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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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Three teenage girls charged in violent B.C. transit attacks

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NEW WESTMINSTER, B.C. – Three teenage girls have been charged with assault after two separate violent attacks took place on Metro Vancouver’s transit system.

Metro Vancouver Transit Police say the assaults happened on July 11, the first of which was on board a SkyTrain while it travelled from New Westminster to Surrey.

Police say a 16-year-old student was attacked by the three suspects after she tried to prevent one of them from prying open the doors while the train was moving.

The attackers are accused of punching and kicking the girl, then dragging her by her hair before other passengers and SkyTrain attendants in Surrey were able to help her.

Police say the second attack happened about three hours later, when the three boarded a bus and surrounded an 18-year-old woman following a verbal exchange. They punched and kicked the victim and pulled out clumps of her hair.

Officers who were called to the scene identified the suspects as a 13-year-old and a 17-year-old from Surrey, as well as a 15-year-old from Abbotsford. All three have been charged with assault causing bodily harm.

The suspects cannot be named under the Youth Criminal Justice Act.

Police say while they would never ask bystanders to put themselves in harm’s way, the intervention by the other passengers to help the victims in the attacks should be acknowledged.

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

The Canadian Press. All rights reserved.



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B.C. south and central coast under flood watch as atmospheric river approaches

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VANCOUVER – Forecasters have elevated their warnings about an atmospheric river system that is expected to hit coastal British Columbia on Friday, bringing potential flooding, heavy rain and high winds.

B.C.’s River Forecast Centre has issued a flood watch for the south and central coasts, while Environment Canada has upgraded its special weather statement over the region to a rainfall warning, with mountainous areas of Vancouver Island expected to get more than 200 millimetres of precipitation.

The weather agency says the atmospheric river system will arrive early Friday and persist through provincial election day on Saturday in places including Metro Vancouver, Whistler and almost all of Vancouver Island.

The north and central coasts from Bella Bella to Haida Gwaii are also under a wind warning, with gusts expected to reach 110 kilometres an hour.

The River Forecast Centre says a high streamflow advisory is in effect for the north coast, upper Fraser and the Thompson regions.

Environment Canada issued the first snowfall warnings of the season along the British Columbia and Yukon border, with accumulations up to 20 centimetres expected in some areas.

The weather office says the snow will spread through southwestern Yukon until Saturday.

It says 10 centimetres of snow is expected in most regions, but predicts up to 25 centimetres in Swift River.

It says an arctic ridge of high pressure will clear the skies on Sunday and temperatures will fall to about -20 degrees Celsius by Monday.

Environment Canada says the “first substantial snow” is also expected south of the border in Fort Nelson, B.C., starting Friday.

It says about 10 centimetres is expected in most regions, but there could be more than 20 centimetres close to the border.

The weather office is warning drivers about low visibility Friday night due to drifting snow.

It says the Trans-Canada Highway near Rogers Pass may also “see wet snow Friday afternoon before it quickly changes to rain as the weather system brings in mild air.”

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

The Canadian Press. All rights reserved.



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Saskatchewan Party’s Moe pledges change room ban in schools; Beck calls it desperate

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REGINA – Saskatchewan Party Leader Scott Moe is promising a directive banning “biological boys” from using school changing rooms with “biological girls” if re-elected, a move the NDP’s Carla Beck says weaponizes vulnerable kids.

Moe made the pledge Thursday at a campaign stop in Regina. He said it was in response to a complaint that two biological males had changed for gym class with girls at a school in southeast Saskatchewan.

He said the ban would be his first order of business if he’s voted again as premier on Oct. 28.

It was not previously included in his party’s campaign platform document.

“I’ll be very clear, there will be a directive that would come from the minister of education that would say that biological boys will not be in the change room with biological girls,” Moe said.

He added school divisions should already have change room policies, but a provincial directive would ensure all have the rule in place.

Asked about the rights of gender-diverse youth, Moe said other children also have rights.

“What about the rights of all the other girls that are changing in that very change room? They have rights as well,” he said, followed by cheers and claps.

The complaint was made at a school with the Prairie Valley School Division. The division said in a statement it doesn’t comment on specific situations that could jeopardize student privacy and safety.

“We believe all students should have the opportunity to learn and grow in a safe and welcoming learning environment,” it said.

“Our policies and procedures align with the Canadian Charter of Rights and Freedoms, the Canadian Human Rights Act and the Saskatchewan Human Rights Code.”

Asked about Moe’s proposal, Beck said it would make vulnerable kids more vulnerable.

Moe is desperate to stoke fear and division after having a bad night during Wednesday’s televised leaders’ debate, she said.

“Saskatchewan people, when we’re at our best, are people that come together and deliver results, not divisive, ugly politics like we’ve seen time and again from Scott Moe and the Sask. Party,” Beck said.

“If you see leaders holding so much power choosing to punch down on vulnerable kids, that tells you everything you need to know about them.”

Beck said voters have more pressing education issues on their minds, including the need for smaller classrooms, more teaching staff and increased supports for students.

People also want better health care and to be able to afford gas and groceries, she added.

“We don’t have to agree to understand Saskatchewan people deserve better,” Beck said.

The Saskatchewan Party government passed legislation last year that requires parents consent to children under 16 using different names or pronouns at school.

The law has faced backlash from some LGBTQ+ advocates, who argue it violates Charter rights and could cause teachers to out or misgender children.

Beck has said if elected her party would repeal that legislation.

Heather Kuttai, a former commissioner with the Saskatchewan Human Rights Commission who resigned last year in protest of the law, said Moe is trying to sway right-wing voters.

She said a change room directive would put more pressure on teachers who already don’t have enough educational support.

“It sounds like desperation to me,” she said.

“It sounds like Scott Moe is nervous about the election and is turning to homophobic and transphobic rhetoric to appeal to far-right voters.

“It’s divisive politics, which is a shame.”

She said she worries about the future of gender-affirming care in a province that once led in human rights.

“We’re the kind of people who dig each other out of snowbanks and not spew hatred about each other,” she said. “At least that’s what I want to still believe.”

Also Thursday, two former Saskatchewan Party government members announced they’re endorsing Beck — Mark Docherty, who retired last year and was a Speaker, and Glen Hart, who retired in 2020.

Ian Hanna, a speech writer and senior political adviser to former Saskatchewan Party premier Brad Wall, also endorsed Beck.

Earlier in the campaign, Beck received support from former Speaker Randy Weekes, who quit the Saskatchewan Party earlier this year after accusing caucus members of bullying.

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

— With files from Aaron Sousa in Edmonton



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