Business

Interest rates may stay higher for good: Bank of Canada’s Carolyn Rogers

Published

11 months ago

November 9, 2023

The Bank of Canada’s No. 2 official urged preparation for interest rates staying elevated for longer.

Senior deputy governor Carolyn Rogers said households and businesses in Canada should ready themselves for an era of borrowing costs higher than over the past 15 years, given the run-up in interest rates since the middle of 2021.

“It’s not hard to see a world where interest rates are persistently higher than what people have grown used to,” Rogers said in prepared remarks in Vancouver.

Structural forces that were keeping borrowing costs low look to have peaked and may be reversing, Rogers said, adding that higher government debt and geopolitical risks have the potential to push rates around the world even higher.

Rising longer-term borrowing costs are adding to debt service costs for businesses and individuals, Rogers said, leaving “less wiggle room” for the financial system in the event of a shock, like another sharp tightening of financial conditions.

“As a small, open economy, Canada likely wouldn’t be immune if severe global stress were to re-emerge and persist.”

Some Canadians are feeling pressured as they contend with both higher inflation and higher interest rates, she said, and are struggling to deal with existing debt. With 40 per cent of mortgage holders already seeing their shorter-duration mortgages renew at higher interest rates, Rogers said officials are watching how households adjust.

“By the end of 2026, virtually all remaining mortgage holders will go through a renewal cycle and, depending on the path for interest rates, may face significantly higher payments.”

Rogers said banks and financial institutions are keeping bigger capital and liquidity buffers, and are putting more cash aside as a “proactive adjustment” to contend with possible credit losses.

While Rogers made clear her comments weren’t meant to be predictive in terms of the path for the Bank of Canada’s overnight rate, the speech also adds to evidence policymakers increasingly see borrowing costs as less restrictive. The bank held its key rate at five per cent for the second straight meeting in October, citing mounting evidence of a slowing economy despite increased inflation risks.

Speaking to lawmakers last week, governor Tiff Macklem said the neutral rate — the theoretical level of interest rates that is neither restrictive nor stimulative — was probably drifting higher, and he admitted he wasn’t comfortable with the bank’s decision to leave the range for the neutral rate between two per cent and three per cent in their annual review earlier this year.

Source link

Business

Suncor Energy pleads guilty to charges for 2019 injury on oil vessel off Newfoundland

Published

3 days ago

September 27, 2024

Anne Joseph

ST. JOHN’S, N.L. – Suncor Energy has been fined $90,000 after pleading guilty to two charges stemming from a worker injury in 2019 aboard its production vessel in an oilfield off the coast of Newfoundland.

In a news release Thursday, the province’s offshore oil regular said the company must also give $20,000 to the College of the North Atlantic’s health and safety management program.

The Canada-Newfoundland and Labrador Offshore Petroleum Board says Calgary-based Suncor pleaded guilty on Sept. 5 for failing to ensure the safety of its employees and failing to ensure its employees wore a safety harness attached to a lifeline while inside a confined space.

The board says a worker fell 7.6 metres from a safety ladder while testing for hydrogen sulfide in a ballast tank on the floating production and storage vessel in the Terra Nova offshore oilfield.

An agreed statement of facts says two emergency response workers then went into the tank to tend to the fallen man, and they were not wearing gas masks.

Suncor Energy is the majority owner of the Terra Nova oilfield, and it reported net earnings of $1.57 billion in the second quarter of this year.

This report by The Canadian Press was first published Sept. 17, 2024.

Source link

Business

TD Bank announces new co-heads of U.S. commercial banking business

Published

4 days ago

September 26, 2024

Anne Joseph

Toronto-Dominion Bank has named new co-heads of its U.S. commercial banking business.

TD says Andy Bregenzer and Jill Gateman will jointly lead the operations.

The bank says the appointments follow the announcement earlier this year of Chris Giamo’s retirement.

Bregenzer will focus on leading all aspects of the regional commercial bank, including small business.

Gateman will lead TD’s national commercial banking effort in the U.S., including middle market, sponsor-backed finance and TD’s other specialty lending lines of business.

TD, which is working to resolve investigations into failures in its anti-money laundering program in the U.S., announced last week that chief executive Bharat Masrani would retire next year and be replaced by Raymond Chun.

This report by The Canadian Press was first published Sept. 26, 2024.

Companies in this story: (TSX:TD)

Source link

Business

Payments tech company Lightspeed Commerce conducting strategic review of business

Published

4 days ago

September 26, 2024

Anne Joseph

MONTREAL – Lightspeed Commerce Inc. says it is conducting a review of its business and operations including talks relating to a range of potential strategic alternatives.

The Montreal-based payments technology company made the comments after reports concerning a potential transaction involving the company.

Lightspeed says it periodically undertakes a review of its business and operations with a view of realizing its full potential.

A strategic review is often seen by investors as a prelude to a sale by a company.

Lightspeed says its board of directors is committed to acting in the best interests of the company and its stakeholders.

Company founder Dax Dasilva returned to the role of chief executive officer earlier this year and has been working to return the company to profitability.

This report by The Canadian Press was first published Sept. 26, 2024.

Companies in this story: (TSX:LSPD)

Source link