Canada suffered worse threats than Indigenous protests, western alienation: Chretien – Global News

Economists anticipate that Canada’s annual inflation rate in August fell to its lowest level since March 2021.

Ahead of Statistics Canada’s consumer price index set to be released on Tuesday, economists polled by Reuters are expecting the report to show prices rose 2.1 per cent from a year ago, down from a 2.5 per cent annual gain in July. The forecasters also anticipate inflation remained flat on a month-over-month basis.

“Unless there’s something lurking out there that we’re not aware of, it looks like we’re headed for a pretty favourable reading,” said BMO chief economist Douglas Porter.

RBC economists Nathan Janzen and Claire Fan said in a report last week that those expectations would put the headline inflation rate just a hair over the Bank of Canada’s two per cent inflation target.

“Most of that August slowing is expected from a pullback in gasoline prices, but the (Bank of Canada’s) preferred core CPI measures are also expected to trend lower, with the closely-watched three-month annualized growth rate easing from an average of 2.6 per cent in July,” the RBC economists said.

The continued progress on slowing inflation comes as the central bank has signalled a willingness to speed up cuts to its key lending rate if circumstances warrant.

The Bank of Canada reduced its key lending rate by a quarter-percentage point earlier this month — the third consecutive cut — to 4.25 per cent. Governor Tiff Macklem said the decision was motivated by falling inflation, noting if the CPI moving forward “was significantly weaker than we expected … it could be appropriate to take a bigger step, something bigger than 25 basis points.”

On the other hand, Macklem said if inflation is stronger than expected, the bank could slow the pace of rate cuts.

Inflation has remained below three per cent since January and fears of price growth reaccelerating have diminished as the economy has weakened.

Porter said despite progress on the inflation rate, it’s still “not in a place where it’s a compelling argument that the bank has to go even faster.”

He forecasts the central bank will cut its key lending rate by a quarter-percentage point at every meeting until July 2025, bringing it down to 2.5 per cent by that time. That prediction also comes after data released last week that showed Canada’s unemployment rate rose to 6.6 per cent in August from 6.4 per cent in July.

However, Porter said it’s possible the bank could speed up its rate cutting cycle if inflation continues easing.

“If we’re going to be wrong, it’s that we’re going to get to 2.5 per cent even more quickly and possibly lower than that,” said Porter.

“There is a case to be made that if the economy were to weaken further, there’s little reason for the bank to keep rates in what they consider to be the neutral zone. They could go below that.”

Shelter costs have remained the main driver of inflation as Canadians face high rents and mortgage payments. Porter noted that when factoring out housing costs, inflation in both Canada and U.S. is hovering slightly above one per cent.

“So really, the only thing keeping Canadian inflation above two per cent is shelter and it does look like shelter costs are probably going to fade,” he said.

“It looks as if rents are starting to moderate. They’re not necessarily falling, but not rising as quickly. And of course with interest rates coming down, ultimately the big kahuna here, mortgage interest costs, will recede as well.”

With the U.S. Federal Reserve set to meet on Wednesday, Janzen and Fan said they expect the American central bank to announce its first rate cut in four years.

“Gradual but persistent labour market softening and slowing inflation make it clear that current high interest rates are no longer needed,” they wrote.

“We think governor (Jerome) Powell’s comments will likely stay on the cautious side — hinting at future rate cuts without committing to a pre-determined path to allow for more flexibility in future decisions.”

—With files from Nojoud Al Mallees in Ottawa

This report by The Canadian Press was first published Sept. 15, 2024.

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MONTREAL – Passengers with plans to fly on Canada’s largest airline can breathe a sigh of relief after Air Canada said Sunday it has reached a tentative agreement with the union representing more than 5,200 of its pilots.

The news of a preliminary deal with the Air Line Pilots Association came shortly after midnight on Sunday when the airline issued a press release just days ahead of a potential work stoppage for Air Canada and Air Canada Rouge.

The tentative deal averts a strike or lockout that could have begun on Wednesday, with flight cancellations expected before then.

“The new agreement recognizes the contributions and professionalism of Air Canada’s pilot group, while providing a framework for the future growth of the airline,” the carrier said in the statement.

It said Air Canada and Air Canada Rouge will continue to operate as normal while union members vote on the tentative four-year contract.

It said the terms of the new deal will remain confidential pending a ratification vote by the membership, expected to be completed over the next month, and approval by Air Canada’s board of directors.

ALPA issued a statement after midnight Sunday, saying if ratified, the tentative agreement will generate an approximate additional $1.9 billion of value for Air Canada pilots over the course of the agreement.

First Officer Charlene Hudy, chair of the Air Canada ALPA MEC, says in a Sunday statement, “The consistent engagement and unified determination of our pilots have been the catalyst for achieving this contract.” She added that progress was made on several key issues including compensation, retirement, and work rules.

The airline said customers who changed flights originally scheduled from between Sunday and Sept. 23 under its labour disruption plan can change their booking back to their original flight in the same cabin at no cost, providing there is space available.

In the lead-up to Sunday’s deadline to issue notice of a stoppage, the two sides said they remained far apart on the issue of pay, which was central in the negotiations that had stretched for more than a year.

The pilots’ union argued Air Canada continues to post record profits while expecting pilots to accept below-market compensation. It had also said about a quarter of pilots report taking on second jobs, with about 80 per cent of those doing so out of necessity.

The airline had said it has offered salary increases of more than 30 per cent over four years, plus improvements to benefits, and said the union was being inflexible with “unreasonable wage demands.”

Air Canada and numerous business groups had called on the government to intervene in the matter, including the Canadian Federation of Independent Business and the Canadian and U.S. Chambers of Commerce.

“The Government of Canada must take swift action to avoid another labour disruption that negatively impacts cross-border travel and trade, a damaging outcome for both people and businesses,” said the chambers and the Business Council of Canada in a statement Friday.

The union had called for the opposite approach, with Association President Capt. Tim Perry issuing a Friday statement asking Ottawa to respect workers’ collective rights and refrain from getting involved in the bargaining process. He said the government intervention violates the constitutional rights and freedoms of Canadians.

For his part, Prime Minister Justin Trudeau had said it’s up to the two sides to hash out a deal.

Trudeau said Friday the government isn’t just going to step in and fix the issue, something it did promptly after both of Canada’s major railways saw lockouts in August and during a strike by WestJet mechanics on the Canada Day long weekend.

He said the government respects the right to strike and would only intervene if it became clear no negotiated agreement was possible.

Air Canada had already begun preparing for a possible shutdown, saying its cargo service had stopped accepting items such as perishables and indicating a wind-down plan for passenger flights would take effect if a notice of a strike or lockout was issued.

The tentative deal averts travel disruptions for the 670 daily flights on average operated by Air Canada and Air Canada Rouge, and the travel of more than 110,000 passengers.

This report from The Canadian Press was first published Sept. 15, 2024.

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OTTAWA – Conservative Leader Pierre Poilievre will gather with his caucus on Parliament Hill today as he prepares to make another push to topple the Liberal government as early as next week.

The one-day caucus meeting ahead of the return of Parliament Monday will begin with a public address by Poilievre, who has maintained his party’s commanding lead in the polls throughout the summer.

They are the last of the major parties to have a fall strategy session after the Liberals, NDP and Bloc Québécois all met last week.

All parties are adjusting their autumn plans after NDP Leader Jagmeet Singh ended the agreement that was ensuring the Prime Minister Justin Trudeau’s Liberal government would stay in power.

Poilievre has promised to bring in a non-confidence motion at his first opportunity, and that could happen as early as Monday.

The Tories would likely need the support of both the NDP and the Bloc to pass the motion, which appears unlikely.

The Conservative agenda for the fall will include a heavy focus on the economy and a continued push to end the carbon price.

Conservative MP Michelle Rempel Garner also plans to introduce legislation to address online harassment and sexual exploitation of children.

This report by The Canadian Press was first published Sept. 15, 2024.

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