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Despite record high inflation, Bank of Canada holds interest rate steady — for now – CBC News

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The Bank of Canada has decided not to raise its benchmark interest rate just yet.

Like many other central banks around the world, the bank slashed its core lending rate — known as the target for the overnight rate — at the onset of the pandemic in March 2020, to ensure that consumers and businesses had access to cheap lending in order to keep the economy afloat.

But two years of rock-bottom lending rates have been a major contributor to inflation, which rose to almost five per cent in Canada last month — its highest level in more than 30 years.

That prompted expectations that the bank would need to start raising its rate soon. But the bank decided not to do that yet, electing to keep its rate at 0.25 per cent, the same level it’s been for the last 670 days.

But it did make it clear that it could be leaning that way in the very near future.

While the rate stayed the same, the bank did decide to do away with what it calls its “exceptional forward guidance” to keep rates where they are for as long as is needed, until the slack in the economy gets absorbed.

“This is a significant shift in monetary policy,” governor Tiff Macklem said at a press conference following the announcement. “[It] signals that interest rates will now be on a rising path.”

But the bank said the ongoing uncertainty around the Omicron variant means it’s not ready to take its first steps along that path yet.

WATCH | Bank of Canada explains why it isn’t ready to hike rates yet:

Bank of Canada governor discusses timeline for getting back to normal post-pandemic

2 hours ago

Duration 1:52

Tiff Macklem is asked when the bank will be ready to remove stimulus from the economy. 1:52

At least one bank watcher says standing pat was a mistake.

“The decision, in our view, is a policy misstep,” foreign exchange analyst Simon Harvey with Monex Canada said, “and is one that could prove costly later down the line.”

By waiting to raise its rate, Harvey said, the bank risks “emboldening near-term inflation expectations and flaming the fire underneath the housing market.”

Canada’s housing market has been on fire during the pandemic, with cheap lending acting like rocket fuel on the burning tinder of demand, sending prices higher. 

The central bank’s rate impacts the rates that Canadians get from their banks on things such as variable-rate mortgages, so keeping the rate low will extend that.

Adrian Howell owns a condo in Toronto, and has a variable rate loan on it. He says he’s looking to lock in to a fixed rate before interest rates rise. (Doug Husby/CBC)

That’s good news for Adrian Howell, who has a variable rate loan on his Toronto condo and has been watching the market intently, waiting for a time to lock in before rates go up. 

“With the interest rates now remaining the same, I have a little bit more time to sort of do some comparison shopping, but I’m definitely going to lock my rate in or lock into a fixed mortgage at some point before March,” he told CBC News in an interview.

He isn’t the only one. Mortgage broker Sung Lee with Rates.ca says she’s seeing a number of existing owners and would-be buyers trying to lock in ahead of hikes to come.

“Whether it’s potential clients that are looking to put an offer on a home or for mortgages that are coming up for renewal, we are getting a lot of early renewal requests,” she said. “People are trying to take advantage of the really low interest rate environment before they see any further increases.”

Small increases add up fast

While the bank is expected to start hiking slowly, a number of small hikes in a row would add up.

Lee says today, a qualified buyer on a variable rate loan could get a $500,000 mortgage that would cost them $1,964 a month to pay back over 25 years.

One rate hike would add $58 a month to their monthly payment, while four hikes would take it up to just over $2,200 a month. Their mortgage rate would only have gone up by one percentage point from 1.35 per cent to 2.35, but their actual payment would have increased by more than 12 per cent.

And that’s just with four hikes, not the six or seven that the market is anticipating. Math that adds up that quickly could be tough to swallow “if someone is on a very tight budget and they don’t want to have to worry about fluctuations in their payments,” she said.

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Eby wants all-party probe into B.C. vote count errors as election boss blames weather

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Premier David Eby is proposing an all-party committee investigate mistakes made during the British Columbia election vote tally, including an uncounted ballot box and unreported votes in three-quarters of the province’s 93 ridings.

The proposal comes after B.C.’s chief electoral officer blamed extreme weather, long working hours and a new voting system for human errors behind the mistakes in last month’s count, though none were large enough to change the initial results.

Anton Boegman says the agency is already investigating the mistakes to “identify key lessons learned” to improve training, change processes or make recommendations for legislative change.

He says the uncounted ballot box containing about 861 votes in Prince George-Mackenzie was never lost, and was always securely in the custody of election officials.

Boegman says a failure in five districts to properly report a small number of out-of-district votes, meanwhile, rippled through to the counts in 69 ridings.

Eby says the NDP will propose that a committee examine the systems used and steps taken by Elections BC, then recommend improvements in future elections.

“I look forward to working with all MLAs to uphold our shared commitment to free and fair elections, the foundation of our democracy,” he said in a statement Tuesday, after a news conference by Boegman.

Boegman said if an independent review does occur, “Elections BC will, of course, fully participate in that process.”

He said the mistakes came to light when a “discrepancy” of 14 votes was noticed in the riding of Surrey-Guildford, spurring a review that increased the number of unreported votes there to 28.

Surrey-Guildford was the closest race in the election and the NDP victory there gave Eby a one-seat majority. The discovery reduced the NDP’s victory margin from 27 to 21, pending the outcome of a judicial review that was previously triggered because the race was so close.

The mistakes in Surrey-Guildford resulted in a provincewide audit that found the other errors, Boegman said.

“These mistakes were a result of human error. Our elections rely on the work of over 17,000 election officials from communities across the province,” he said.

“Election officials were working 14 hours or more on voting days and on final voting day in particular faced extremely challenging weather conditions in many parts of the province.

“These conditions likely contributed to these mistakes,” he said.

B.C.’s “vote anywhere” model also played a role in the errors, said Boegman, who said he had issued an order to correct the results in the affected ridings.

Boegman said the uncounted Prince George-Mackenzie ballot box was used on the first day of advance voting. Election officials later discovered a vote hadn’t been tabulated, so they retabulated the ballots but mistakenly omitted the box of first-day votes, only including ballots from the second day.

Boegman said the issues discovered in the provincewide audit will be “fully documented” in his report to the legislature on the provincial election, the first held using electronic tabulators.

He said he was confident election officials found all “anomalies.”

B.C. Conservative Party Leader John Rustad had said on Monday that the errors were “an unprecedented failure by the very institution responsible for ensuring the fairness and accuracy of our elections.”

Rustad said he was not disputing the outcomes as judicial recounts continue, but said “it’s clear that mistakes like these severely undermine public trust in our electoral process.”

Rustad called for an “independent review” to make sure the errors never happen again.

Boegman, who said the election required fewer than half the number of workers under the old paper-based system, said results for the election would be returned in 90 of the province’s 93 ridings on Tuesday.

Full judicial recounts will be held in Surrey-Guildford and Kelowna-Centre, while a partial recount of the uncounted box will take place in Prince George-Mackenzie.

Boegman said out-of-district voting had been a part of B.C.’s elections for many decades, and explained how thousands of voters utilized the province’s vote-by-phone system, calling it a “very secure model” for people with disabilities.

“I think this is a unique and very important part of our elections, providing accessibility to British Columbians,” he said. “They have unparalleled access to the ballot box that is not found in other jurisdictions in Canada.”

This report by The Canadian Press was first published Nov. 5, 2024.



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Memorial set for Sunday in Winnipeg for judge, senator, TRC chair Murray Sinclair

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WINNIPEG – A public memorial honouring former judge, senator and chair of the Truth and Reconciliation Commission into residential schools, Murray Sinclair, is set to take place in Winnipeg on Sunday.

The event, which is being organized by the federal and Manitoba governments, will be at Canada Life Centre, home of the NHL’s Winnipeg Jets.

Sinclair died Monday in a Winnipeg hospital at the age of 73.

A teepee and a sacred fire were set up outside the Manitoba legislature for people to pay their respects hours after news of his death became public. The province has said it will remain open to the public until Sinclair’s funeral.

Sinclair’s family continues to invite people to visit the sacred fire and offer tobacco.

The family thanked the public for sharing words of love and support as tributes poured in this week.

“The significance of Mazina Giizhik’s (the One Who Speaks of Pictures in the Sky) impact and reach cannot be overstated,” the family said in a statement on Tuesday, noting Sinclair’s traditional Anishinaabe name.

“He touched many lives and impacted thousands of people.”

They encourage the public to celebrate his life and journey home.

A visitation for extended family, friends and community is also scheduled to take place Wednesday morning.

Leaders from across Canada shared their memories of Sinclair.

Premier Wab Kinew called Sinclair one of the key architects of the era of reconciliation.

Prime Minister Justin Trudeau said Sinclair was a teacher, a guide and a friend who helped the country navigate tough realities.

Sinclair was the first Indigenous judge in Manitoba — the second in Canada.

He served as co-chair of the Aboriginal Justice Inquiry of Manitoba to examine whether the justice system was failing Indigenous people after the murder of Helen Betty Osborne and the police shooting death of First Nations leader J.J. Harper.

In leading the Truth and Reconciliation Commission, he participated in hundreds of hearings across Canada and heard testimony from thousands of residential school survivors.

The commissioners released their widely influential final report in 2015, which described what took place at the institutions as cultural genocide and included 94 calls to action.

This report by The Canadian Press was first published Nov. 5, 2024.

The Canadian Press. All rights reserved.



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House of Commons committee looks to recall Tom Clark about New York City condo

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OTTAWA – Members of Parliament studying the federal government’s decision to buy a $9-million luxury condo in Manhattan are preparing to recall Canada’s consul general in New York to answer more questions about his involvement in the purchase.

The Conservatives put forward a motion on Tuesday to have Tom Clark return to the House operations committee. The move was supported by other opposition parties after new information emerged that contradicted his previous testimony.

Clark told the committee in September he had no role whatsoever in the purchase of the new condo, or the sale of the previous residence.

But reporting from Politico on Tuesday indicated Clark raised concerns about the old unit two months after he was appointed to his role as Canada’s representative in New York.

Politico cited documents obtained through access-to-information, which were then shared with other media by the Conservative party.

A May 2023 report from Global Affairs Canada indicates Clark informed government officials the residence needed to be replaced.

“The current (consul general in New York, head of mission) expressed concerns regarding the completion of the … kitchen and refurbishment project and indicated the unit was not suitable to be the (consul general’s) accommodations,” the report reads.

“It does not have an ideal floor plan for (consul general in New York) representational activities.”

The final call on whether Clark will face further questions has not been made, however, because the committee adjourned before the motion went to a vote. The committee’s next meeting is next week.

Tuesday’s meeting featured Foreign Affairs Minister Mélanie Joly as a witness, and she faced questions about Clark’s involvement in the purchase.

“This was not a political decision because this was an operational decision,” Joly told the committee in a testy exchange with Conservative MP Michael Barrett.

“(The committee) had numerous people, officials of mine, that came to see you and said that. So, these are the facts.”

Joly later told the committee she only learned of the decision to purchase a new residence through media reports, even though her chief of staff was notified weeks earlier.

“The department informed my chief of staff once the decision was taken. Because, of course, it was not a political decision,” Joly said.

Shortly before Joly was excused, Conservative MP Stephanie Kusie put forward the motion to recall Clark for two more hours to answer more questions.

Bloc MP Julie Vignola proposed instead to have him testify for only one hour — indicating she would support the motion with that change.

“One hour is more than enough to know whether he lied to us,” Vignola told her colleagues in French.

NDP MP Taylor Bachrach also said he would support the move, given the contrast between the new report and Clark’s testimony about whether he spoke to anyone about a desire to move into a new residence.

“What really irks me is the consul general was so clear in response to repeated questioning at committee,” Bachrach said.

“Mr. Clark said, ‘Never.’ One-word answer, ‘Never.’ You can’t get more unequivocal than that.”

The Liberal government has argued that buying the new residence will save Canadians taxpayers millions of dollars and reduce ongoing maintenance costs and property taxes while supporting future program needs for the consul general.

The former official residence is listed for sale at $13 million, but has yet to be sold.

In her remarks Tuesday, Joly told the committee other like-minded countries have paid more for their Manhattan residences than Canada has — including $11 million for the U.K., and France’s $19 million purchase in 2015.

Joly said among the countries that have residences in New York, only Afghanistan and Bangladesh were not located in Manhattan.

This report by The Canadian Press was first published Nov. 5, 2024.

The Canadian Press. All rights reserved.



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