The global supply chain snags that marked the latter half of 2021 have stretched into the new year and have been worsened by Russia’s invasion of Ukraine, according to a Bank of Canada survey released Monday.
Businesses now expect these persistent snags hampering the flow of goods around the world to drive costs higher in the near term, with most believing inflation relief is still years off.
The central bank’s Business Outlook Survey for the first quarter of 2022 showed a “record high” number of companies are now reporting “capacity pressures” tied to supply chain and labour-related concerns.
The Bank of Canada’s Business Outlook Survey polls senior management from around 100 firms representative of the country’s overall economy.
Though the outlook survey was taken in mid-February — before Russia invaded Ukraine — the Bank of Canada followed up with a supplemental survey to gauge the impact of the eastern European conflict on business confidence.
Roughly half of respondents said they expect to be affected by the war, most commonly through higher cost pressures tied to soaring energy and commodity prices.
Firms do continue to expect strong sales growth, the Bank of Canada said, but at a more moderate pace than the past year.
Businesses that offer in-person, harder-to-distance services are anticipating “significant increases” in sales as COVID-19 restrictions ease.
Businesses surveyed expect average inflation will remain elevated for the next two years, with most firms anticipating inflation will be closer to the central bank’s two per cent target in three years’ time.
Eventual improvement in supply chains and interest rate hikes from the Bank of Canada are cited as the two biggest factors in taming inflation.
2:20 Port of Vancouver issues warning about container capacity
Port of Vancouver issues warning about container capacity – Mar 24, 2022
Avery Shenfield, chief economist with CIBC World Markets, said in a note Monday morning that the elevated inflation expectations tied to the bank’s business outlook survey “cement the case” for the a an interest rate hike of half a percentage point at its next rate target decision in a couple weeks.
“The Bank will take some comfort that respondents see inflation getting back to target by year three, but the near term inflation pressures highlighted in the survey are what make a 50-bp move in April look like a reasonable step at this point,” he wrote.
Nathan Janzen, economist at RBC, said in an interview with the Canadian Press that the new data reinforces the Bank of Canada’s desire and intention to move more aggressively on interest rate hikes.
“It will certainly be more aggressive than what we saw coming out of the ’08-’09 recession or even the oil price collapse in 2015,” he said.
Inflation expectations are similar on the consumer side.
The Canadian Survey of Consumer Expectations — a separate report released the same day by the Bank of Canada — shows inflation on household goods, including gas and food, is expected to remain elevated over the next two years.
The bank’s survey shows consumers expect global supply chain issues will “impede authorities’ ability to control inflation.” The war in Ukraine is also cited as a contributing factor to near-term inflation.
The consumer survey also found that Canadian workers don’t really see their wages increasing enough to match the pace of inflation.
Many Canadians don’t expect high inflation to last forever though, the report added. The consumer survey found that Canadians expect inflation stability in the longer term.
EDMONTON – RCMP say a second suspect has been arrested in the killing of an Alberta county worker.
Mounties say 28-year-old Elijah Strawberry was taken into custody Friday at a house on O’Chiese First Nation.
Colin Hough, a worker with Rocky View County, was shot and killed while on the job on a rural road east of Calgary on Aug. 6.
Another man who worked for Fortis Alberta was shot and wounded, and RCMP said the suspects fled in a Rocky View County work truck.
Police later arrested Arthur Wayne Penner, 35, and charged him with first-degree murder and attempted murder, and a warrant was issued for Strawberry’s arrest.
RCMP also said there was a $10,000 reward for information leading to the arrest of Strawberry, describing him as armed and dangerous.
Chief Supt. Roberta McKale, told a news conference in Edmonton that officers had received tips and information over the last few weeks.
“I don’t know of many members that when were stopped, fuelling up our vehicles, we weren’t keeping an eye out, looking for him,” she said.
But officers had been investigating other cases when they found Strawberry.
“Our investigators were in O’Chiese First Nation at a residence on another matter and the major crimes unit was there working another file and ended up locating him hiding in the residence,” McKale said.
While an investigation is still underway, RCMP say they’re confident both suspects in the case are in police custody.
This report by The Canadian Press was first published Sept. 13, 2024.
RICHMOND, B.C. – The Integrated Homicide Investigation Team says the 26-year-old son of a man found dead on British Columbia’s Sunshine Coast has been charged with his murder.
Police say 58-year-old Henry Doyle was found badly injured on a forest service road in Egmont last September and died of his injuries.
The homicide team took over when the BC Coroners Service said the man’s death was suspicious.
It says in a statement that the BC Prosecution Service has approved one count of first-degree murder against the man’s son, Jackson Doyle.
Police say the accused will remain in custody until at least his next court appearance.
The homicide team says investigators remained committed to solving the case with the help of the community of Egmont, the RCMP on the Sunshine Coast and in Richmond, and the Vancouver Police Department.
This report by The Canadian Press was first published Sept. 13, 2024.
VANCOUVER – Mediated talks between the union representing HandyDART workers in Metro Vancouver and its employer, Transdev, have broken off without an agreement following 15 hours of talks.
Joe McCann, president of Amalgamated Transit Union Local 1724, says they stayed at the bargaining table with help from a mediator until 2 a.m. Friday and made “some progress.”
However, he says the union negotiators didn’t get an offer that they could recommend to the membership.
McCann says that in some ways they are close to an agreement, but in other areas they are “miles apart.”
About 600 employees of the door-to-door transit service for people who can’t navigate the conventional transit system have been on strike since last week, pausing service for all but essential medical trips.
McCann asks HandyDART users to be “patient,” since they are trying to get not only a fair contract for workers but also a better service for customers.
He says it’s unclear when the talks will resume, but he hopes next week at the latest.
The employer, Transdev, didn’t reply to an interview request before publication.
This report by The Canadian Press was first published Sept. 13, 2024.
