Governor Stephen Poloz said Thursday in a luncheon speech that worries about the downside risks to the economy today outweighed continuing concerns that cutting rates would fan financial vulnerabilities in Canada, such as high household debt.
Coronavirus outbreak: Trudeau says Canadians can have confidence in cabinet committee
The half a percentage point reduction of the bank’s key rate target to 1.25 per cent marked the first cut since the summer of 2015 and brought the rate to its lowest level since early 2018.
Among the effects of the outbreak are weakened commodity prices that Poloz said will add to tough times in oil-producing regions, before likely spreading the financial hit elsewhere as people affected “spend less money on everything.”
He said a drop in rates could stabilize the housing market, instead of contribute to froth, if a slide in consumer confidence reduces activity.
Poloz left the door open to further rate cuts should the economic circumstances require it.
“The downside risks to the economy today are more than sufficient to outweigh our continuing concern about financial vulnerabilities,” he said, based on a text of his speech released in Ottawa.
The economy may snap back if things quickly return to normal, he said, but warned the situation could be “more persistent” and include “longer-term layoffs.”
“At this point, we simply do not know,” he said.
Coronavirus outbreak: Uncertain future for remaining passengers aboard the Grand Princess
Many of the implications and responses to COVID-19 lie beyond the bank’s control, Poloz said, but added that a rate cut can buffer effects on consumer and business confidence to bridge tough times.
He suggested federal policy-makers find ways to remove hurdles that make it hard for workers to match up with available positions, of which there are half a million in the country, to strengthen the labour market.
The unknowns about the virus have rattled financial markets, disrupted global supply chains and shuttered factories in China that many Canadian businesses rely on for inventories. Worries about catching COVID-19 could also depress consumer spending, which the economy relies on.
Add into the mix a slowdown in the fourth quarter of 2019, rail blockades, unusual winter weather and job action by Ontario teachers and the outlook for growth over the first quarter of this year is weaker than previously forecasted.
“Since it is already March, these factors could easily affect the second quarter,” Poloz said. “There is a real risk that business and consumer confidence will erode further, creating a more persistent slowdown, especially given recent declines in stock markets.”
© 2020 The Canadian Press
gas prices reach new high | CTV News – CTV News Toronto
Gas prices have reached yet another new record after rising six cents per litre overnight.
As of midnight the average price of a litre of fuel across the Greater Toronto Area is now 208.9 cents per litre, according to Canadians for Affordable Energy President Dan McTeague.
The latest jump means that gas prices have now risen 11 cents per litre since Friday, with no real relief in sight due to supply shortages brought about by Russia’s decision to invade Ukraine and the international sanctions that have been imposed a result.
“When you look at the fundamentals, supply and demand for diesel and for gasoline going into the summer driving season, not only is it low or critically low and that is one of the main reasons why prices are going up but the second factor is the Canadian dollar,” McTeague told CP24 last week. “It continues to show weakness despite the fact that in the old good old days when oil was $100 a barrel we would be on par with the U.S. dollar. The fact that we’re not is costing you 33 cents a litre.”
Gas prices have risen by about 60 per cent since last May, when drivers were paying around $1.30 per litre to fill up.
Musk says Twitter legal team told him he violated an NDA – The Globe and Mail
Elon Musk on Saturday tweeted that Twitter Inc.’s legal team accused him of violating a non-disclosure agreement by revealing that the sample size for the social media platform’s checks on automated users was 100.
“Twitter legal just called to complain that I violated their NDA by revealing the bot check sample size is 100!” tweeted Mr. Musk, chief executive of electric car maker Tesla Inc.
Mr. Musk on Friday tweeted that his US$44-billion cash deal to take the company private was “temporarily on hold” while he awaited data on the proportion of its fake accounts.
Twitter legal just called to complain that I violated their NDA by revealing the bot check sample size is 100!
This actually happened.
— Elon Musk (@elonmusk) May 14, 2022
He said his team would test “a random sample of 100 followers” on Twitter to identify the bots. His response to a question prompted Twitter’s accusation.
When a user asked Mr. Musk to “elaborate on process of filtering bot accounts,” he replied “I picked 100 as the sample size number, because that is what Twitter uses to calculate <5% fake/spam/duplicate.”
Mr. Musk tweeted during the early hours of Sunday that he is yet to see “any” analysis that shows that the social-media company has fake accounts less than 5 per cent.
He later said that, “There is some chance it might be over 90 per cent of daily active users.”
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As interest in electric vehicles soars, experts say they haven't quite hit the mainstream – CBC.ca
When a friend told Seymore Applebaum about the efficiency of plug-in hybrid electric vehicles, he was intrigued.
Applebaum, who lives north of Toronto, was in the market for a new car. While safety features were top of mind, the high cost of gasoline couldn’t be ignored.
So in January, he traded in his sedan for a brand-new plug-in hybrid (PHEV), a vehicle that can run on both electricity and gasoline. Applebaum says he can travel almost 50 kilometres on battery power alone — more than enough to get around the city.
On a recent trip downtown, he recalled, “I drove about 45 kilometres … and the only thing I used was the electric motor and the electric battery that runs the car.”
“Normally, on a day like that, [it] would be comparable to $10, $15 of driving cost.”
Automotive industry analysts say rising gas prices have more consumers looking into electrified and electric vehicles (EVs).
Prices at the pump have soared across Canada in recent weeks. Estimates suggest Vancouver could see the country’s highest prices this weekend, potentially hitting $2.34 per litre for regular fuel. According to fuel price tracker GasBuddy, the national average as of Sunday afternoon was just below $1.98 per litre.
“Canadians are motivated by high fuel prices, but they truly believe this is the new normal,” said Peter Hatges, national automotive sector leader for KPMG in Canada, pointing a recent survey by the consulting group.
“When consumers believe it or perceive it to be true, they’re going to modify their behaviour around what kind of vehicles they buy.”
Kevin Roberts, director of industry insights and analytics for U.S.-based online vehicle marketplace CarGurus, told Cross Country Checkup he has seen a similar trend.
“As gas prices went up, interest in electric vehicles went up almost in lockstep with just a couple of days delay for both new and used vehicles,” he said.
But even as interest in electrified cars spikes, experts say too few options — and too high prices — mean they haven’t quite hit the mainstream.
Where consumers in North America favour larger vehicles like SUVs and pickup trucks known for their utility, EVs tend to come in compact or sedan-style models. EV range — and the availability of chargers — are also considerations for many Canadians, said Hatges.
Ramp up production
Big investments into electrification by major automotive makers, however, are beginning to bear fruit.
A greater variety of models and sizes are coming onto the market in the coming years, the analysts say. Battery life is improving too, with several models able to travel more than 400 kilometres on a charge, according to manufacturer estimates.
“It’s absolutely a tipping point,” said Hatges. “I think there’s a confluence of factors that are pointing toward an alternative to the internal combustion engine.”
The big test for consumers will be whether manufacturers can cut prices enough to get customers in the showroom — and EVs on the road — said Grieg Mordue, associate professor and ArcelorMittal chair in advanced manufacturing policy at McMaster University in Hamilton, Ont.
While a handful of models start below $50,000, many run far north of that figure with some selling for over $100,000.
The sweet spot for Canadian buyers? Between $35,000 and $45,000, says Mordue. Key to hitting that price point is mass production, he added.
“We need production in North America of vehicles at that level, and we need high-volume vehicles — not little, niche vehicles where they sell 10,000 or 15,000 of them a year — because that’s a lot of the vehicles that we have now, Tesla notwithstanding,” Mordue told Checkup.
In April, GM announced a $2-billion investment, with support from the Ontario and federal governments, which will see electric vehicles rolling off assembly lines in Oshawa and Ingersoll, Ont., as early as this year.
Stellantis, which owns brands including Dodge and Jeep, is similarly investing billions into electrification at its Windsor and Brampton, Ont., plants.
Mordue cautions, however, that as plants begin producing electric models, it will take time for them to reach the existing output of gas-powered vehicles.
Focus on fuel efficiency
While interest in EVs may be gearing up, Hatges predicts a shift for gas-powered vehicles too.
“I think you’ll see a strive to make cars lighter, more fuel efficient, even when it comes to electricity,” he said. “Heavy vehicles use more power to power themselves down the road, whether it’s electricity or fuel.”
And as long as gas prices stay high, the market could see a shift from SUVs and trucks — which consumers and manufacturers have favoured in recent years — to gas-sipping models.
“We have a fascination with pickup trucks and SUVs, North Americans do, and there’s a lot of them on the road now…. I don’t see that changing any time soon,” he said.
“But in the medium term or in the immediate term, will you see a shift or reconsideration of cars that are more fuel efficient? I think so. The price in the pump is very, very significant.”
Applebaum touted the flexibility of a plug-in hybrid, saying he doesn’t worry about range at all. And though his PHEV cost more than a comparable non-electrified model, trading in his previous vehicle combined with the fuel savings over three to four years made it affordable, he said.
With gas prices now higher than they were in January, “that’s even more true,” he told Checkup.
Now, he says friends are taking notice.
“They’re saying the next car they purchase will be an electric car.”
Written by Jason Vermes with files from Abby Plener.
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