are continuously getting faster and faster,” Fleming said.

The qualifying window for the 2026 race began on Sept. 1 and will run through the conclusion of the registration period of that race next September.

Next year’s Boston Marathon will take place on April 21.

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AP sports:

The Canadian Press. All rights reserved.



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Former Canadiens, Senators defenceman Chris Wideman retires after six NHL seasons

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MONTREAL – Former Montreal Canadiens and Ottawa Senators defenceman Chris Wideman announced he’s retiring after six NHL seasons on Tuesday.

Wideman spent his last three seasons under contract with the Canadiens, but did not play during the 2023-24 campaign due to a back injury.

The 34-year-old said in a letter released by the Canadiens that he made several attempts at rehabilitation and sought a variety of treatments before deciding to hang up his skates. He finishes his career with 20 goals and 58 assists in 291 games.

Wideman, a five-foot-10, 180-pound blueliner, started his NHL career with the Senators in 2015-16. He played parts of four seasons in the nation’s capital before he was traded in 2018-19 to the Edmonton Oilers, playing five games in Alberta before moving on to the Florida Panthers, Pittsburgh Penguins and Anaheim Ducks organizations.

During the 2020-21 season, he played in Russia’s Kontinental Hockey League and was named the league’s defenceman of the year.

Wideman returned to the NHL the following season and produced a career-best 27 points (four goals, 23 assists) in 64 games with the Canadiens.

This report by The Canadian Press was first published Sept. 17, 2024.

The Canadian Press. All rights reserved.



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