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July retail sales ‘positive surprise’ but need more rate cuts to persist: analysts

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Retail sales edged up in July, but economists say it will take further interest rate cuts to really spark lasting activity.

Statistics Canada said Friday that retail sales rose 0.9 per cent to $66.4 billion in July, helped by stronger new car sales.

The agency said sales were higher in seven of the nine subsectors it tracks with sales at motor vehicle and parts dealers up 2.2 per cent, boosted by a 2.3 per cent increase in sales at new car dealers.

“It’s rare to see a positive surprise from Canadian consumers these days, but the July retail sales report delivered,” Shelly Kaushik, an economist with BMO Capital Markets, said in a note to investors.

The period the figures covered was largely marked by people anticipating and then delighting in the Bank of Canada’s decision to cut its key interest rate in July. The central bank cut rates again in September to 4.25 per cent.

The rate has weighed on shoppers, particularly those looking to make big purchases or take out mortgages, but as it’s been dropping, it’s delivered some relief to wallets.

That was reflected in core retail sales, which exclude gasoline stations and fuel vendors and motor vehicle and parts dealers. They rose 0.6 per cent in July.

Sales at food and beverage retailers increased because of a 1.2 per cent jump in sales at supermarkets and other grocery retailers, a 2.1 per cent climb at specialty food retailers and 0.4 per cent rise at convenience retailers and vending machine operators.

Higher sales were also reported at health and personal care retailers in July.

In volume terms, Statistics Canada said retail sales across the month increased 1.0 per cent.

However, sales at gasoline stations and fuel vendors fell 0.6 per cent for the month as sales for the subsector in volume terms fell 1.7 per cent.

Looking forward, Statistics Canada said its preliminary estimate for retail sales in August pointed to a gain of 0.5 per cent for the month, though it cautioned the figure will be revised.

“As we’ve stressed many times before, spending growth pales in comparison to the population surge,” Kaushik said. “Consumers will need to see more rate cuts filter through the economy to see a more meaningful recovery.”

TD Bank economist Maria Solovieva also detected the same downward trend in retail spending.

“A good start to the quarter is unlikely to sway the odds decisively on whether the Bank of Canada will cut rates by 50 basis points in October,” she told investors in a note.

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

The Canadian Press. All rights reserved.



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Canada expels India’s top diplomat and alleges wider diplomatic involvement in crimes

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TORONTO (AP) — Canada said it has identified India’s top diplomat in the country as a person of interest in the assassination of a Sikh activist there and expelled him and five other diplomats Monday, in an escalating dispute over the June 2023 killing and allegations of other crimes.

Prime Minister Justin Trudeau said Canada was expelling the Indian high commissioner and the others — all persons of interest, as Canada’s foreign minister said police had uncovered evidence of a worsening campaign against Canadian citizens by agents of the Indian government.

“We will never tolerate the involvement of a foreign government threatening and killing Canadian citizens on Canadian soil,” Trudeau said. He alleged that diplomats were collecting information about Canadians and passing it on to organized crime to attack Canadians, and said “India has made a monumental mistake.”

India has rejected the accusations as absurd.

India’s foreign ministry in turn said it was expelling Canada’s acting high commissioner and five other diplomats, adding that they were told to leave by the end of Saturday.

Trudeau said last year there were credible allegations that India’s government had links to the assassination in Canada of Sikh activist Hardeep Singh Nijjar.

Canada’s foreign minister, Mélanie Joly, said the Royal Canadian Mounted Police had gathered “ample, clear and concrete evidence which identified six individuals as persons of interest in the Nijjar case.”

She said India was asked to waive diplomatic and consular immunity and cooperate in the investigation but refused. She asked that India’s government support the ongoing investigation “as it remains in both our countries’ interest to get to the bottom of this.”

She noted that violence “actually increased” following the allegations a year ago.

RCMP Mike Duheme said police have evidence allegedly tying Indian government agents to other homicides and violent acts in Canada.

“The team has learned a significant amount of information about the breadth and depth of criminal activity orchestrated by agents of the government of India, and consequential threats to the safety and security of Canadians and individuals living in Canada,” he said.

Duheme declined to provide specifics, citing ongoing investigations, but he said there have been well over a dozen credible and imminent threats that have resulted in police warning members of the South Asian community, notably the pro-Khalistan, or Sikh independence, movement. He said attempts to have discussions with Indian law enforcement were unsuccessful.

Nijjar, 45, was fatally shot in his pickup truck after he left the Sikh temple he led in Surrey, British Columbia. An Indian-born citizen of Canada, he owned a plumbing business and was a leader in what remains of a once-strong movement to create an independent Sikh homeland.

Four Indian nationals living in Canada were charged with Niijar’s murder.

India designated Nijjar a terrorist in 2020, and at the time of his death had been seeking his arrest for alleged involvement in an attack on a Hindu priest.

India has repeatedly criticized Trudeau’s government for being soft on supporters of the Khalistan movement who live in Canada. The Khalistan movement is banned in India but has support among the Sikh diaspora, particularly in Canada.

India has been asking countries like Canada, Australia and the U.K. to take legal action against Sikh activists. India has particularly raised these concerns with Canada, where Sikhs make up nearly 2% of the country’s population.

In response to Canada’s earlier allegations, India told Canada last year to remove 41 of its 62 diplomats in the country. Relations between the countries have been frosty since then.

The Indian foreign ministry said Monday that “India reserves the right to take further steps in response to the Trudeau government’s support for extremism, violence and separatism against India.”

The ministry also summoned Canada’s top diplomat in New Delhi and told him that “the baseless targeting” of the Indian high commissioner and other diplomats and officials in Canada “was completely unacceptable.”

One of the diplomats, Stewart Wheeler, told reporters after being summoned that India must investigate the allegations and that Canada “stands ready to cooperate with India.”

Meanwhile, the U.S. State Department said in a statement that an Indian inquiry committee set up to investigate a plot to assassinate another prominent Sikh separatist leader living in New York would travel to Washington on Tuesday as part of its ongoing investigations to discuss the case.

“Additionally, India has informed the United States they are continuing their efforts to investigate other linkages of the former government employee and will determine follow-up steps, as necessary,” it said.

Last year, U,S, prosecutors said an Indian government official directed the plot to assassinate Sikh separatist leader Gurpatwant Singh Pannun on American soil and announced charges against a man they said was part of the thwarted conspiracy.

The official was neither charged nor identified by name, but was described as a “senior field officer” with responsibilities in security management and intelligence, and was said to have previously served in India’s Central Reserve Police Force.

New Delhi at the time expressed concern after the U.S. raised the issue and said India takes it seriously.

Canada’s foreign minister on Monday noted that India is cooperating with U.S. officials and can do it with Canada as well.

___

Saaliq reported from New Delhi and Hussain from Srinagar, India.



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Weekend water main break not related to big one in June, Calgary official says

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CALGARY – A Calgary official says a water main break has closed a road and left some homes and businesses dry, but says it is not related to a feeder main rupture earlier this year in the same area of the city that resulted in months of water restrictions.

Ryan Kidd, the city’s deputy director of water services, says the recent break happened in a smaller, 250-millimetre cast-iron distribution line that serves the immediate area, which is near Bowness Road and 51 Street North West.

Kidd says water began bubbling up at street level on Sunday night and crews immediately shut down the line for repairs, adding the city typically gets water restored for affected customers within 48 hours.

A massive water main supplying 60 per cent of the drinking water for Calgary ruptured June 5, and Calgarians were urged to cut their indoor water use by 25 per cent amid a state of local emergency.

Crews later found more breaks in the feeder main that needed repairs, and it wasn’t until late last month that restrictions on outdoor watering with potable water were finally lifted.

Kidd says the water main that broke on the weekend was installed in 1959, and he says Calgary usually has over 200 such breaks in a typical year.

“With a cast-iron main, they can develop pinhole leaks after a while. And depending on what happened, the corrosion can cause water main breaks over periods of time,” Kidd said.

The city said last month that it expected to receive a forensic report from consultants on what caused the problems with the feeder main that ruptured in June by the end of October, and details on its findings will be shared when they are available.

This report by The Canadian Press was first published Oct. 14, 2024.

The Canadian Press. All rights reserved.



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Murder, extortion, coercion by India violate Canada’s sovereignty, Trudeau says

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OTTAWA – Prime Minister Justin Trudeau says India has fundamentally violated Canada’s sovereignty and international law by targeting Canadians with murder, extortion and coercion.

Trudeau held a news conference after the RCMP announced the “extraordinary” step of warning the public about safety threats to Canadians linked to Indian government officials.

Earlier today, Canada expelled six Indian diplomats whom the RCMP say refused to comply with investigations, prompting India to retaliate by ordering six Canadian envoys out of the country by Saturday.

Trudeau said he spoke with Indian Prime Minister Narendra Modi at an international summit last week, where he says he stressed that Canada needs New Delhi’s co-operation in the criminal probes.

Foreign Affairs Minister Mélanie Joly says violence linked to India has only increased since last autumn, when Trudeau announced “credible allegations” that New Delhi was involved in a homicide near Vancouver.

This report by The Canadian Press was first published Oct. 14, 2024.

The Canadian Press. All rights reserved.



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