Hello,

The Bank of Canada announced another oversized interest rate hike on Wednesday and said that it is “prepared to act more forcefully” if needed to bring inflation back under control.

The central bank’s governing council voted to raise the policy rate by half a percentage point – its third interest rate hike this year. That brings the benchmark rate to 1.5 per cent, just a quarter point below the prepandemic level.

The bank said that more interest rate hikes will be needed to cool Canada’s overheating economy and to slow the pace of consumer price growth, which hit a three-decade high of 6.8 per cent in April.

Economics Reporter Mark Rendell reports here and also offers a Reporter’s Comment on Wednesday’s development: “The Bank of Canada’s 50-basis-point move today was widely expected by analysts and investors. What was striking was the central bank’s hawkish tone. It warned that inflation will likely keep rising in the coming months, led by a jump in oil and food prices, and said that it was “prepared to act more forcefully if needed” to get consumer price growth under control. That’s code for a 75 basis point rate hike, something the bank has not done since the 1970s.

“Whether or not the bank goes for an even larger rate hike at its next meeting in July, it’s clearly signalling that borrowing costs need to keep rising quickly. Higher interest rates won’t do much to deal with international sources of inflation, which include persistent supply-chain bottlenecks, COVID-19 lockdowns in China, and surging commodity prices following Russia’s invasion of Ukraine. But they will dampen demand in Canada’s overheated economy. Keep your eyes on the housing market, which tends to be the most rate-sensitive sector of the economy.”

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TODAY’S HEADLINES

BREAKING – Stéphane Dion has been appointed Canada’s ambassador to France. The former foreign affairs minister for Prime Minister Justin Trudeau has been Canada’s ambassador to Germany and a special envoy to the European Union and Europe since 2017. He will continue his envoy duties. Mr. Dion, who was formerly a leader of the federal Liberal Party, replaces Isabelle Hudon, who was the ambassador to France from 2017 to 2021. The announcement is here.

RESIST HALF MEASURES: ARBOUR – The federal government should resist half-measures and act immediately to implement the latest set of advice to ensure the safety of women in the Canadian Armed Forces, says former Supreme Court justice Louise Arbour. Story here. Meanwhile, The future of Canada’s military colleges is under scrutiny after Ms. Arbour asked, in her review, whether they should remain degree-granting institutions and recommended a review of their operations. Story here.

TIM’S TRACKED CUSTOMERS THROUGH APP – Canada’s largest fast-food chain violated privacy laws by tracking people who used its app, gathering their location data hundreds of times a day – even when the app was not in use. Story here.

HARD DRUGS DECRIMINALIZED IN B.C.; KENNEY CONCERNED – British Columbia will become the first province in Canada to decriminalize possession of small amounts of hard drugs such as illicit fentanyl, heroin, cocaine and methamphetamine after receiving an exemption from Ottawa to federal drug laws. Story here. Meanwhile, Alberta Premier Jason Kenney says here that he has concerns about the federal government’s decision to decriminalize possession of small amounts of illegal drugs in British Columbia.

MENDICINO NOT RULING OUT HANDGUN BANS – Public Safety Minister Marco Mendicino is not ruling out the use of handgun bans to deal with firearms violence, a tool endorsed by several big-city mayors in Canada. Story here.

MPS APPROVE MINOR CHANGE TO LUXURY TAX – Members of Parliament on the House of Commons finance committee approved a minor change to the budget bill’s luxury tax Tuesday related to its implementation date, but voted down more substantial proposals that had been recommended by Canadian businesses in the auto, aviation and boating sectors. Story here.

LEGAULT’S IMMIGRATION POLICY DRAWS IRE – Quebec’s Premier is being accused of stoking fears about newcomers after he gave a recent speech warning Quebec risks turning into Louisiana if the province doesn’t have more control over immigration. Story here. Meanwhile, Bill 96 overhauling the Charter of the French Language, is now the law of the province. Story here from The Montreal Gazette.

TRUDEAU GOVERNMENT HAS USED SECRET ORDERS-IN-COUNCIL – Prime Minister Justin Trudeau’s government has adopted 72 secret orders-in-council – hidden from Parliament and Canadians – since coming to office. Story here from the CBC.

SAUDI ARABIA GETS CANADIAN-MADE MILITARY GOODS DESPITE RUPTURE WITH CANADA – Massive amounts of Canadian-made military goods continue to flow to Saudi Arabia, a new government report shows, despite an unresolved diplomatic rupture between Ottawa and Riyadh as well as criticism of the kingdom’s role in the deadly war in Yemen. Story here.

ALBERTA FINANCE MINISTER ENTERS UCP LEADERSHIP RACE -Travis Toews has resigned as Alberta’s finance minister and launched his campaign in the race to replace Jason Kenney as United Conservative Party leader and premier. Story here.

FIRST FEMALE JUSTICE MINSTER IN SASKATCHEWAN – Saskatchewan has its first female justice minister and attorney-general after Premier Scott Moe shuffled his cabinet this week. Story here.

DONNER PRIZE WINNER NAMED – Munk School professor Dan Breznitz has won this year’s Donner Prize for the best public policy book. Story here.

ONTARIO ELECTION – Ontario NDP Leader Andrea Horwath wouldn’t say if she’ll stay on in her post if she fails to become premier, telling reporters on Tuesday she will wait for voters to make their decision in this week’s election before she makes hers on her political future. Story here. Meanwhile, ONTARIO ELECTION TODAY: The party leaders are making a final push ahead of Thursday’s election. And Vote of Confidence, The Globe’s Ontario election newsletter is here.

CONSERVATIVE LEADERSHIP RACE

CAMPAIGN TRAIL – Scott Aitchison is campaigning across Ontario. Roman Baber holds a rally in Toronto. Jean Charest is in Montreal. Leslyn Lewis is campaigning in the Newfoundland and Labrador communities of Clarenville and St. John’s. Pierre Poilievre was in Saskatchewan on Wednesday, with stops in Moose JawWyburn and Regina. No word on the campaign whereabouts of Patrick Brown.

MEMBERSHIP DEADLINE – It’s worth noting that Friday is the deadline for membership sales in the continuing leadership race. To date, the campaigns have been recruiting new members they presumably hope will support them leading to the Sept. 10 announcement of the new party leader.

BROWN ON CHINA AND CHAREST ON FIREARMS – Conservative leadership candidate Patrick Brown says he believes Canada can advance its trade relationship with China while at the same time take a stand against its human rights abuses. Story here. Meanwhile, rival Jean Charest promised Tuesday to subject a national ban on so-called assault-style firearms to a classification review by a panel of experts. Story here.

THIS AND THAT

TODAY IN THE COMMONS – Projected Order of Business at the House of Commons, June. 1, accessible here.

CHRETIEN LEFT IN THE DARK – Not even ex-prime ministers are immune from the lack of household power that has been a reality in the Ottawa region since a devastating storm on May 21 that hammered Ontario and Quebec. Tens of thousands were left in the dark as a result of the storm. Ottawa Bureau Chief Robert Fife ran into Jean Chrétien in downtown Ottawa on Wednesday. Canada’s prime minister from 1993 to 2003, said that he hasn’t had power at his Ottawa home since the storm so is staying in a downtown hotel. Hydro Ottawa has described the impact of the storm as being worse than both the ice storm of 1998 and tornadoes of 2018. As of Wednesday, Hydro Ottawa says 1,100 customers are still without power. One of them is Canada’s 20th prime minister.

PAGES PERFORMANCE – For the first time since 2019, the House of Commons Pages had an opportunity on Wednesday to sing O’Canada in the House of Commons chamber. They sang from the Speaker’s Gallery reserved for guests of the speaker. It’s a tradition for the Pages to sing the national anthem on the first Wednesday in June, but they have been unable to do so since 2019 because of the pandemic. Pages are first-year students attending one of three postsecondary institutions in the Ottawa region that work in the Commons chamber and Parliament Hill providing support services to MPs such as delivering notes among MPs, or from the Speaker to MPs, delivering documents and providing water. Each year, 40 students are selected as Pages from across Canada.

JOLY MEETS BALTIC COUNTERPARTS – Foreign Affairs Minister Mélanie Joly is meeting with her Baltic Region counterparts in Quebec City on Thursday. Ms. Joly will be holding talks with Estonia’s Foreign Affairs Minister Eva-Maria Liimets, Lithuania’s Foreign Affairs Minister Gabrielius Landsbergis and Zanda Kalniņa-Lukaševica, Latvia’s Parliamentary Secretary of the Ministry of Foreign Affairs. The agenda includes discussions on co-ordinated efforts in light of Russia’s invasion of Ukraine, a joint news conference, and the ministers, joined by Defence Minister Anita Anand, touring Canadian Forces Base Valcartier.

ROTA RETURNS TO SPEAKERS CHAIR – Anthony Rota, the Speaker of the House of Commons, returned to his regular chair Tuesday after being away for more than two months because of heart surgery. “It’s great to see you all again and it is great to be back. Please don’t let me regret saying that,” the Nipissing MP told the House. “While I was away, I just want to thank you all for the texts. the calls, the e-mails, the fruit baskets, the flowers, the plants. It really made the time go faster knowing that someone was thinking of me and that is something I really do appreciate from each and every one of you.”

NO INTEREST – “We’re just not interested in her opinion.” – Foreign Affairs Minister Mélanie Joly, commenting on Parliament Hill on Wednesday, on claims by Republican Congresswoman Marjorie Taylor Greene of Georgia that Canada’s new gun control could allow for a Russian invasion.

NEW CP ECONOMICS REPORTER – Nojoud Al Mallees, who has been a reporter and producer at CBC’s business unit based in Toronto, is joining the Ottawa Bureau of The Canadian Press as an economics reporter, starting on July. 4.

MP WITH COVID-19 – Stéphane Bergeron, the Bloc Québécois MP for the South Shore riding Montarville, has tested positive for COVID-19 with a rapid test, and placed himself in isolation.

THE DECIBEL

On Wednesday’s edition of The Globe and Mail podcast, following the announcement that the Liberal government plans to retable the Canada Disability Benefit before the end of June, Michelle Hewitt, the co-chair of Disability with Poverty, explains what supports are currently available to disabled Canadians, why this benefit is needed now, and the importance of including disabled voices in its creation. The Decibel is here

PRIME MINISTER’S DAY

The Prime Minister attended private meetings, and was scheduled to attend the Liberal caucus meeting, Question Period, and a flag-raising ceremony on Parliament Hill for Pride Month.

LEADERS

NDP Leader Jagmeet Singh attended the NDP caucus meeting, was scheduled to hold a news conference with B.C. MP Gord Johns on a health-based approach to substance use and participate in Question Period.

PUBLIC OPINION

ONTARIANS SUPPORT HANDGUN BAN: POLL – A large majority of Ontarians support a ban on handguns, according to a new election poll released Tuesday, just a day after the federal government tabled new gun-control legislation. Story here.

OPINION

The Globe and Mail Editorial Board on why it’s time for a ban on the sale of handguns: “Canadians own 1.1 million legal handguns. That’s three times as many as just a decade and a half ago. New sales in recent years have been running at an average of 55,000 annually. As this page has repeatedly pointed out, none of the above makes any sense. Hunting is a legal activity practised by millions of Canadians, but handguns aren’t legal as hunting tools, in part because they’re highly ineffective hunting tools. They’re too inaccurate to be useful for much besides shooting other human beings at close range. Their main value is as concealed weapons, and carrying a concealed weapon is, of course, illegal in Canada. So while many Canadians have good reasons for owning a hunting rifle, almost nobody has a good reason for owning a handgun.”

Andrew Coyne (The Globe and Mail) on how we can no more force a prisoner to serve 150 years than we can execute him six times: “The ruling affects a tiny sliver of the prison population – perhaps a dozen cases, total. It remains open to the government to rewrite the law, within the limits set out by the court. Even if you disagree with the ruling, then, it clearly implies no emergency or crisis. The public is not one whit less safe after the ruling than it was before. And yet several candidates for Conservative leader – Pierre Poilievre, Patrick Brown, and Jean Charest – reacted with a vow to invoke the notwithstanding clause: the first time any federal government would have done so, were anyone to hold them to it. Has it come to this?”

Elaine Craig (Contributed to The Globe and Mail) on why are Canadian police chiefs refusing to accept military sexual assaults cases: “Imagine that police forces across Canada got to pick and choose which criminal offences they would be willing to investigate. This would seem unconscionable. And yet, when it comes to alleged sexual assaults by members of the Canadian military, some police chiefs in Canada apparently believe they do have that choice.”

Tom Mulcair (CTV) on Prime Minister Justin Trudeau sleepwalking us all toward making Quebec a de facto separate state: “[Quebec Premier Francois] Legault is getting a free pass. His desire for full jurisdiction over language, culture and immigration is being met with a whimper by Justin Trudeau and his hapless Attorney-General, David Lametti. They both know that this is a battle that Legault wants with Ottawa. Unfortunately for all of us, Trudeau is so terrified of Legault, that Ottawa is left play acting. Don’t expect to see the same thing we saw after previous attacks on minority language rights: a strong federal government doing its job. Trudeau and Lametti are hiding under their desks.”

Paul Wells (TVO) on how the Ontario election could have used more political polarization: “The biggest surprise of 2022 has been how many voters don’t mind having Doug Ford as premier. I think I’m reading the mood of this crucial Don’t Mind Doug voting bloc correctly: they don’t go to bed at night thanking the stars that Ford watches over them. But neither are they prepared to do anything untoward, to break a sweat or chip a nail to be done with him. This will be hard for some people I know to comprehend.”

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