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Stock market news live updates: Stocks stage comeback day after Powell hints at more aggressive rate hikes – Yahoo Canada Finance

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U.S. stocks rebounded to close firmly higher Tuesday as investors shrugged off hawkish remarks from Federal Reserve Chair Jerome Powell and continued to monitor the war in Ukraine.

[Click here to read what’s moving markets heading into Wednesday, March 23]

The S&P 500 rose 1.1% to 4,511.81, and Dow Jones Industrial Average jumped more than 250 points, or about 0.7%, to 34,807.86. The Nasdaq Composite was up nearly 2% to 14,108.82. The moves come on the back of a choppy session Monday that saw all three indexes cap last week’s winning streak to close lower after Powell signaled the central bank was prepared to act more aggressively to rein in inflation. Meanwhile, the 10-year U.S. Treasury climbed to yield 2.372%.

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The Fed’s top leader reiterated in comments at the National Association for Business Economics Monday that policymakers will lean into higher short-term interest rates “as needed” to mitigate fast-rising price levels, with a goal of bringing inflation back down to an annual pace of about 2% while maintaining low unemployment.

“We just experienced the first rate increase over which it promises to be many, many more,” Research Affiliates CEO Chris Brightman told Yahoo Finance Live on Tuesday. “Whether there is a 50 bps or a 25 bps increase next is not the point so much as that we’re going to see continued tightening all through this year and likely into at least the first half of 2023 — and where it stops, nobody knows, including the Fed.”

The tightening could bring the yield curve, the relationship between short- and long-term interest rates of fixed-income securities issued by the U.S. Treasury, closer to inverting, Brightman pointed out. An inverted yield curve, when the short-term rates exceed the long-term rates, has been a signal of a pending economic recession in the past.

The Fed is “going to tighten until something breaks,” Robert Schein, chief investment officer at Blanke Schein Wealth Management, told Yahoo Finance Live on Monday. “That’s either breaking the back of inflation or growth is going to slow.”

Powell’s comments come just a week after investors met the central bank’s long-anticipated move to lift its benchmark Federal Funds Rate by 0.25% (to a target range of 0.25% to 0.50%) with temporary relief after the bump came in on par with what market participants had expected.

Despite providing some clarity to traders who for months have waited for the Fed to take steps forward on tightening monetary conditions, geopolitical turmoil in Eastern Europe and its economic toll continue to muddy the bank’s path ahead in fighting inflation. The Fed is also tasked with beginning quantitative tightening, or rolling assets off its nearly $9 trillion balance sheet.

The CPI print is “not going to look kind,” Allianz Investment Management’s head of ETFs Johan Grahn told Yahoo Finance Live. “That will be the indicator that the Fed is going to hang their hat on.”

Elsewhere in markets, Tesla was in the spotlight on Tuesday as shares of the electric vehicle giant soared amid the opening of its Berlin Gigafactory and delivery of the first 30 Model Y cars made in Europe.

Shares of Tesla were up 7.9% to $993.98 a piece, notching the biggest pop in three weeks.

Russia’s war in Ukraine also continued to be front-and-center for investors. Kyiv has refused to surrender its heavily-attacked port city of Mariupol to Russian forces as the civilian death toll climbed. Energy and commodity prices spiked amid the latest developments on the crisis.

Officials in both countries have sporadically signaled a possible negotiation but attempts at talks have so far proven unsuccessful. Ukrainian President Volodymyr Zelenskyy warned recently that if discussions with Vladimir Putin failed, it could mean the start of a third world war.

4:00 p.m. ET: All three main indexes stage comeback as Wall Street shrugs off Fed comments

Here’s how Wall Street closed out Tuesday’s trading session:

  • S&P 500 (^GSPC): +50.63 (+1.13%) to 4,511.81

  • Dow (^DJI): +254.87 (+0.74%) to 34,807.86

  • Nasdaq (^IXIC): +270.36 (+1.95%) to 14,108.82

  • Crude (CL=F): -$0.82 (-0.73%) to $111.30 a barrel

  • Gold (GC=F): -$8.20 (-0.42%) to $1,921.30 per ounce

  • 10-year Treasury (^TNX): +5.8 bps to yield 2.3730%

2:44 p.m. ET: Tesla gains on opening of Berlin Gigafactory, delivery of first Model Ys made in Europe

Tesla (TSLA) delivered the first 30 Model Y electric vehicles made at its newly-opened Berlin Gigafactory, its first plant in Europe.

Shares of Tesla were up 6.3% to $979.04 a piece as of 2:43 p.m. ET, notching the biggest pop in three weeks.

The factory is expected to eventually produce 500,000 vehicles annually and employ 12,000 workers. The first Model Ys rolling off the new location will be the performance variant, costing 63,990 euros ($70,500) with a 514 km (320 miles) range. New orders from the plant start delivery in April, Tesla said.

“We view the opening of Giga Berlin as one of the biggest strategic endeavors for Tesla over the last decade and should further vault its market share within Europe over the coming years as more consumers aggressively head down the EV path,” Wedbush analyst Dan Ives said. “We cannot stress the production importance of Giga Berlin to the overall success of Tesla’s footprint in Europe and globally.”

1:55 p.m. ET: Meme-stock favorite GameStop stages biggest rally of 2022

Shares of GameStop (GME) surged as much as 29%, the most intraday since Aug. 24 amid an uptick in mentions of the meme stock on retail-focused platforms such as Reddit and Stocktwits.

The video game retailer was on pace for its sixth straight gain, which would mark the longest winning streak since May, according to Bloomberg data. The stock is trading above its 50-day moving average — a level it has not closed above in nearly four months

Meanwhile, short interest in the stock has surpassed 20% of float this week for the first time since June 2021, according to data from S3 Partners.

1:49 p.m. ET: French oil and gas giant TotalEnergies to exit Russian market

French oil major TotalEnergies further self-sanctioned Russian crude and refined oil products, announcing it will terminate all long-term contracts with Russia as soon as possible, and not later than end of 2022.

“Given the Worsening situation in Ukraine and the existence of alternative sources for supplying Europe, TotalEnergies has unilaterally decided to no longer enter into or renew contracts to purchase Russian oil and petroleum products, in order to halt all its purchases of Russian oil and petroleum products as soon as possible and by the end of 2022 the latest,” the French multinational oil and gas company said Tuesday.

The move comes following pressure on TotalEnergies after it stayed hanging onto its Russian investments during a mass exodus of western oil majors after Russia’s invasion of Ukraine even though no sanctions have forced such divestments.

11:45 a.m. ET: Stocks rebound after closing lower in previous session

Here were the main moves in markets as of 11:45 a.m. ET:

  • S&P 500 (^GSPC): +43.05 (+0.96%) to 4,504.23

  • Dow (^DJI): +198.75 (+0.58%) to 34,751.74

  • Nasdaq (^IXIC): +255.43 (+1.85%) to 14,093.89

  • Crude (CL=F): -$2.47 (-2.20%) to $109.65 a barrel

  • Gold (GC=F): -$17.10 (-0.89%) to $1,912.40 per ounce

  • 10-year Treasury (^TNX): +6.4 bps to yield 2.3790%

10:45 a.m. ET: Japanese crypto exchange to list on Nasdaq in $1 billion SPAC merger

Japanese cryptocurrency exchange Coincheck Inc. announced it will go public in the United States by merging with blank-check firm Thunder Bridge Capital Partners IV Inc. in a deal valued at $1.25 billion.

The transaction is expected to result in proceeds of $237 million to the combined company from the cash held in the special-purpose acquisition company’s (SPAC) trust, assuming there are no redemptions.

Coincheck, based in Tokyo, is a marketplace for buying and selling cryptocurrencies and an exchange for digital assets such as non-fungible tokens. The company has about 1.5 million customers.

PARIS, FRANCE - FEBRUARY 16:  In this photo illustration, Bitcoin course's graph is seen on the Coincheck cryptocurrency exchange application on February 16, 2018 in Paris, France. Victims of one of the world's largest cryptocurrency hacks are suing Coincheck, the Japanese company whose network was breached in a theft worth more than dollars 650 millions. Coincheck is a bitcoin wallet and exchange service headquartered in Tokyo, Japan, founded by Koichiro Wada and Yusuke Otsuka. It operates exchanges between bitcoin/ether and fiat currencies in Japan, and bitcoin transactions and storage in some countries worldwide.  (Photo Illustration by Chesnot/Getty Images)PARIS, FRANCE - FEBRUARY 16:  In this photo illustration, Bitcoin course's graph is seen on the Coincheck cryptocurrency exchange application on February 16, 2018 in Paris, France. Victims of one of the world's largest cryptocurrency hacks are suing Coincheck, the Japanese company whose network was breached in a theft worth more than dollars 650 millions. Coincheck is a bitcoin wallet and exchange service headquartered in Tokyo, Japan, founded by Koichiro Wada and Yusuke Otsuka. It operates exchanges between bitcoin/ether and fiat currencies in Japan, and bitcoin transactions and storage in some countries worldwide.  (Photo Illustration by Chesnot/Getty Images)

PARIS, FRANCE – FEBRUARY 16: In this photo illustration, Bitcoin course’s graph is seen on the Coincheck cryptocurrency exchange application on February 16, 2018 in Paris, France. Victims of one of the world’s largest cryptocurrency hacks are suing Coincheck, the Japanese company whose network was breached in a theft worth more than dollars 650 millions. Coincheck is a bitcoin wallet and exchange service headquartered in Tokyo, Japan, founded by Koichiro Wada and Yusuke Otsuka. It operates exchanges between bitcoin/ether and fiat currencies in Japan, and bitcoin transactions and storage in some countries worldwide. (Photo Illustration by Chesnot/Getty Images)

9:52 a.m. ET: Carnival Cruise sales miss on COVID-hit demand

Carnival Corp. (CCL) reported quarterly revenue that fell below Wall Street estimates as a rise in COVID-19 infections due to the Omicron variant put a dent in demand for cruise vacations during the period.

The cruise line operator said in the first quarter of 2022 it experienced an impact on bookings for its near-term sailings, including higher cancellation rates attributed to an increase in pre-travel positive test results as the Omicron wave took its course.

In December and January, several cases of infections were identified on ships owned by Carnival.

The company reported a net loss that narrowed to $1.89 billion, or $1.66 per share, in the quarter ended Feb. 28, from $1.97 billion, or $1.80 per share, a year earlier. Bloomberg consensus data showed analysts projected a loss of $1.23 per share.

9:30 a.m. ET: Stocks open higher as investors continue to weigh Fed inflation comments

Here’s how stocks opened at the start of Tuesday’s trading session:

  • S&P 500 (^GSPC): +15.12 (+0.34%) to 4,476.30

  • Dow (^DJI): +194.36 (+0.56%) to 34,747.35

  • Nasdaq (^IXIC): +22.26 (+0.16%) to 13,860.72

  • Crude (CL=F): +$0.32 (+0.29%) to $112.44 a barrel

  • Gold (GC=F): -$3.80 (-0.20%) to $1,925.70 per ounce

  • 10-year Treasury (^TNX): +5.7 bps to yield 2.3720%

7:23 a.m. ET: Bitcoin hits $42,000 as hedge fund Bridgewater plans foray into crypto

Bitcoin (BTC-USD) topped the $42,000 mark following news Ray Dalio’s Bridgewater Associates, the world’s biggest hedge fund, is set to invest in the digital asset.

The coin’s price jumped 3.7% to $42,888.33 Tuesday morning as of 7:20 a.m. ET.

Ethereum (ETH-USD) also gained on the news, rising 3.7% to $3,022.01 as of early Tuesday. The cryptocurrency advanced 16.5% in a week to $3,020 after its co-founder Vitalik Buterin appeared on the front cover of Time magazine.

Bridgewater’s plan to invest in bitcoin underscores the faith institutional finance has in a long-term upward trajectory for the cryptocurrency. The hedge fund is one of several professional investment management firms adding bitcoin to their investment portfolios.

Ray Dalio, Bridgewater's Co-Chairman and Co-Chief Investment Officer speaks during the Skybridge Capital SALT New York 2021 conference in New York City, U.S., September 15, 2021.  REUTERS/Brendan McDermidRay Dalio, Bridgewater's Co-Chairman and Co-Chief Investment Officer speaks during the Skybridge Capital SALT New York 2021 conference in New York City, U.S., September 15, 2021.  REUTERS/Brendan McDermid

Ray Dalio, Bridgewater’s Co-Chairman and Co-Chief Investment Officer speaks during the Skybridge Capital SALT New York 2021 conference in New York City, U.S., September 15, 2021. REUTERS/Brendan McDermid

7:00 a.m. ET: Contracts on S&P 500, Dow, and Nasdaq edge higher after Powell remarks

Here were the main moves in markets ahead of Tuesday’s open:

  • S&P 500 futures (ES=F): +16.00 points (+0.36%) to 4,468.25

  • Dow futures (YM=F): +169.00 points (+0.49%) to 34,605.00

  • Nasdaq futures (NQ=F): +46.25 point (+0.32%) to 14,416.75

  • Crude (CL=F): -$0.62(-0.55%) to $111.50 a barrel

  • Gold (GC=F): -$1.90 (-10.00%) to $1,927.60 per ounce

  • 10-year Treasury (^TNX): +0.00 bps to yield 2.315%

6:00 p.m. ET Monday: Stock futures tick slightly higher after indexes snap winning streak

Here’s where markets were trading heading into the overnight session Monday:

  • S&P 500 futures (ES=F): +4.00 points (+0.09%) to 4,456.25

  • Dow futures (YM=F): +47.00 points (+0.14%) to 34,483.00

  • Nasdaq futures (NQ=F): +16.75 point (+0.12%) to 14,387.25

  • Crude (CL=F): +$0.78 (+0.70%) to $112.90 a barrel

  • Gold (GC=F): +$6.80 (+0.35%) to $1,936.30 per ounce

  • 10-year Treasury (^TNX): +4.3 bps to yield 2.191%

NEW YORK, NEW YORK - MARCH 16: Traders work on the floor of the New York Stock Exchange (NYSE) on March 16, 2022 in New York City. The Dow started off the day in positive territory, extending yesterday's rally.  (Photo by Spencer Platt/Getty Images)NEW YORK, NEW YORK - MARCH 16: Traders work on the floor of the New York Stock Exchange (NYSE) on March 16, 2022 in New York City. The Dow started off the day in positive territory, extending yesterday's rally.  (Photo by Spencer Platt/Getty Images)

NEW YORK, NEW YORK – MARCH 16: Traders work on the floor of the New York Stock Exchange (NYSE) on March 16, 2022 in New York City. The Dow started off the day in positive territory, extending yesterday’s rally. (Photo by Spencer Platt/Getty Images)

Alexandra Semenova is a reporter for Yahoo Finance. Follow her on Twitter @alexandraandnyc

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What’s open and closed Good Friday, Easter Monday in Hamilton, Burlington and Niagara Region – Global News

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The Easter long weekend is upon us, bringing a rare four-day holiday to some in the Hamilton area. Several businesses and services will be closed on Good Friday (March 29), Easter Sunday (March 31) or Easter Monday (April 1).

Here’s a list of some things that will or will not be operating in Hamilton, Burlington and Niagara Region.

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Administrative offices: Offices are closed on Friday and Monday.

Licensing and bylaw services: Licensing and bylaw phone queue line will be closed on Friday and Monday. Service will resume on Tuesday.

Green bin, garbage and recycling: No collection on Good Friday. Friday’s pickup will occur on Saturday (March 31). Monday will be a regular collection day (April 1). The city says all materials must be at the curb by 7 a.m. Community recycling centres and transfer stations will be closed Friday and Monday.

HSR bus: Buses will operate on a Sunday/holiday schedule Friday and a regular schedule on Monday.

GO Transit: Trains and buses are operating on a Sunday schedule Friday.

ATS DARTS: Service will be operating with holiday service hours on Friday and Monday. Subscription trips on DARTS, with the exception of dialysis, are cancelled for Friday and Monday. ATS customer service will also be closed on Friday and Monday.

Ontario Works: The program, including the special supports, will be closed Friday and Monday. Phone service will resume on Tuesday.

Recreation centres: Closed on Friday and Monday.

Hamilton civic museums: Dundurn National Historic Site, the Hamilton Military Museum and the Hamilton Museum of Steam and Technology will be closed on Friday and Monday.

Tourism Hamilton visitor information centre: Closed Friday to Monday.

Hamilton Public Library: All HPL branches are closed on Good Friday, Easter Sunday and Easter Monday. Branches are open on Saturday and regular hours resume Tuesday, April 2

Social services: All Ontario Works offices, special supports and the housing services office will be closed on Friday and Monday.

Senior centres: Closed Friday and Sunday. Senior clubs will be running modified program schedules from Friday to Monday.

Arenas: Closed to public programming Friday, Sunday and Monday.

Animal services: Closed Good Friday, Sunday and Easter Monday.

Canadian Warplane Heritage Museum in Mount Hope: Open Good Friday, Saturday and Easter Sunday. Closed Easter Monday.

Burlington

Government offices: Local government such as city hall, municipal offices and facilities will be closed on Good Friday and Easter Monday.


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Administrative services: Services including parks, roads and forestry will be closed on Friday and Monday. Only snow removal and urgent services will be provided.

Animal Shelter and Control: Closed all weekend, Friday through Monday. Emergencies can be called in to 905-335-7777.

Recreation centres: Some city pools, arenas and community centres will be operational on a limited schedule. Visit burlington.ca/dropinandplay for details. Some outdoor recreation facilities will also be open, weather permitting. Visit burlington.ca/outdoorplay for more information. Tyandaga Golf Course will be closed. The tentative season opener is set for April 6.

Halton Provincial Offences Court: Closed on Friday and Monday.

Free parking: Available Friday and Monday in the downtown core in municipal lots, on-street and in the parking garage, however, the Waterfront parking lots (east and west) do not provide free parking on statutory holidays. Parking exemptions are required to park overnight on city streets and for longer than five hours. Visit burlington.ca/parkingexemptions for more.

Burlington Transit: Transit will operate a holiday schedule Sunday. The downtown transit terminal, specialized dispatch and the administration office will be closed on March 29. Monday is a regular schedule.

Niagara Region

Government offices: City halls, the Enterprise Centre and administration offices are all closed on Good Friday. Some offices, like St. Catharines, will reopen on Easter Monday.

Parks, recreation and culture services: All City recreation centres are closed on Good Friday and Easter Sunday. Administration offices are all closed on Friday. Some will be closed on Monday. St. Catharines Kiwanis Aquatics Centre is closed Friday, but open on Saturday. Seymour-Hannah Sports and Entertainment Centre is closed Friday, but open regular hours through the weekend and Monday.

Community centres: All older adult centres and arenas will either be closed or have reduced hours on Friday, Sunday and Monday.

St. Catharines Museum; Welland Canals Centre: Both facilities will be closed on Good Friday but open the rest of the long weekend between 9 a.m. to 5 p.m.

Niagara Regional Transit: Both St. Catharines and Niagara Falls buses will operate on a holiday schedule for Good Friday. Regional, Fort Erie and Welland service will not be running Friday. The agency will have regular hours on Easter Sunday and Monday.

Canada Post: No collection or mail delivery on Monday. Most post offices operated by the private sector will also be closed during business hours.

Grocery stores: Major grocery stores like Fortinos, Metro, FreshCo and No Frills will be closed on Good Friday and Easter Sunday.

Shoppers Drug Mart: Some locations in the city will be open on Good Friday and Easter Sunday, but not all. Holiday hours can be seen on the Shoppers store locator map.

Rexall: Some outlets are open on a holiday schedule, but not all. Visit the Rexall website for store hours.

Malls: All major shopping centres in Hamilton, Burlington, St. Catharines and Niagara Falls will be closed on Good Friday. Exceptions include:

  • Outlet Collection at Niagara Falls: Open from 10 a.m. to 6 p.m.
  • CF Toronto Eaton Centre: Open noon to 7 p.m.
  • Toronto Premium Outlets in Halton Hills: Open Friday from 9:30 a.m. to 7 p.m. and Sunday from 11 a.m. to 7 p.m.
  • Pacific Mall in Toronto: Open between 11 a.m. and 7 p.m.
  • Vaughan Mills will be open from 11 a.m. to 7 p.m.

In Toronto, retailers in designated tourist areas such as Yorkville, downtown Yonge, Queen’s Quay West and the Distillery District can stay open Good Friday, according to City of Toronto bylaws.

Walmart: All Walmarts in the GTHA will be closed Good Friday and Easter Sunday except the Niagara Falls Supercentre on Oakwood Drive, which is open between 7 a.m. and 11 p.m. on those days.

Alcohol

The Beer Store: All stores will be closed Good Friday and Easter Sunday.

LCBO: All stores will be closed Good Friday and Easter Sunday.

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Wine Rack: Most Hamilton locations will be closed on Good Friday and Easter Monday except for the Wilson Street West location in Ancaster and the Guelph Line outlet in Burlington.

Wilson Street will be open Noon to 5 p.m. on Good Friday and 11 a.m. to 6 p.m. on Easter Sunday. Guelph Line will open 10 a.m. to 6 p.m. on Friday and Sunday.

Tourist destinations

Niagara Falls: Some Niagara Falls attractions are closed during the early spring, including the Whirlpool Aero Car and Wildplay Whirlpool Adventure Course, and the White Water Walk.

However, some, like the Niagara City Cruises, Journey Behind the Falls, Niagara Falls History Museum and The Exchange, and the Niagara Power Station are open and will be operating on Good Friday and Easter Sunday. Hours of operation can be seen on the Niagara Parks website.

The Butterfly Conservatory will be open on Good Friday and Easter Sunday between 10 a.m. and 6 p.m.

Toronto: Most Toronto attractions are either closed or have adjusted hours on Good Friday and Easter Sunday.

  • The Hockey Hall of Fame will be open from 10 a.m. to 5 p.m.
  • The Toronto Zoo will be open from 9:30 a.m. to 6 p.m.
  • The Ontario Science Centre will be open from 10 a.m. to 5 p.m.
  • Ripley’s Aquarium will be open from 9 a.m. to 11 p.m.
  • The Art Gallery of Ontario will be open from 10:30 a.m. to 4:30 p.m.
  • The Royal Ontario Museum will be open from 10 a.m. to 5:30 p.m.
  • The Aga Khan Museum will be open from 10 a.m. to 5:30 p.m.

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CRA pausing new 'bare trust' reporting requirement just days before filing deadline – CBC News

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The Canada Revenue Agency (CRA) is hitting pause on a new “bare trust” reporting requirement with just a few days remaining before the deadline.

New reporting requirements for such trust arrangements were introduced for the 2024 tax season. Anyone with a bare trust was required to file a T3 tax return form naming the trustees, beneficiaries and settlors of each trust by April 2.

But on Thursday — with four days before the deadline to file — the CRA announced that it would be pausing the reporting measures.

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“In recognition that the new reporting requirements for bare trusts have had an unintended impact on Canadians, the Canada Revenue Agency will not require bare trusts to file a T3 … for the 2023 tax year, unless the CRA makes a direct request for these filings,” a statement released by the tax agency said.

John Oakey, a vice president with the Chartered Professional Accountants of Canada, said the government hasn’t done a great job of communicating the changes.

“There’s no advertising from the government saying these are coming. You don’t see an ad on the television. You don’t see ads in magazines,” he said.

“The only way that individuals are really finding out is from advisers, financial institutions … people that are already aware of these rules.”

No definition of ‘bare trust’ in Income Tax Act

There is no definition of a bare trust in the Income Tax Act. The CRA defines a bare trust as “arrangement under which the trustee can reasonably be considered to act as agent for all the beneficiaries under the trust with respect to all dealings with all of the trust’s property.”

Unlike express trusts, where people seek out a lawyer to create a trust, bare trusts can happen almost accidentally — when a parent cosigns a mortgage for a child and becomes partial owner, or when an aging parent puts their kids down as partial owners of their house in anticipation of an impending death.

Oakey said a bare trust could also be something as simple as a shared bank account.

“If I put my name on [my parents’] bank account in order to help them pay their bills, that creates a trust relationship,” he said.

“I have no real control over the asset. I still have to adhere to their wishes. All I’m doing is acting as an agent on their behalf to do whatever they want me to do.”

In those cases, the bare trust does not earn any money for the trustee to report in a given tax year.

Even though Canadians wouldn’t have been taxed on a trust’s value, failure to report being a member of a bare trust could have resulted in a fine of $2,500, or five per cent of the value of all property in the trust, whichever is higher.

The requirement was meant as a way to crack down on tax avoidance. Corporations and wealthy individuals sometimes hold properties in bare trusts so they can avoid paying property transfer taxes. Oakey said the move was also likely an effort to crack down on money laundering.

The CRA said it would be working to “to further clarify its guidance on this filing requirement” over the coming months.

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Economy grows more than expected, keeping the Bank of Canada 'on its toes' – Financial Post

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January GDP strongest monthly growth in a year

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The Canadian economy surprised to the upside in January, posting its strongest monthly growth in a year, which could keep the Bank of Canada “on its toes,” say economists.

Real gross domestic product (GDP), which measures the value of goods and services produced during a specific time frame, edged up by 0.6 per cent in January, according to Statistics Canada, beating analysts’ expectations of 0.4 per cent. The agency also expects a 0.4 per cent rise in GDP during February.

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“To put that two-month flurry of growth into perspective, the combined one per cent gain is as much as the economy grew in the entire 12 months of 2023,” Bank of Montreal chief economist Douglas Porter said in a note. “After a prolonged lull through much of last year … the economy looks to have caught some strong tailwinds early this year.”

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The rise in GDP was due to broad-based growth in 18 of the 20 sectors measured by Statistics Canada.

The public sector, which includes education, health care and social assistance and public administration, increased 1.9 per cent in January, following two consecutive monthly declines. Education, which grew by six per cent, was the largest contributor to the country’s growth as activity rebounded from strikes by public sector workers in Quebec late last year.

Manufacturing fully recouped December’s decline in growth with a 0.9 per cent rise in January. A sudden drop in temperature in mid-January in parts of Canada contributed to increased activity in the utilities sector, which rose by 3.2 per cent, its highest growth rate since January 2022.

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The real estate and rental sector grew for a third consecutive month — by 0.4 per cent — on higher resale activity. The Greater Toronto Area, Hamilton-Burlington and most markets in Ontario’s Greater Golden Horseshoe contributed to the growth.

The information and cultural services sector, which includes the motion picture and sound recording industry, also grew for the third consecutive month, as activity continued to ramp up following the end of a strike by the Screen Actors Guild – American Federation of Television and Radio Artists in November.

These “robust” figures could pose a difficult challenge for the Bank of Canada, Toronto-Dominion Bank economist Marc Ercolao said in a note.

While the central bank has received “solid evidence” in the past two months that inflation is cooperating, “strong GDP data prints” such as today’s will “keep them on their toes,” said Ercolao, who expects the first interest rate cut to take place in July.

On the labour front, Statistics Canada said there were 632,100 job vacancies in January, down 34,800, or 5.2 per cent, from November. Vacancies in the manufacturing sector declined by 10.2 per cent to 37,500, the lowest level since September 2017.

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Monthly payroll increases were recorded in 13 of 20 sectors, led by retail trade, manufacturing and finance. But these gains were offset by a 0.3 per cent decline in construction.

The number of employees receiving pay and benefits from their employers, as measured by payroll employment, rose for the first time in the retail trade after four consecutive monthly declines.

Despite the strong start to the year, some economists expressed caution, especially regarding February’s GDP estimate.

Claire Fan, an economist at the Royal Bank of Canada, said the “substantially stronger-than-expected” numbers are partially driven by one-off factors such as the ending of the Quebec teachers’ strike, so growth isn’t likely to be sustained in the coming months.

“We’ve learned to take the advance estimates (February) with a grain of salt as they have been highly revision prone,” she said, while retaining RBC’s assessment of a weak economic backdrop.

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BMO’s Porter said Canada experienced something similar last year when GDP stalled after a strong start to the year.

“There could be a serious issue with seasonality here, especially in light of much milder winters recently,” he said.

Despite the increase in GDP, most economists have stuck to their previous predictions that June will be when the Bank of Canada issues its initial interest rate cut.

• Email: nkarim@postmedia.com

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