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OTTAWA – The Bank of Canada considered cutting its key interest rate by just a quarter of a percentage point last month, but opted to take a larger step in the face of a weakening economy and falling inflation.

That’s according to the central bank’s summary of deliberations released Tuesday, which details the governing council’s conversations ahead of the Oct. 23 interest rate announcement.

The Bank of Canada ultimately opted for a half-percentage point interest rate cut, bringing its policy rate to 3.75 per cent.

“A number of factors were mentioned to support this decision. Members felt increasingly confident that the upside pressures on inflation will continue to decline, so policy did not need to be as restrictive.” the summary said.

“Further, members felt that a larger step was appropriate given the ongoing softness in the labour market and the need for stronger economic growth to absorb excess supply.”

Canada’s inflation rate had fallen to 1.6 per cent in September, while the unemployment rate was sitting at 6.5 per cent.

The summary says some governing council members were concerned a half-percentage point cut could be interpreted as a sign of economic trouble and therefore stir up expectations for more outsized interest rate reductions.

“Governing council members wanted to convey that a larger step was appropriate given the economic data seen since July. At the same time, they continued to expect the economy to grow and inflation to remain close to target,” the summary said.

It also reiterates that the Bank of Canada plans to take interest rate decisions one at a time based on how the economy and inflation evolve.

The central bank’s next interest rate announcement is scheduled for Dec. 11.

This report by The Canadian Press was first published Nov. 5, 2024.

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Business groups say the work stoppage at B.C. ports is the latest in a run of supply chain disruptions affecting Canadian companies and the country’s economy.

Employers at most of the province’s ports locked out their workers Monday in a dispute involving roughly 700 unionized foremen. The workers represented by the International Longshore and Warehouse Union Local 514 have been without a contract since March 2023.

The disruption comes less than a year and a half after a 13-day strike by different workers at most B.C. port terminals and just a few months after a countrywide work stoppage at Canada’s two biggest railways.

The Canadian Chamber of Commerce said Monday that significant labour disruptions are becoming too common and tarnish Canada’s reputation as a reliable trading partner.

“Not long ago, shutting down our West Coast ports two years in a row would have seemed unthinkable,” said the Chamber’s senior director of transportation, infrastructure and construction Pascal Chan in a statement.

“The resulting damage to trade and our economy is another blow to Canadian workers and businesses.”

Greater Vancouver Board of Trade president Bridgitte Anderson said the shutdown will disrupt $800 million in goods every day, warning it could put upward pressure on inflation.

“The Port of Vancouver is far and away the most significant port that we have in Canada,” said Fraser Johnson, a professor of operations management at the Ivey Business School at the University of Western Ontario.

He said the port handles about 45 per cent of the total volume of Canada’s ports, with the next largest being Montreal at about 10 per cent.

“I think a lot of people tend to focus on what’s coming into the country in terms of consumer goods, automobiles, electronics, especially this time of the year, when we’re coming up to the holiday season,” said Johnson.

“But there’s a lot of stuff that gets exported out of Canada. So lumber, commodities like coal, for example, iron ore, all get shipped out of Canada via our West Coast ports.”

Johnson said the longer the port stoppage goes on, the harder businesses’ bottom lines and the economy will be hit.

If it goes on for several weeks, consumers could start to see more of an impact as well, he said.

The 2023 B.C. port strike cost manufacturers an average of $207,000 per day, Canadian Manufacturers and Exporters president and CEO Dennis Darby said in a statement Friday.

The Chamber’s Chan urged the government to “use every tool at its disposal to resolve this dispute.”

The federal government was relatively hands-off in last year’s port dispute, said Johnson — unlike the rail stoppage, which saw the government ask the Canada Industrial Relations Board to order a return to work and binding arbitration, which it did.

Despite the importance of Canada’s ports, Johnson said the rail disruption posed a more imminent threat.

“Railroads touch most of the products that people consume at some point in the supply chain, so they’re really the lifeblood of the Canadian economy,” he said.

“Shutting down a port for a couple of weeks probably isn’t going to be something that people are going to notice, but … a rail disruption would have much more significant economic impact and significant impact on consumers directly.”

On Friday, Fertilizer Canada also raised the alarm about the impending labour disruption, saying the ports are vital for exporting potash overseas and a shutdown would cost the industry $9.7 million per day in lost sales revenue.

The organization said the 2023 dispute cost the fertilizer industry more than $126 million, and had knock-on effects beyond the 13 days workers were off the job: in the months after the stoppage, Canada lost significant market share to Russia in key markets, it said.

“We are once again on the brink of losing access to a critical trade corridor, and potash fertilizer will be one of the hardest-hit commodities,” said president and CEO Karen Proud in a statement.

The organization called on the federal government to amend the Canada Labour Code to “ensure the continuous movement of fertilizer products at ports during labour disputes.”

Nutrien, the world’s largest potash producer, said that its marketing and delivery subsidiary Canpotex is exploring alternatives to mitigate the stoppage’s effect on customers.

However, a prolonged disruption could negatively affect farmers and food security globally, said media relations manager Shawn Churchill in an emailed statement.

On the other side of the country, the Port of Montreal is also in the midst of a dispute, with two terminals closed until further notice as about 1,200 longshore workers began striking at the end of October.

— With files from Chuck Chiang in Vancouver

This report by The Canadian Press was first published Nov. 5, 2024.

Note to readers: This is a corrected story. A previous version said the 2023 strike was at the same port.

OTTAWA – The Canadian government is in a better position to manage trade negotiations with the next American president than it was the last time it signed a deal with the U.S. and Mexico, Foreign Affairs Minister Mélanie Joly said as Americans headed to the polls Tuesday.

U.S. voters are choosing between starkly different visions of their country’s future with either former president Donald Trump or Vice-President Kamala Harris. Whoever wins the White House this year will be in charge when the Canada-U.S.-Mexico trade agreement is reviewed in 2026.

The “Team Canada” approach the Liberal government launched when negotiating with the first Trump administration is already back in play, and Joly said the government is ready to work with premiers, mayors, the business sector and unions to look out for Canadian interests.

Joly also said she’s been speaking with other foreign ministers and world leaders about how to work with the next president.

“So we have an approach that is very broad and we are very unique in the world. We have the strongest and, I think, most important relationship as a country with the U.S.,” Joly said.

While they’ll be watching the election results closely, several cabinet ministers who are expected to be involved in upcoming trade talks say they’ve been laying the groundwork for months.

Trump and Harris have both campaigned on protectionist policies, which could pose a major threat to Canada’s economy.

Trump’s pledge to bring in a 10 per cent across-the-board tariff — something the Canadian Chamber of Commerce believes could cost the Canadian economy around $30 billion per year.

Innovation Minister François-Philippe Champagne said the goal over the last several months has been to define Canada as a critical and strategic partner, particularly on economic security, as opposed to just a friendly neighbour to the north.

“The focus of our friends in the United States is national security. National security and economic security are one. I think there is a better understanding today that the strategic relationship that we have is serving North America’s national security,” Champagne said.

The two presidential candidates differ significantly on their approach to security, in particular when it comes to the NATO alliance.

Trump has been highly critical of NATO allies — particularly those, like Canada, that are not meeting the agreed-upon spending target — accusing them of failing to pull their weight and calling the alliance “obsolete.”

Canada does not plan to reach the target of spending two per cent of GDP on defence until at least 2032.

Meanwhile, Harris has said her administration would uphold mutual defence pacts and continue steadfast support for Ukraine.

Defence Minister Bill Blair said he believes either administration will recognize the work Canada is doing to boost defence spending.

“It takes time to build new battleships, it takes time to build the new submarines we’re going to require, and deliver the airplanes we need,” Blair said on his way into Tuesday’s cabinet meeting.

“I have great confidence in the institutions of the United States, including our relationship with the State Department and their military.”

Joly said Trudeau’s government now has a well of experience to draw on after dealing with three different U.S. administrations over the last decade.

The government has also built relationships with both Republicans and Democrats in preparation for whoever takes over the White House.

Irregular border crossing may once again become an issue for Canada with Trump promising to launch the biggest deportation effort in American history, pledging to send upwards of 10 million migrants back to their home countries.

Policies in the first Trump administration contributed to more than 113,000 migrants entering Quebec from the U.S. at Roxham Road. That unofficial crossing was closed last year.

Immigration Minister Marc Miller said he wishes both candidates luck, and noted that a secure, stable border is in both country’s interest.

“We’ve always been able to manage the border with the U.S., and particularly during COVID. Particularly with attempts to put the military on the border, close it, do all sorts of things that didn’t make sense,” Miller said.

This report by The Canadian Press was first published Nov. 5, 2024.