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Inflation is expected to drop significantly in Canada this year. What to know – Global News

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After a steep and rapid climb in prices, Canada’s inflation rate is expected to fall significantly this year, giving comfort to economists worried about untamed price growth but little relief to Canadians who have fallen behind.

Inflation, which first began creeping higher in 2021, took off dramatically last year and peaked at 8.1 per cent in the summer.

That’s well above the two per cent inflation target the Bank of Canada is supposed to maintain.

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The run-up in prices was sparked by what Desjardins’ chief economist Jimmy Jean called a “perfect storm” _ the reopening of economies after COVID-19 restrictions, the Russian invasion of Ukraine and the disruptions in supply chains.

As that storm continues to dissipate, price pressures have relented, giving glimmers of hope that normalcy in price growth may be restored.

Those glimmers are now more apparent in the data. Statistics Canada reported earlier this week that the headline inflation rate fell last month to 5.9 per cent from 6.3 per cent in December, a decline that can be explained by a “base-year effect.”

A base-year effect refers to the impact of price movements from a year ago on the calculation of the year-over-year inflation rate.


Click to play video: 'Food prices continue to rise in Canada'

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Food prices continue to rise in Canada


Simply put, it means prices today aren’t rising as fast because they’re being compared to already elevated prices a year ago.

Given much of the acceleration in price growth happened in the first half of 2022, the federal agency said the annual inflation rate will continue to slow in the coming months.

Economists tracking month-over-month changes in prices have noticed price pressures easing for a while now.

But as base year effects fade, that deceleration will be more obvious to Canadians who may only be familiar with the annual inflation rate.

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Looking ahead, the Bank of Canada is forecasting inflation will fall to about three per cent by mid-year and back down to two per cent in 2024. Most private sector economists are forecasting similar figures as well.

The forecasts come with a major caveat, however: Canada must be spared from unexpected global events that could cause another rise in inflation.

As Canada’s inflation rate continues to fall, Jean warns people shouldn’t confuse disinflation _ which refers to prices rising at a slower pace _ to outright deflation.

“It doesn’t mean … we’re going to necessarily see price reductions,” Jean said.

“But the pace of increase, when we compare the price index this year to last year, that will certainly get back to something closer to normal.”


Click to play video: 'Is Canada headed toward recession? Experts have ‘no consensus’ on future of inflation'

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Is Canada headed toward recession? Experts have ‘no consensus’ on future of inflation


For Canadians who have been struggling with the cost of living, slower price growth doesn’t mean relief from high prices.

“A good part of the purchasing power erosion we saw over the last year or so, that’s likely to be permanent, unfortunately,” Jean said. “Unless and until we see incomes pick up.”

Throughout the run-up in prices, wage growth has continually lagged inflation. In January, average hourly wages were up 4.5 per cent compared with a year ago.

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And for families who spend a hefty portion of their budgets on groceries, the decline in the headline inflation rate is even less meaningful. In January, grocery prices were up 11.4 per cent on an annual basis, showing no signs of a slowdown.

With affordability still top of mind for many Canadians, Jean said “governments are going to be under pressure to perhaps offer more support, especially for the households that are very in need.”

But as the Canadian economy stares down a potential recession, Jean said most governments will be contending with deficits, forcing them to strike a delicate balance with spending.

As Canadians try to make up for the ground they’ve lost because of inflation, some may take advantage of the robust labour market and pick up more work, Jean said.

“There’s going to be multiple ways people are going to be responding going forward to try to still put bread on their table.”

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Canada’s Denis Shapovalov wins Belgrade Open for his second ATP Tour title

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BELGRADE, Serbia – Canada’s Denis Shapovalov is back in the winner’s circle.

The 25-year-old Shapovalov beat Serbia’s Hamad Medjedovic 6-4, 6-4 in the Belgrade Open final on Saturday.

It’s Shapovalov’s second ATP Tour title after winning the Stockholm Open in 2019. He is the first Canadian to win an ATP Tour-level title this season.

His last appearance in a tournament final was in Vienna in 2022.

Shapovalov missed the second half of last season due to injury and spent most of this year regaining his best level of play.

He came through qualifying in Belgrade and dropped just one set on his way to winning the trophy.

Shapovalov’s best results this season were at ATP 500 events in Washington and Basel, where he reached the quarterfinals.

Medjedovic was playing in his first-ever ATP Tour final.

The 21-year-old, who won the Next Gen ATP Finals presented by PIF title last year, ends 2024 holding a 9-8 tour-level record on the season.

This report by The Canadian Press was first published Nov. 9, 2024.

The Canadian Press. All rights reserved.



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Talks to resume in B.C. port dispute in bid to end multi-day lockout

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VANCOUVER – Contract negotiations resume today in Vancouver in a labour dispute that has paralyzed container cargo shipping at British Columbia’s ports since Monday.

The BC Maritime Employers Association and International Longshore and Warehouse Union Local 514 are scheduled to meet for the next three days in mediated talks to try to break a deadlock in negotiations.

The union, which represents more than 700 longshore supervisors at ports, including Vancouver, Prince Rupert and Nanaimo, has been without a contract since March last year.

The latest talks come after employers locked out workers in response to what it said was “strike activity” by union members.

The start of the lockout was then followed by several days of no engagement between the two parties, prompting federal Labour Minister Steven MacKinnon to speak with leaders on both sides, asking them to restart talks.

MacKinnon had said that the talks were “progressing at an insufficient pace, indicating a concerning absence of urgency from the parties involved” — a sentiment echoed by several business groups across Canada.

In a joint letter, more than 100 organizations, including the Canadian Chamber of Commerce, Business Council of Canada and associations representing industries from automotive and fertilizer to retail and mining, urged the government to do whatever it takes to end the work stoppage.

“While we acknowledge efforts to continue with mediation, parties have not been able to come to a negotiated agreement,” the letter says. “So, the federal government must take decisive action, using every tool at its disposal to resolve this dispute and limit the damage caused by this disruption.

“We simply cannot afford to once again put Canadian businesses at risk, which in turn puts Canadian livelihoods at risk.”

In the meantime, the union says it has filed a complaint to the Canada Industrial Relations Board against the employers, alleging the association threatened to pull existing conditions out of the last contract in direct contact with its members.

“The BCMEA is trying to undermine the union by attempting to turn members against its democratically elected leadership and bargaining committee — despite the fact that the BCMEA knows full well we received a 96 per cent mandate to take job action if needed,” union president Frank Morena said in a statement.

The employers have responded by calling the complaint “another meritless claim,” adding the final offer to the union that includes a 19.2 per cent wage increase over a four-year term remains on the table.

“The final offer has been on the table for over a week and represents a fair and balanced proposal for employees, and if accepted would end this dispute,” the employers’ statement says. “The offer does not require any concessions from the union.”

The union says the offer does not address the key issue of staffing requirement at the terminals as the port introduces more automation to cargo loading and unloading, which could potentially require fewer workers to operate than older systems.

The Port of Vancouver is the largest in Canada and has seen a number of labour disruptions, including two instances involving the rail and grain storage sectors earlier this year.

A 13-day strike by another group of workers at the port last year resulted in the disruption of a significant amount of shipping and trade.

This report by The Canadian Press was first published Nov. 9, 2024.

The Canadian Press. All rights reserved.



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The Royal Canadian Legion turns to Amazon for annual poppy campaign boost

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The Royal Canadian Legion says a new partnership with e-commerce giant Amazon is helping boost its veterans’ fund, and will hopefully expand its donor base in the digital world.

Since the Oct. 25 launch of its Amazon.ca storefront, the legion says it has received nearly 10,000 orders for poppies.

Online shoppers can order lapel poppies on Amazon in exchange for donations or buy items such as “We Remember” lawn signs, Remembrance Day pins and other accessories, with all proceeds going to the legion’s Poppy Trust Fund for Canadian veterans and their families.

Nujma Bond, the legion’s national spokesperson, said the organization sees this move as keeping up with modern purchasing habits.

“As the world around us evolves we have been looking at different ways to distribute poppies and to make it easier for people to access them,” she said in an interview.

“This is definitely a way to reach a wider number of Canadians of all ages. And certainly younger Canadians are much more active on the web, on social media in general, so we’re also engaging in that way.”

Al Plume, a member of a legion branch in Trenton, Ont., said the online store can also help with outreach to veterans who are far from home.

“For veterans that are overseas and are away, (or) can’t get to a store they can order them online, it’s Amazon.” Plume said.

Plume spent 35 years in the military with the Royal Engineers, and retired eight years ago. He said making sure veterans are looked after is his passion.

“I’ve seen the struggles that our veterans have had with Veterans Affairs … and that’s why I got involved, with making sure that the people get to them and help the veterans with their paperwork.”

But the message about the Amazon storefront didn’t appear to reach all of the legion’s locations, with volunteers at Branch 179 on Vancouver’s Commercial Drive saying they hadn’t heard about the online push.

Holly Paddon, the branch’s poppy campaign co-ordinator and bartender, said the Amazon partnership never came up in meetings with other legion volunteers and officials.

“I work at the legion, I work with the Vancouver poppy office and I go to the meetings for the Vancouver poppy campaign — which includes all the legions in Vancouver — and not once has this been mentioned,” she said.

Paddon said the initiative is a great idea, but she would like to have known more about it.

The legion also sells a larger collection of items at poppystore.ca.

This report by The Canadian Press was first published Nov. 9, 2024.

The Canadian Press. All rights reserved.



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