Hannah Green of Australia leads from start to finish to win BMW Ladies Championship

OTTAWA – Forecasters expect the Bank of Canada to speed up the pace of interest rate cuts and lower its policy rate by half a percentage point this week.

The central bank’s interest rate announcement on Wednesday comes after Statistics Canada reported the annual inflation rate in September tumbled to 1.6 per cent — below the Bank of Canada’s two per cent inflation target.

Nathan Janzen, an assistant chief economist at RBC, said the latest consumer price index report reinforced his expectation for a supersized rate cut.

“(You) have an economy that’s probably performing worse than necessary to get inflation under control and still interest rates (are) at restrictive territory. So that makes it a pretty straightforward argument to continue cutting interest rates,” Janzen said, adding that the central bank needs to lower interest rates to a level that doesn’t hinder economic growth.

After the Bank of Canada’s interest rate cut last month, governor Tiff Macklem signalled that the central bank will be ready to cut rates more aggressively if inflation falls by too much.

He’s also said that the central bank now wants to see economic growth pick back up again.

The Bank of Canada has lowered its key interest rate three times so far, bringing it down to 4.25 per cent.

The sharp slowdown in inflation this year has come as somewhat of a surprise for economists who feared price growth might take longer to tame.

Now, the Bank of Canada is contending with the risk that interest rates may actually restrain economic growth by more than desired.

Although the Canadian economy has continued to grow modestly, real gross domestic product has shrunk on a per-capita basis for five consecutive quarters.

The labour market has also loosened considerably, with the unemployment rate in September sitting at 6.5 per cent — up a full percentage point from a year earlier.

The gloomy economic backdrop paired with plummeting inflation have many forecasters convinced that the Bank of Canada will deliver back-to-back jumbo interest rate cuts in both October and December, which would bring its policy rate down to 3.25 per cent.

The parliamentary budget officer projected in its recent economic and fiscal outlook that the central bank will continue cutting rates until its policy rate reaches 2.75 per cent in the second quarter of 2025.

Carl Gomez, chief economist at real estate data company CoStar, said real interest rates in Canada — which are adjusted for inflation — are much higher than in other countries, putting more downward pressure on the Canadian economy.

“What’s interesting is Canada’s real policy rate is still much higher than every other country, but we are dealing with a far weaker economy in Canada than the United States. So this just tells you another reason why the Bank of Canada is so far behind the curve,” Gomez said.

The U.S. annual inflation rate fell to 2.4 per cent in September while the Federal Reserve’s policy rate sits at 4.75 to five per cent.

The Bank of Canada’s interest rate cuts were expected to stimulate activity in the housing market again, raising fears that inflation could rebound.

But Gomez said that while home listings have increased, demand in the housing market is still tepid.

“It’s turned into more of a buyer’s market, which is still pulling house prices down; not allowing them to continue to move up as they had been pre-pandemic,” Gomez said.

Janzen said that while lower interest rates help somewhat with affordability, home prices are still too expensive for many people.

Higher unemployment among younger people is likely weighing on housing demand as well, he said, given many of them would be prospective first-time homebuyers.

“Interest rates are falling, but labour markets are also softening at the same time, so we’re not expecting the same kind of a jump in housing market activity as you might normally expect if interest rates were falling when the unemployment rate was low,” Janzen said.

In addition to its interest rate announcement, the Bank of Canada will publish its quarterly monetary policy report on Wednesday, which will include new economic forecasts.

This report by The Canadian Press was first published Oct. 20, 2024.

MONTREAL – Importers say a new online portal for collecting taxes on goods shipped into Canada is creating headaches ahead of its rollout this week, with potential implications for consumers.

On Monday, the federal government’s digital platform for paying duties is set to come online in an effort to streamline the old, paper-based process that customs officials relied on for decades.

Many of the complaints revolve around registration, while others relate to navigating the platform itself, which will be used to collect some $40 billion in annual revenue.

Lisa McEwan, co-owner of customs brokerage firm Hemisphere Freight, says she’s had to hire new staff to handle the “onboarding” process and help clients make payments amid confusion over issues ranging from business numbers to customs bonds.

She and others also say federal employees seemed overwhelmed and sometimes took weeks to respond to queries in the lead-up to the launch of what’s known as the Canada Border Services Agency Assessment Revenue Management project, or CARM.

The CBSA says the portal will simplify the import process by offering tens of thousands of shippers a modern platform for submitting documents and direct access to their information while shoring up compliance with trade rules.

This report by The Canadian Press was first published Oct. 20, 2024.

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DEIR AL-BALAH, Gaza Strip (AP) — Israeli strikes on homes in the northern Gaza Strip overnight and into Sunday left at least 87 people dead or missing, the territory’s Health Ministry said, as a large-scale operation continued against Hamas militants said to be regrouping.

The ministry said another 40 people were wounded in the strikes on the town of Beit Lahiya, which was among the first targets of Israel’s ground invasion nearly a year ago. The Israeli military said it carried out a strike on a Hamas target.

Palestinian officials say hundreds of people have been killed in Israel’s two-week operation in northern Gaza, and that the health sector there is close to collapse.

The United States, meanwhile, was investigating an unauthorized release of classified documents indicating that Israel was moving military assets into place for a military strike in response to Iran’s ballistic missile attack on Oct. 1., according to three U.S. officials who spoke on the condition of anonymity because they were not authorized to discuss the matter publicly.

Iran supports both Hamas and the Lebanon-based Hezbollah.

The U.S. is urging Israel to press for a cease-fire in Gaza following the killing of Hamas leader Yahya Sinwar last week. But neither Israel nor Hamas has shown interest in such a deal after months of negotiations sputtered to a halt in August.

Lebanese army says 3 soldiers killed in Israeli strike

A year of escalating tensions between Israel and Hezbollah boiled over into all-out war last month. Israel sent ground troops into Lebanon early this month.

The Lebanese army said three soldiers were killed in an Israeli strike Sunday on their vehicle in southern Lebanon. There was no immediate comment on that from the Israeli military, which said it struck more than 100 Hezbollah targets in southern Lebanon in the past day and continued ground operations there.

Lebanon’s army has largely kept to the sidelines in the war. The military is a respected institution in Lebanon but is not powerful enough to impose its will on Hezbollah or defend the country from an Israeli invasion.

Israel’s military said Hezbollah fired more than 170 rockets into the country on Sunday. Israel’s Magen David Adom rescue service said three people were lightly injured from a fire sparked by a rocket attack on the northern city of Safed.

Israel has increased strikes on southern neighborhoods of Beirut known as the Dahiyeh, a crowded residential area where Hezbollah has a strong presence. It is also home to many civilians unaffiliated with the militant group.

U.S. Defense Secretary Lloyd Austin has called civilian casualties in Lebanon “far too high” in the Israel-Hezbollah war and urged Israel to scale back some strikes, especially in and around Beirut.

Medics warn of a catastrophic situation in Gaza

Among the dead from the strikes in Beit Lahiya were parents and eight children, according to Raheem Kheder, a medic. He said the strike flattened a multi-story building and at least four neighboring houses.

The Israeli military said it used precise munitions against a Hamas target. It said the area is an active war zone and it is trying to avoid harming civilians.

Mounir al-Bursh, director general of the Health Ministry, said the flood of wounded from the strikes compounded “an already catastrophic situation for the health care system” in northern Gaza, in a post on X.

Doctors Without Borders, the international charity known by its French acronym MSF, called on Israeli forces to immediately stop their attacks on hospitals in northern Gaza after the Health Ministry said Israeli troops had fired on two hospitals over the weekend.

“The ever-worsening escalation of violence and non-stop Israeli military operations that we have been witnessing over the past two weeks in northern Gaza have horrifying consequences,” said Anna Halford, an emergency coordinator for MSF.

Israel’s military said it was operating near one of the hospitals but had not fired directly at it, and that it was looking into the other incident.

Internet connectivity went down in northern Gaza late Saturday and had not been restored by midday Sunday, making it difficult to gather information about the strikes and complicating rescue efforts.

Israeli operation in northern Gaza enters third week

Israeli forces have repeatedly returned to Jabaliya in northern Gaza, a densely populated urban refugee camp dating back to the 1948 war surrounding Israel’s creation.

The north has already suffered the heaviest destruction of the war, and has been encircled by Israeli forces since late last year.

Israel ordered the entire population of the northern third of Gaza, including Gaza City, to evacuate to the south in the war’s opening weeks and reiterated those instructions this month. Most of the population fled last year, but around 400,000 people are believed to have remained.

On Oct. 7, 2023, Hamas-led militants blew holes in Israel’s security fence and stormed in, killing some 1,200 people, mostly civilians, and abducting another 250. Around 100 captives are still being held in Gaza, a third of whom are believed to be dead.

Israel’s offensive in Gaza has killed over 42,000 Palestinians, according to local health authorities, who do not distinguish combatants from civilians. The war has destroyed large areas of Gaza and displaced about 90% of its population of 2.3 million people.

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Magdy reported from Cairo. Associated Press writers Kareem Chehayeb in Beirut and Zeke Miller, Mike Balsamo, Eric Tucker and Tara Copp in Washington contributed to this report.

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