TORONTO – The $14.2 million dollar jackpot in Saturday’s Lotto 649 draw will be shared by two winning ticket holders — one in Ontario and the other in Quebec.
Each winning ticket is worth $7.1 million.
The draw’s guaranteed $1 million prize also went to a lottery player in Ontario.
The jackpot for the next Lotto 649 draw on Feb. 2 will be an estimated $5 million.
Canadians are dispirited, cutting back on costs amid inflation highs: study – CBC News
With inflation at a 39-year high — and banks hiking interest rates to avoid economic recession — many Canadians are said to be distressed and dispirited as they cut back to manage the rising cost of living.
A new study from the polling non-profit Angus Reid Institute shows that 45 per cent of Canadians believe they are worse off now than they were at this time last year. Inflation is now at 7.7 per cent, the highest it has been since 1983.
With grocery and gas prices skyrocketing, Canadians are trying to spend less as their personal costs go up. Almost half say they are now seeking out alternative modes of transport to avoid filling up their gas tanks.
“A lot of people are concerned,” said David Chilton, author of financial self-help book The Wealthy Barber, in an interview with CBC News Network.
Chilton noted that low-income people are particularly impacted by the price hikes because they spend a disproportionate percentage on essentials like food and gas.
According to the study, half of Canadians say it’s been challenging to afford their typical grocery bills.
“I would argue the inflation numbers, as high as they are being reported today, are probably higher, frankly,” Chilton said.
“Anybody that goes to the grocery store I think would agree with that.”
‘They will raise rates until they break something’
The Bank of Canada has been aggressively raising interest rates in efforts to calm inflation, with a hike in March to 0.5 per cent (the first since 2018) followed by another in April to one per cent.
In June, the bank raised its benchmark interest rate a third time this year to 1.5 per cent and indicated that several more hikes are coming. The increases are meant to encourage saving and discourage borrowing in an overheated economy.
WATCH | 45% of Canadians say they’re worse off financially than last year: study
As a result, 22 per cent of Canadians with a mortgage say their payments have increased; more than half say that they fully expect theirs to go up, according to the report.
An increase of $150 per month would be difficult for over a third of homeowners — but raising that number to $300 would be downright unaffordable, 66 per cent said, forcing them to seriously consider a change of plans.
Renters are also feeling stretched thin, with over half saying that affording monthly rent is difficult.
WATCH | The Wealthy Barber author discusses how rising inflation is impacting Canadians:
“I think that you are going to see central banks throughout the world continue to raise rates” to contain inflation, Chilton said.
“It’s impacting people and I think they will raise rates until they break something.”
When it comes to placing their trust in the Bank of Canada, Canadians are split: just under half (46 per cent) say that they believe the bank adequately fulfils its mandate, while slightly fewer (41 per cent) say they believe otherwise.
Three quarters of Canadians are dissatisfied with the way that provinces have handled rising inflation.
The study, conducted online, surveyed 5,032 Canadian adults who are members of the Angus Reid Forum, between June 7 and 13. For comparison purposes, a probability sample of this size carries a margin of error of +/- 2 percentage points, the non-profit said.
In April, while announcing a rate hike, Bank of Canada governor Tiff Macklem told reporters that the bank is trying to anchor inflation expectations.
“The longer inflation remains well above our target, the greater is the risk that Canadians begin to think that this higher inflation is going to persist, and that becomes embedded in their inflation expectations.”
“The need to make sure that inflation expectations remain moored on our two per cent target was reflected in our decision today.”
About two in five Canadians have credit card debt, as well, with that number increasing to 62 per cent among those who qualified as “struggling” on the Angus Reid Institute’s economic stress index.
Within this group, about 58 per cent say it will take over a year to pay off those debts.
It’s a very “unusual time,” Chilton says.
“I think everybody has to approach it from their individual perspective … I always believe you’ve got to watch your costs, but that’s more true now than ever.”
“Inflation Forecasts Aren't Worth the Paper They're Written on”: This Is about the Bank of Canada's Reaction to Inflation, But it's the Same in the US and Everywhere – WOLF STREET
“Why the current tightening cycle is unlike anything we’ve observed in the past.”
By Wolf Richter for WOLF STREET.
When Canada’s Consumer Price Index for May was released a couple of days ago, it was – “as expected,” I would say – a lot lot worse than expected, and exceeded once again by a huge margin the inflation forecasts by the Bank of Canada. According to the exasperated economists at the National Bank of Canada, CPI inflation runs 1.5 percentage points above the BoC forecasts of CPI, outrunning those forecasts at every step along the way. May was “the biggest miss yet in what has been a systematic underestimation of inflation,” they wrote in a note.
“So if May’s CPI report doesn’t set alarm bells ringing at Governing Council [of the Bank of Canada], someone should check their collective pulse,” they noted.
The headline CPI for Canada spiked by 7.7% in May compared to a year ago, the worst inflation rate since 1983, according to Statistics Canada:
The BoC has already hiked its policy rates by 125 basis points, to 1.50%. At its last meeting, it included hawkish language of more and bigger hikes than expected, such as a 75- basis point hike at the July meeting. The BoC has also embarked on QT, and its balance sheet has been shrinking since March 2021. But the rate hikes and the hawkish language of future rate hikes were based on the BoC’s inflation forecasts which have been “a systematic underestimation of inflation.” So this rate-hike cycle is going to get interesting.
On a month-to-month basis, CPI jumped by a stunning 1.4% in May from April, not seasonally adjusted; and by 1.1% seasonally adjusted. As expected, I would say, those spikes totally blew away the expectations.
The month-to-month CPI rates of March, April, and May, annualized, spiked to an annual rate of 12.5%.
The red-hot month-to-month increases came across the board, and not just in a few commodities-linked items. It gave the BoC more than enough reasons to pull the trigger on a 75-basis point hike at its meeting on July 13.
“Inflation forecasts aren’t worth the paper they’re written on.”
The BoC’s inflation forecasts that it released at each of its prior meetings going back to April 2021 are depicted in different colors in the chart below from National Bank of Canada’s Financial Markets shop. The red line is the actual CPI rate for each quarter. The BoC’s estimates start at each meeting with the then current CPI rate.
So at its April 2021 meeting (light blue, first line from the bottom), as inflation had begun to surge, the BoC estimated that CPI would peak at just under 3% by mid-2021 and then decline to 2% by March 2022, hahahaha.
Then at its July 2021 meeting, the BoC forecast that inflation would top out at 3.8% by Q3 2021, then drop to 3% by about right now, hahahaha, and to 2% by Q3.
The above chart shows how ridiculously far off these inflation forecasts were, and how this inflation is a big wild card that just keeps getting worse, even as commodities prices have started to come down.
“For BoC watchers trying to compare today’s inflation trajectory with earlier monetary tightening episodes, give up. There’s simply no comparison in the overnight rate target era (that started in the mid-1990s). That’s why the current tightening cycle is unlike anything we’ve observed in the past,” said National Bank of Canada’s Warren Lovely and Taylor Schleich in their note.
“As aggressive as the past couple of BoC actions may have seemed at the time, it’s time to turn the screws even tighter,” they said.
“A 75 bp rate hike on July 13th won’t fix Canada’s inflation problem, not with labour markets as tight as they are. As an aside, job vacancy data are clearly worrying, and Canada’s acute labour shortage won’t be remedied quickly despite a resumption of healthy population growth [through immigration],” they wrote.
And they added – sprinkled with stark inflation humor:
“To summarize: We have out-of-control inflation. Simply sending more money to households like some governments have done (or intend to do) is just like adding gasoline (itself already expensive) to the fire.
“Inflation demands an uber-forceful BoC reaction, including a 75 bp hike in three weeks’ time.
“Exceptional rate hikes have done little to control prices (so far) but have turned housing markets upside down. Consumer psyches bear watching and recession risks have mounted.
“Indeed, with inflation data like this, securing a ‘soft landing’ might be like threading the eye of a needle. We haven’t totally abandoned hope, but today’s CPI report should sober up even the most enthusiastic among us.”
The Fed was also ridiculously off with its inflation forecast every step along the way and by now has gotten burned at the stake for its use of “temporary” and transitory.” The ECB too has been ridiculously far off with its inflation forecasts. And their monetary policies – their refusal to hike rates starting in early 2021, and their refusal to end QE and start QT at the same time – were driven by this ridiculous underestimation of inflation. But now they’ve gotten the memo.
It is an interesting turn of events that economists at the big banks in Canada as well as the US and everywhere are exhorting their respective central banks to crack down on inflation by raising rates further and harder as this inflation is threatening to spiral out of control, after which the economic and financial damage from runaway inflation is going to be huge.
Stock and bond markets have already reacted sharply to this tightening scenario, and in Canada, housing markets have already “turned upside down,” and central banks have just started to tighten, and nothing central banks did in recent decades can be compared to what comes next, and if a recession is part of the deal of getting this runaway inflation under control, so be it.
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The U.S. wants to ban Juul. Where is Canada on regulating e-cigarettes? – CBC News
Earlier this week, regulators in the United States ordered Juul to pull its vaping products from the market, dealing a major blow to one of the most powerful players in the industry.
The company is appealing the decision by the U.S. Food and Drug Administration (FDA), asking a federal court to block a government order to stop selling its electronic cigarettes.
While the attempted ban in the U.S. doesn’t directly affect Canada, some health advocates say it raises questions about the slow pace of regulation in this country.
Here’s a closer look at the FDA’s decision and what’s happening in Canada.
Why was Juul banned?
As part of the FDA’s review process, companies had to demonstrate that their e-cigarettes benefit public health. In practice, that means proving that adult smokers who use them are likely to quit or reduce their smoking, while teens are unlikely to get hooked on them.
In its decision, the FDA said that some of the biggest e-cigarette sellers like Juul may have played a “disproportionate” role in the rise in teen vaping. The agency said that Juul’s application didn’t have enough evidence to show that marketing its products “would be appropriate for the protection of the public health.”
On Friday, the e-cigarette maker asked the court to pause what it called an “extraordinary and unlawful action” by the FDA that would require it to immediately halt its business. The company filed an emergency motion with the U.S. Court of Appeals in Washington as it prepares to appeal the FDA’s decision.
That dispute is far from over.
What about in Canada?
Juul’s vaping products, as well as those sold by other companies, remain available in Canada.
Health Canada proposed a ban on flavoured vaping products last June. At the time, it cited research indicating that flavoured vaping products are “highly appealing to youth, and that youth are especially susceptible to the negative effects of nicotine – including altered brain development, which can cause challenges with memory and concentration.”
But after a round of consultations last year, that proposed ban still hasn’t been put into effect.
Several provinces and territories have put in place their own limits on flavoured vaping products, citing their appeal to teenagers.
(Juul voluntarily stopped selling many of its flavoured cartridges in 2020 following criticism they were designed to entice youth.)
David Hammond, a public health professor at the University of Waterloo who researches vaping in youth, said banning Juul products in the U.S. won’t necessarily have a significant impact on the industry as a whole, given its declining market share and the variety of products available.
“You know, it’s like a tube of toothpaste. If you press at one point, you just kind of squeeze it to a different spot,” he said.
What does Health Canada say?
“Health Canada has no plans to remove any vaping products from the Canadian market that comply with the Tobacco and Vaping Products Act and the Canada Consumer Product Safety Act,” the agency told CBC News in an email.
The government has recently put in place new restrictions on the sector, including limits on advertising for e-cigarettes and the amount of nicotine in the products. It’s also undergoing a review of the legislation for vaping products that went into effect in 2018.
On its website, Health Canada warns of the risks of e-cigarettes, saying “the potential long-term health effects of vaping remain unknown” and the government continues to investigate “severe pulmonary illness associated with vaping.”
Last week, Health Canada announced another set of proposed regulations that would require vaping companies to disclose information about “sales and ingredients used in vaping products,” to help the government “keep pace with the rapidly evolving vaping market.”
How popular is vaping?
Vaping is popular among young people, with 14 per cent of Canadians between the ages of 15 and 19 having vaped in the last month of 2020, up from six per cent from the same month in 2017, according to the results of the Canadian Tobacco and Nicotine Survey.
Vaping is less popular for adults over the age of 25, with just three per cent reporting that they vaped within the last month in 2020.
Robert Schwartz, a senior scientist at Toronto’s Centre for Addiction and Mental Health, said the regulatory challenge is to strike a balance between making these products available to adults as an alternative to cigarettes, while at the same time limiting their appeal to younger non-smokers.
“We definitely are finding that young people who would not otherwise become cigarette smokers have started to use e-cigarettes and they fairly quickly develop a dependence on them,” said Schwartz.
“Our research is also demonstrating that some adults are able to quit by … using these cigarettes.”
What’s the holdup?
Like Schwartz, Hammond said vaping products could be a useful tool in helping wean smokers off cigarettes. He said it doesn’t make sense to put strict limits on vaping products if cigarettes, which are thought to be more harmful, are still available in corner stores.
“I don’t think the answer lies just with how they are regulated,” he said. “I think it lies with the industry and reframing these products as something that a 50-year-old uses to quit smoking and not a 15-year-old grabs on the way to a party.”
Hammond, who sits on Health Canada’s advisory board for vaping products, said the agency could stand to move more quickly given the stakes.
“There’s no doubt these are difficult questions and the market shifts rapidly. But it’s not an area where slow, plodding regulation is a good fit,” he said.
Cynthia Callard, executive director of the advocacy group Physicians for a Smoke-Free Canada, said that, while the context is different in Canada, the FDA decision “is a reminder that governments can and should bar market access to products which cannot be shown to benefit public health.”
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