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Here is a roundup of stories from The Canadian Press designed to bring you up to speed on what you need to know today…
Tourism operators face heavy debt, even as business roars back
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Bank of Canada raises benchmark interest rate to 1.5%, signals more hikes on the way – CBC News
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.
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.
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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Published Apr 23, 2024 • 3 minute read
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Canadian tourism operators says the tourism sector hasn’t returned to what it was pre-COVID.
Many businesses report carrying a heavy debt load, with Vancouver-based ecotourism company Maple Leaf Adventures saying it’s carrying it’s heaviest debt load in 38 years.
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Co-owner Maureen Gordon says while she and her competitors are recovering, higher interest rates are putting a damper on the post-COVID rebound.
Tourism Industry Association of Canada C-E-O Beth Potter says while the sector brought in 109-billion dollars in revenue last year, the federal government must help out by bringing in a new low interest loan program.
Tourism Minister Soraya Martinez Ferrada has said tourism operators have been affected by the warmest winter on record, but will be helped by the federal carbon rebate.
Here’s what else we’re watching …
Trudeau to make announcement in Saskatoon today
Prime Minister Justin Trudeau will be in Saskatoon today, where he will make an announcement highlighting measures focused on youth, education, and health that were contained in last week’s budget.
Joining Trudeau at the announcement in Saskatchewan’s largest city are minister for northern affairs Dan Vandal and Women and Gender Equality and Youth Minister Marci Ien.
Trudeau has faced conflict with the Saskatchewan Party government, whose leader, Premier Scott Moe, has been a vocal and long-standing opponent of the federal carbon levy.
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Moe is one of several premiers who have asked Trudeau to host a meeting to discuss alternatives to the consumer carbon price.
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‘Perfect storm’: Quebec farmer protests continue
Quebec farmers are continuing a series of protests that have brought slow rolling tractors to communities across the province’s agricultural regions.
The president of Quebec’s farmers union Martin Caron says producers are struggling with higher interest rates, growing paperwork and fees on plastic products, like containers of seeds, fertilizer and pesticides.
His organization is asking the current Coalition Avenir Quebec government to ensure farmers can get loans with interest rates of three per cent.
A spokesperson for Quebec’s agriculture minister says farmers can get emergency financial aid through a new program and that the government is consulting with the farmers union about reducing paperwork.
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Study shows caribou growth at wolves’ expense
New research suggests western Canada’s caribou population is growing.
But the same study also shows the biggest reason for the rebound is the slaughter of hundreds of wolves, a policy which will likely need to continue.
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Thirty-four researchers compared notes on herds in Alberta and British Columbia based on a study in Ecological Applications and found between 1991 and 2023, the caribou population dropped by half.
However, over the last few years the numbers have begun to slowly rise, as it’s estimated there are now more than 1500 caribou than there were had not restoration effort been made.
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Second World War hangar in Edmonton burns in fire
An aircraft hangar built during the Second World War at Edmonton’s former municipal airport has been destroyed by fire.
A spokesman for the City of Edmonton says in an email firefighters were called to Hangar 11 just before 7 p.m. Monday.
The city’s email says 11 fire crews were dispatched to the scene to deal with the heavy smoke and flames and the wooden building later collapsed.
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How a Newfoundland town shaped creepy ‘King Tide’
A new movie shot in Newfoundland showcases a community heavily reliant on a magical child.
“The King Tide” is about an isolated villagers having their lives forever changed after a mysterious infant washes up on their shores, the sole survivor of a devastating boat wreck.
They name the baby Isla, raise and learn she has healing powers promising immunity from injury and illness.
As the years pass, they become reliant on Isla’s abilities, but when her powers start to fade, a panic sets in as the community begins to fracture.
The movie was shot by Newfoundlander Christian Sparkes in Keels, Newfoundland, a former bustling fishing community which he says he’s been looking to film in for years, but couldn’t until recently due to the cost.
This report by The Canadian Press was first published April 23, 2024.
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We're still stockpiling reusable bags. Big grocers have adopted solutions, but experts have concerns – CBC News
Canada’s plastic bag ban has had an unintended consequence: a proliferation of reusable bags piling up in basements, closets and, eventually, landfills.
“They’re everywhere,” said environmental researcher Tony Walker. “We’re drowning in them, and we shouldn’t be.”
To combat the problem, several of Canada’s big grocers have introduced solutions. Last week, Walmart launched a free national recycling pilot program for the retailer’s reusable blue bags. Competitors Sobeys and chains owned by Loblaw Companies Ltd. use recyclable paper bags for grocery delivery.
But some environmental experts argue that paper bags are also problematic and that the best solutions are those that help customers actually reuse their reusable bags.
“We just can’t keep giving [them] out,” said Walker, a professor at Dalhousie University’s School for Resource and Environmental Studies in Halifax. “We’re only meant to have a few of them, and we’re meant to use them until they fall apart.”
In late 2022, the federal government rolled out a ban on the manufacture, import and sale of several single-use plastics, including checkout bags. The regulations are being contested in court, but in the meantime, they remain in effect.
The regulations have made single-use shopping bags scarce in Canada, but they’ve also led to the proliferation of reusable bags, especially for grocery delivery.
“It just creates more waste, which is what we’re trying to avoid in the first place,” Walmart customer Udi Sela said in a CBC News interview in late 2022.
At the time, Sela, who lives in Maple, Ont., estimated his family had acquired about 300 reusable Walmart bags via grocery delivery.
“We can’t return them, we can’t do much with them.”
Now, a little more than a year later, Walmart has launched a pilot project to address the problem.
It allows customers to pack up their unwanted reusable Walmart blue bags and ship them — at no charge — to a facility where they’ll get a second life.
How it works
According to Walmart, bags in good condition will be laundered and donated to charity, primarily Food Banks Canada. Damaged bags will get recycled into other materials. Reusable bags typically can’t go in blue bins because they’re costly and difficult to recycle.
Customers must sign up for Walmart’s program, and enrolment is limited.
Jennifer Barbazza, Walmart’s senior manager of sustainability, said the retailer will fine-tune the details as the program progresses.
“[We] know that some customers have more reusable bags than maybe they need,” she said. “One of the things that we’re really excited to learn about from the pilot is customer acceptance and customer feedback.”
WATCH | Is your home overrun with reusable bags? Join the club:
Reusable bags are living rent free in closets and car trunks across the country. Most major retailers made the switch away from single-use plastic bags about a year ago, but it’s taking time for some customers to catch on. They’re forgetting to bring their bags with them, and buying more every week.
Udi Sela has already signed up.
“I definitely think it’s a step in the right direction,” he said in an interview on Friday. “It’s something that needed to be done a while ago. God knows we’ve got a ton of bags kind of piled up.”
He said he’s concerned that some customers may find mailing the bags a hurdle. However, it’s not deterring Sela, who soon plans to ship hundreds.
Passing the buck?
Not everyone is keen on Walmart’s project. Emily Alfred, a waste campaigner with Toronto Environmental Alliance, said donating the bags to the food bank is just passing on the problem.
“We need to remove waste from the system entirely, and just sending these somewhere else for someone else to deal with is not really a solution,” she said.
Alfred said a better option is a program Walmart piloted in Guelph, Ont., in 2022. For a fee, customers could check out reusable bags from an in-store kiosk and later return them to be cleaned and reused.
“That’s a real circular reuse system,” she said.
Walmart’s Barbazza said the retailer is continuing to explore different reusable bag programs, including ones placed in stores.
She also said she’s confident Canada’s food banks will make good use of the bags.
“There’s definitely a need for sturdy items to distribute materials to the food bank clients.”
The paper problem
Among Canada’s major grocers, only Walmart offers a reusable bag program for all customers.
Loblaw recently switched from reusable to recyclable paper bags for grocery delivery. Sobeys did not respond to requests for comment, but according to its website, the grocer also uses paper bags and “reusable options” for home delivery.
Several environmental experts say paper bags aren’t a good solution, because their production leaves a sizable carbon footprint.
“Paper bags are a problem,” Alfred said. “It takes a lot of energy to recycle paper, takes a lot of trees and energy to make new paper.”
Loblaw said it continues to explore a variety of more sustainable solutions. “It’s a challenge we’re committed to addressing,” spokesperson Dave Bauer said in an email.
Both Walker and Alfred applaud Metro for its grocery delivery program, because the grocer, which operates in Ontario and Quebec, reuses delivery materials.
Metro said customers can get their goods delivered in a cardboard box or reusable bags, which can be returned and used for another delivery. Or customers can opt for a plastic bin and remove their groceries from it upon arrival.
Metro does not offer similar programs for in-store shoppers.
Alfred said the federal government should introduce regulations that mandate retailers adopt effective reusable bag programs for all customers.
“It’s up to our governments and people to demand that these companies do better,” she said.
But Walker suggested that the regulations would be hard to enforce and that incentives could be a better tactic.
For example, if retailers increased the price of reusable bags, shoppers might be less likely to forget them when they head to the store, he said.
“When the cost is a disincentive to do an activity, people change their behaviour.”
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