The underlying pressures driving inflation in Canada are likely to peak in the fourth quarter of this year, economists told Reuters, though most see signs fast rising prices are becoming entrenched and warn a recession may be needed to avoid a spiral.
Canada’s inflation data for August will be released on Tuesday, with analysts forecasting the headline rate will edge down to 7.3 per cent, from 7.6 per cent in July and a four-decade high of 8.1 per cent in June.
But all eyes will be on the three core measures of inflation – CPI Common, CPI Median and CPI Trim – which taken together are seen as a better indicator of underlying price pressures.
The average of the three hit a record high of 5.3 per cent in July.
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Six of eight economists surveyed by Reuters see core inflation peaking in the fourth quarter as underlying domestic and global pressures start to ease, though the path back to the two per cent target will not be brisk.
“Rapidly cooling growth, the pullback in housing prices, and less pressure on supply chains will help cap core inflation relatively soon,” said Doug Porter, chief economist at BMO Capital Markets.
“However, we believe that it will be sticky, and will descend only slowly through 2023,” he added.
The broadening of price increases, increased wage settlements, as well as rising consumer and business inflation expectations are signs that inflation is becoming more entrenched in the economy, economists told Reuters. Six of eight said they see signs of entrenchment.
That is an outcome that the Bank of Canada has hoped to avoid, saying it would require more aggressive interest rate hikes to bring inflation back under control.
The central bank has already raised interest rates by 300 basis points in just six months to 3.25 per cent – a 14-year high and the loftiest policy rate among central banks overseeing the 10 most traded currencies.
Still, economists don’t expect any shift to a wage-price spiral to be permanent, particularly if the economy slows down.
“We think aggressive interest rate hikes will be followed by a recession next year … which would prevent expectations from coming fully unanchored,” said Nathan Janzen, assistant chief economist at Royal Bank of Canada.
Economists at Desjardins Group and Oxford Economics also foresee aggressive rate hikes leading to a recession, though they cast it as a mild downturn.
For its parts, the Bank of Canada says it can slow growth without tanking the economy.
“The bank still sees a path to a soft landing. That’s still our objective. We need to cool the economy to get inflation back to target,” Senior Deputy Governor Carolyn Rogers told reporters earlier this month.
As for headline inflation, the central bank has it returning to two per cent in 2024.
Most economists agree with that timeframe or think it could happen sooner.
“We think that’ll be a 2024 story,” said Beata Caranci, chief economist at TD Securities. “But there should be compelling evidence that the data is trending in that direction within the second half of 2023.”
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PORT ALBERNI, B.C. – RCMP say the body of a second person has been found inside their vehicle after a road washed away amid pouring rain on the west coast of Vancouver Island.
Police say two vehicles went into the Sarita River when Bamfield Road washed out on Saturday as an atmospheric river hammered southern B.C.
The body of the other driver was found Sunday.
More coming.
The Canadian Press. All rights reserved.
The B.C. Greens say Sonia Furstenau will be staying on as party leader, despite losing her seat in the legislature in Saturday’s provincial election.
The party says in a statement that its two newly elected MLAs, Jeremy Valeriote and Rob Botterell, support Furstenau’s leadership as they “navigate the prospect of having the balance of power in the legislature.”
Neither the NDP led by Premier David Eby nor the B.C. Conservatives led by John Rustad secured a majority in the election, with two recounts set to take place from Oct. 26 to 28.
Eby says in a news conference that while the election outcome is uncertain, it’s “very likely” that the NDP would need the support of others to pass legislation.
He says he reached out to Furstenau on election night to congratulate her on the Greens’ showing.
But he says the Green party has told the NDP they are “not ready yet” for a conversation about a minority government deal.
The Conservatives went from taking less than two per cent of the vote in 2020 to being elected or leading in 45 ridings, two short of a majority and only one behind the NDP.
This report by The Canadian Press was first published Oct. 22, 2024.
The Canadian Press. All rights reserved.
Toronto FC captain Jonathan Osorio is making a difference, 4,175 kilometres away from home.
The 32-year-old Canadian international midfielder, whose parents hail from Colombia, has been working with the Canadian Colombian Children’s Organization, a charity whose goal is to help disadvantaged youth in the South American country.
Osorio has worked behind the scenes, with no fanfare.
Until now, with his benevolence resulting in becoming Toronto FC’s nominee for the Audi Goals Drive Progress Impact Award, which honours an MLS player “who showed outstanding dedication to charitable efforts and serving the community” during the 2024 season.”
Other nominees include Vancouver Whitecaps midfielder Sebastian Berhalter and CF Montreal goalkeeper Jonathan Sirois.
The winner will be announced in late November.
The Canadian Colombian Children’s Organization (CCCO) is run entirely by volunteers like Monica Figueredo and Claudia Soler. Founded in 1991, it received charitable status in 2005.
The charity currently has four projects on the go: two in Medellin and one each in Armenia and Barranquilla.
They include a school, a home for young girls whose parents are addicted to drugs, after-school and weekend programs for children in a disadvantaged neighbourhood, and nutrition and education help for underprivileged youth.
The organization heard about Osorio and was put in contact with him via an intermediary, which led to a lunch meeting. Osorio did his due diligence and soon got back to the charity with his decision.
“It was something that I wanted to be a part of right away,” said Osorio, whose lone regret is that he didn’t get involved sooner.
“I’m fortunate now that to help more now that I could have back then,” he added. “The timing actually worked out for everybody. For the last three years I have donated to their cause and we’ve built a couple of (football) fields in different cities over there in the schools.”
His father visited one of the sites in Armenia close to his hometown.
“He said it was amazing, the kids, how grateful they are to be able to play on any pitch, really,” said Osorio. “But to be playing on a new pitch, they’re just so grateful and so humble.
“It really makes it worth it being part of this organization.”
The collaboration has also made Osorio take stock.
“We’re very fortunate here in Canada, I think, for the most part. Kids get to go to school and have a roof over their head and things like that. In Colombia, it’s not really the same case. My father and his family grew up in tough conditions, so giving back is like giving back to my father.”
Osorio’s help has been a godsend to the charity.
“We were so surprised with how willing he was,” said Soler.
The TFC skipper has helped pay for a football field in Armenia as well as an ambitious sports complex under construction in Barranquilla.
“It’s been great for them,” Figueredo said of the pitch in Armenia. “Because when they go to school, now they have a proper place to train.”
Osorio has also sent videos encouraging the kids to stay active — as well as shipping soccer balls and signed jerseys their way.
“They know more about Jonathan than the other players in Colombia,” Figueredo said. “That’s the funny part. Even though he’s far away, they’ve connected with him.”
“They feel that they have a future, that they can do more,” she added. “Seeing that was really, really great.”
The kids also followed Osorio through the 2022 World Cup and this summer’s Copa America.
Back home, Osorio has also attended the charity’s annual golf tournament, helping raise funds.
A Toronto native, he has long donated four tickets for every TFC home game to the Hospital for Sick Children.
Vancouver’s Berhalter was nominated for his involvement in the Whitecaps’ partnership with B.C. Children’s Hospital while Montreal’s Sirois was chosen for his work with the Montreal Impact Foundation.
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This report by The Canadian Press was first published Oct. 21, 2024.
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