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Bank of Canada raises benchmark interest rate to 1.5%, signals more hikes on the way – CBC News

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The Bank of Canada raised its benchmark interest rate to 1.5 per cent on Wednesday and signalled that more hikes are on the way.

The decision by the central bank to raise its rate by half a percentage point was widely expected as it moves to aggressively rein in high inflation.

Inflation hit 6.8 per cent in April, more than twice the level that the central bank likes to see.

In a vacuum, central banks slash interest rates to encourage borrowing and investing to stimulate a sluggish economy, and they raise rates when they want to cool down an overheated economy.

Just as many other countries did, Canada reduced lending rates in the early days of the COVID-19 pandemic. But those record-low borrowing rates have contributed to rising inflation, which is what’s prompting the central bank to change direction.

While the cost of living is already at its highest rate in 30 years, the central bank says it doesn’t think things have peaked just yet, saying in a statement on Wednesday that inflation “will likely move even higher in the near term before beginning to ease.”

The hike brings the bank’s rate within a quarter of a point of the 1.75 per cent level it was at before the pandemic, and the bank made it clear in its statement that several more rate increases are planned.

“With … inflation persisting well above target and expected to move higher in the near term, the [bank] continues to judge that interest rates will need to rise further,” the central bank said in a statement.

The bank’s decision will increase borrowing rates for variable rate loans such as mortgages and other lines of credit.

John Marsh, the owner of Elecompack Systems Inc., an office supply store in Oakville, Ont., has variable rate loans attached to his business and says higher interest rates are starting to bite. (Craig Chivers/CBC)

That’s going to impact people like John Marsh, the owner and operator of Elecompack Systems Inc., an office supply store and label maker based in Oakville, Ont.

When the pandemic hit, Marsh said, he saw his sales plunge by about 40 per cent, so like many business owners, he borrowed some money to stay afloat to ride out the storm. While he’s pleased his business is now turning a profit again, this week’s rate hike will stretch his budget even further.

“I have several loans with a variable rate, and every time the rate changes, it has an impact on us,” he told CBC News in an interview.

Marsh estimates that Wednesday’s 50-point hike will probably raise his debt payments by a few hundred dollars a month. “It’s going to be at least six years before we recover fully,” he said. “Anything right now that makes it harder to recover is not a good thing.”

Impact on housing market

While consumers and businesses with variable rate debt will feel the higher rates, the biggest impact will likely be on Canada’s housing market.

Cheap lending rates fuelled a breathtaking rise in Canada’s housing market during the pandemic, but the wind appears to be coming out of its sails of late as the central bank signals the era of cheap money is coming to an end.

The national average house price has fallen for two months in a row and is expected to fall further. While that’s obviously concerning for sellers and potentially good news for buyers, Toronto mortgage broker Samantha Brookes said absolutely everyone will be impacted by this week’s rate hike, no matter what part of the market they are in.

While lower prices may help buyers, many are finding that their mortgage will cost more than they expected, she told CBC News in an interview.

“These low rates are now gone, they’re totally off the table,” Brookes, the CEO of Mortgages of Canada, said, “and people just have to be more aware of how much this is going to increase their cost per month.”

Similarly, owners who had banked on a king’s ransom when selling their home are having to adjust their expectations downward, but even those with no plans to sell are feeling the pinch.

Toronto mortgage broker Samantha Brookes, the CEO of Mortgages of Canada, says both buyers and sellers will be impacted by this week’s interest rate hike. (Craig Chivers/CBC)

Brookes gives the example of owners who bought years ago when mortgage rates of one or two per cent were easy to find. Today, those owners’ mortgages are up for renewal, “and the interest rates are in the four per cent range, [so] they can no longer afford the mortgage,” she said.

Those owners are finding themselves having to stretch their mortgages over a longer time period to bring the monthly payment down to something they can afford. While the process of adjusting to higher rates will be painful, Brookes said it will be good for everyone in the long run.

“It’s time for us to start bringing those rates back to where they used to be,” she said.

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‘McGregor-Mayweather rematch in the making’

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Los Angeles, United States of America (USA)- Fighthype.com has reported that Conor McGregor and Floyd Mayweather are in discussions over holding a second bout.

Mayweather beat McGregor in their huge clash back in June 2017 but McGregor has hinted at a possible rematch in a post on his Instagram account.

The UFC superstar posted a cryptic post hinting at a second bout by sharing a picture of their 2017 clash and writing, “I accept.”

However, it’s uncertain as to whether a rematch between the pair would be another exhibition bout, or whether Mayweather would make it one more professional fight.

Meanwhile, YouTuber, Jake Paul, has repeatedly claimed that Mayweather still hasn’t paid him following last year’s exhibition bout. Their eight-round exhibition bout went to a draw as Mayweather was unable to knockout Paul, “Floyd Mayweather is broke. I have been saying it all the time. I think he probably spent it on the girls he pays to be around him. He’s hard to hit, but even harder to collect money from. Who should I fight next?”

However, Mayweather has since dismissed the accusations claiming that Paul has suggested that the pair should have a second exhibition bout.

“This is the guy who said he didn’t get paid, which we know is truly false, which is why I don’t entertain the bull*** a lot of the time. We know he got paid and if he didn’t get paid he wouldn’t be trying to get another payday. It is so crazy that Logan Paul wants to do an exhibition again but it is the same guy that said he didn’t get paid. It is what it is,” said Mayweather.

Mayweather was expected to earn US$64 million from the fight, with Logan receiving US$18.5 million of the purse.

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G7: Canada to elevate small Commonwealth nations' concerns – CTV News

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KIGALI, Rwanda –

Prime Minister Justin Trudeau headed to the G7 summit in Germany on Saturday without a consensus from the Commonwealth to condemn the Russian invasion of Ukraine, but with a chorus of countries calling for help to overcome the fallout of the war.

Trudeau and Foreign Affairs Minister Melanie Joly arrived in Kigali, the capital of Rwanda, on Wednesday for the Commonwealth Heads of Government meeting, which has been dominated by the concerns of nations that are suffering from food scarcity. Trudeau departed for the G7 talk slater in the day.

In the final communique from the Commonwealth summit, the 54 participating countries said they discussed the conflict in Ukraine, ” underscored the need to respect the territorial integrity and sovereignty of all states,” and ” emphasized that all countries must seek peaceful resolution to all disputes in accordance with international law.”

The countries stopped short of condemning Russia, as Trudeau and United Kingdom Prime Minister Boris Johnson have done throughout the summit.

“I can assure you that the topic of standing up for Ukraine was much discussed,” Trudeau said at a press conference following the conclusion of the summit, referencing “strong language” in the communique.

Most Commonwealth Nations condemned Russia’s actions at a United Nations vote in March, but 10 abstained. Among them was India, whose Prime Minister Narendra Modi opted not to attend the Commonwealth summit and instead spoke virtually with the leaders of Russia, China, Brazil and South Africa.

Trudeau said Russian President Vladimir Putin has run a disinformation campaign and has even been “telling outright lies,” including blaming the food security crisis on Western sanctions against Russia.

He said food shortage stems from Russia’s illegal actions, including blockade at key ports, as well as the deliberate targeting of Ukrainian grain storage facilities through cruise missile strikes.

“I was very clear with our friends and partners around the table, and not just clear on Russia’s responsibility, but on how Canada and the West are stepping up,” Trudeau said.

Canada will be raising the growing threat of famine at the G7 in Schloss Elmau Germany, Joly said.

She said Canada was in “listening mode” at the Commonwealth meetings, where leaders of smaller nations were able to speak without the dominating presence of the United States, Russia and China.

“What is clear to us is that Russia is weaponizing food and putting a toll on many countries around the world, and putting 50 million lives at risk,” Joly told reporters Friday in Rwanda.

Trudeau had attempted to meet with the chair of the African Union Commission, Moussa Faki Mahamat, for several days during the Commonwealth summit but the sit-down was repeatedly postponed and eventually cancelled.

Shortly after Trudeau arrived in Rwanda, the government announced Canada would dedicate a new ambassador to the African Union, which has suffered from the food shortages inflicted on the continent as a result of the warin Ukraine.

Both Ukraine President Volodymyr Zelenskyy and Putin have met with representatives of the African Union, with Russia blaming sanctions against its government for stopping the flow of grain.

At the conclusion of the Commonwealth summit, Trudeau announced $94 million in funding for various education initiatives and $120 million to support gender equality and women’s rights in Commonwealth countries.

Some of the other voices the prime minister has promised to centre at his international meetings, including the G7 summit,

belong to youth leaders who spoke at a Saturday-morning event focused on issues facing young people around the world.

Some of the delegates spoke about the devastating effects of climate change, particularly around remote island nations where infrastructure cannot withstand natural disasters and rebuilding efforts take years. The onslaught takes a toll on education and health services, one delegate told the forum.

This report by The Canadian Press was first published June 25, 2022.

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New federal task force to review Canada’s immigration, passport delays – Global News

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The federal government has created a special task force to help tackle the major delays with immigration applications and passport processing that have left Canadians frustrated.

In a statement announcing the new task force, Prime Minister Justin Trudeau said the federal government knows the delays are unacceptable, and will continue to do everything it can to improve the delivery of the services in an efficient and timely manner.

Read more:

Passport renewal wait times now online as Ottawa looks to address long lineups

Trudeau said the new task force will help guide the government to better meet the changing needs of Canadians, and continue to provide them with the high-quality services they need and deserve.

Ten cabinet members will spearhead the new committee, which will review how services are delivered, and identify gaps and areas for improvement.


Click to play video: 'New passport wait-time estimator shows system backlog'



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New passport wait-time estimator shows system backlog


New passport wait-time estimator shows system backlog – Jun 15, 2022

The committee will be expected to make recommendations outlining short- and longer-term solutions that would reduce wait times, clear out backlogs, and improve the overall quality of services provided.

Read more:

Canadian passport delays are frustrating travellers. What’s the fix?

In addition, the task force will monitor external issues, such as labour shortages around the world, which contribute to travel delays at home and abroad.

© 2022 The Canadian Press

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