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Why Elon Musk’s autonomous driving ideas don’t worry insurers

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Five years ago, the impact of technology on auto insurers was thought to be straightforward: Self-driving cars were coming soon, and they would be so safe, and people would need car insurance about as much as printed newspapers.

If only it had been so simple.

Instead, technology is coming to cars, and insurance, much more gradually. Insurance companies like Allstate, Progressive, and Berkshire Hathaway‘s Geico are embracing it, but in a measured way. And the impact on their business seems likely to be slow and steady, rather than rapidly transformative.

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Instead of self-driving cars, the auto industry is moving cautiously toward better safety equipment and information sharing. Research into autonomous and more-connected vehicles is helping to make those goals more attainable. And insurers are settling for baby steps like in-car monitors that let customers get discounts if they let carriers track how often they accelerate, swerve or stop suddenly — all behavior tied to accident rates. That means change is coming, but much more slowly, to a once-hidebound business that tech seers thought was next in line to get disrupted.

“A few years ago there was almost an alarmist mindset,” said CFRA Research analyst Cathy Seifert. “Then there were high-profile accidents with autonomous vehicles, and naysayers were like, ‘I told you so.’ Now we’re not so much preparing for fully [autonomous personal cars and SUVs]. What I do see coming faster is adoption in corporate or commercial vehicles.”

Auto insurance may be the best example in years of the consulting firm Gartner’s “hype cycle,” an arc where emerging technologies are first overestimated, then fall into a “trough of disillusionment.” Over time, the theory goes, companies figure out what the new technology really can do, or not do, and reaches a “plateau of productivity” that reflects its real potential. Right now, driverless cars are in the trough of disillusionment.

Fully self-driving cars may be as much as a decade away. Even if the technology advances sooner, fully or nearly-fully autonomous cars won’t take any major market share before 2030, argues consulting firm Counterpoint Research.

What auto insurers are doing with technology

In the meantime, drivers are seeing much more modest changes in their cars. Advances like lane departure warnings and systems that stop cars automatically if they detect pedestrians in their path may, eventually, cut accident rates and insurance claims because lane departures cause about 13,000 deaths in 2015, according to the U.S. Transportation Dept. But this technology was standard equipment on only about 6% of cars in model year 2017. Pedestrian braking systems vary widely in quality, and pedestrian deaths in car crashes hit an 28-year high in 2018.

So what’s an insurance company to do? Seifert says the industry is bifurcating into companies that are aggressively adapting to intermediate measures (like Progressive and Allstate), and those like Berkshire Hathaway‘s Geico that she said have moved more slowly.

“We’ve always thought of ourselves as a data company,” said Ginger Purgatorio, senior vice president of product management at Northbrook, Illinois-based Allstate. “We gather information about customers and relay it back to them, traditionally in the form of pricing and more recently in experience. It’s just more data about the same risks we always gathered information about.”

For now, insurers are making bets that incremental technologies improve the business — for themselves and their customers — more than transform it.

The prime examples are technologies that let insurers monitor their clients’ cars and driving in exchange for discounts on coverage, which Seifert estimates that 20% of new policy holders use. The most popular let insurers see how often their clients are making sudden moves that can lead to accidents, or that may be meant to get drivers out of already-sticky situations. Others, like Allstate’s Milewise, monitor simply how many miles the car goes, letting little-used cars qualify for less-expensive policies. Start-ups like Root Insurance, which ranked No. 18 on the 2020 CNBC Disruptor 50 list, are also attempting to upend the industry’s approach to evaluating driver risk.

Insurers’ advertisements are pushing these programs heavily. It’s hard to watch TV these days without seeing the Flo character in Progressive’s long-running ad campaign tout its Snapshot app, the oldest such app. Allstate had actress Tina Fey touting its Drivewise app in TV spots featuring Dean Winters as the long-running Mayhem character. State Farm featured Green Bay Packers quarterback Aaron Rodgers as an SUV-driving user of its Drive Safe and Save app refusing to let his hapless sports agent convince him to run a yellow light lest it mess with his discount.

The average customer who installs one of these devices saves about 8%-12% on a policy, Allstate spokesman Justin Herndon says. About a third of new customers, and 15% of customers overall, use either Drivewise or Milewise at Allstate, he added. One irony is that more-connected younger drivers are more apt to embrace the technology, but they save less because they actually are more prone to fast stops and starts, Purgatorio said.

The technologies are less invasive than one might imagine. Many don’t have technology commonly available through Waze and other traffic apps that would let insurance companies know the speed limit on every street a car traverses, or where stop signs are. So that State Farm commercial featuring Rodgers at the yellow light is kind of half right. Apps like this can tell if he sped up, as people do to beat red lights, but likely wouldn’t know if the light was yellow or green. State Farm’s app gives information on five variables: Speed, cornering, phone use, braking and acceleration.

“Braking for one deer won’t make or break you,” Purgatorio said. “If there are a lot of deer where you live, you need to be slowing down anyway.”

The future of car accidents

Some of the new technology carmakers have adopted isn’t popular enough yet to cut accident rates meaningfully.

That’s one reason why auto accidents haven’t dropped much, and neither have insurance claims, according to industry data. U.S. auto fatalities dropped for decades beginning around 1980, but fatality rates have actually risen slightly since 2014 as automation-related features made it to market, and total motor vehicle crashes have risen 26% since 2011, according to the Insurance Information Institute, even though cars with the features do have lower accident rates.

“Old vehicles are still going to crash into the new vehicles,” said Justin Davis, director of enterprise research at State Farm, referring to the fact that even with the new features, roads are full of vehicles that don’t have them, so there will still be in accidents until usage is closer to universal.

Teslas in self-driving mode have been linked to a few fatalities, and the National Transportation Safety Board called out Tesla during a hearing on self-driving in February. A vice chairman for NTSB, Bruce Landsberg, called Tesla’s Autosteer “completely inadequate,” while NTSB Chair Robert Sumwalt cautioned drivers, “If you own a car with partial automation, do you not own a self-driving car. So don’t pretend you do.”

What has occurred so far in terms of self-driving tech on the road is a long way from the hype a few years ago. Back then, Barclays analyst Brian Johnson was among the most prominent voices insisting that everything would change very much, and pretty soon. Tesla CEO Elon Musk, in particular, said the automaker’s AutoPilot feature would make watching the road, or even owning cars, obsolete for many drivers.

It’s almost getting to a point where I can go from my house to work with no interventions despite going through construction and widely varying situations. So this is why I’m very confident about its Full Self-Driving functionality being complete by the end of this year. It’s because I’m literally driving it.

Elon Musk

Tesla CEO

Musk is known for issuing forecasts where his ambitions can run ahead of the reality. He once said the “feature complete” self-driving would be ready by the end of 2019; at last April’s Tesla investor day he said by mid-2020 Tesla drivers wouldn’t have to pay attention to the road. On a call with analysts in January, he said it was maybe a few months away, and that consumers would see progress that was “extremely rapid.”

Tesla did not respond to a request for comment, but on this past week’s earnings call, the Tesla CEO said the company is continuing to push the envelope on self-driving and the nascent auto insurance business will grow in relation to autopilot technology. Full self-driving software is now tackling intersections, city streets and narrow streets, Musk said on the call. In the past he has described “feature complete” as being able to travel from home to work with no intervention, and that’s something that in recent months Musk said he has been on the roads with himself.

“I personally tested the latest Alpha build of the Full Self-Driving software when I drive my car, and it is really, I think, profoundly better than people realize, yes, really profound. It’s like amazing,” Musk said on the call. “It’s almost getting to a point where I can go from my house to work with no interventions despite going through construction and widely varying situations. So this is why I’m very confident about its Full Self-Driving functionality being complete by the end of this year. It’s because I’m literally driving it.”

A driver rides hands-free in a Tesla Motors Inc. Model S vehicle equipped with Autopilot hardware and software in New York.

Christopher Goodney | Bloomberg | Getty Images

Tesla is betting that higher use of Autopilot will lead to reduced insurance costs as well as the probability of injury and, ultimately, make insurance offered directly by Tesla to drivers a major product for the company, including for its planned use of Tesla cars to develop a ride-hail network of robotaxis.

The insurance is available now in California and Tesla officials said the focus is being able to expand in what is a “heavily regulated” market.

Musk has said in the past that California drivers can pay an amount equal to 25%-50% of a lease payment for insurance. “And a lot of that insurance cost is just because the insurance companies don’t have good information about the drivers and that there is no good way to provide feedback where it’s a very poor feedback mechanism in terms of the insurance rates versus the actual way that the car is being driven, whereas we can do that in real time. It’s a fundamental information advantage that insurance companies don’t have.”

“FSD is just overwhelmingly the most important thing. … everything else is pretty small by comparison,” Musk said on this week’s earnings call.

Self-driving skepticism

Many others outside Tesla are less sure about how quickly self-driving will be ready.

“Autos at [January’s Consumer Electronics Show] seemed to us to mark a retreat from a vision of mobility centered around autonomous ride-sharing and back to a focus on making the experience of human driving safer, more comfortable, less polluting, more connected and more digital, ” Johnson, who was not available for an interview, wrote in an early 2020 report. “Put another way, the focus was around the “C” and the “E” in the ACES framework (Automated, Connected, Electrified and Shared).”

Apps that resemble what we see now will help insurers price risk and even assess accident damage and settle claims more quickly, Seifert said. And venture capital interest in insurance related technology is high. Insurance tech actually raised more money than payments companies for most of the last two years, she said. But insurance startups Root Insurance and MetroMile, which rely on telematics to drive pricing, aren’t yet profitable, she said.

Over time, insurers are waiting to see how technology changes transportation before they know its impact on insurance. Products to cover ridesharing vehicles, electric bikes and other emerging transportation forms are likely, State Farm’s Davis said.

“We don’t assume you have to own a car to have some of these products,” he said. “If you use Uber one day and a bike share the next, that’s a different risk.”

“Hopefully it will still have an impact on crashes,” Davis said. “But it’s a little early to know what that will look like.”

Tesla as a ‘revolutionary’ insurance company

Tesla CFO Zachary Kirkhorn said on the latest earnings call that the current insurance product offered in California is just “version one.”

“Where we want to get to with Tesla Insurance is to be able to use the data that’s captured in the car, in the driving profile of the person in the car, to be able to assess correlations and probabilities of crash and be able then to assess a premium on a monthly basis for that customer. And what makes this very exciting for us is the amount of data that is available with the customer’s permission to use is not available on any other product or any other vehicle in the world.”

Kirkhorn said Tesla decided not to replicate the California product in other states, but delay going into additional states so it could put more effort into the telematics, which refers to technology that merges telecommunications and infomatics.

“Where we are now is nearly complete with the risk and cost analysis associated with the first version of the telematics product. We hope to be filing that in a handful of states with regulators very shortly,” the Tesla CFO said, adding that depending on regulatory approvals, Tesla insurance could be available in a “handful of states” by the end of the year.

“The heart of being competitive with insurance is what is the accuracy of your information?” Musk said on the call. “Are you forced to assess people statistically looking in the rearview mirror? Or can you assess people individually, looking ahead with smart projections and inform the driver that — how they may reduce their — what actions they can take to reduce their insurance. … ‘you’re driving too fast. You’re on this, that, the other thing.’ It’s like, if you want to pay more for insurance, you can. But if you want to pay less, then please don’t drive so crazy. Then people can make a choice.”

One of Musk’s more intriguing ideas on the latest earnings call was about insurance coverage leading to new ideas on how to better design cars to reduce the cost of repair jobs.

“It costs like $15,000 or something crazy and like — and then we can actually adjust the design of the car and adjust how the repair is done to actually have the fundamental cost of solving that problem would be less,” he said about the body work that can result from accidents.

Even if insurers remain confident that their world will not change overnight, or even in the next few years, Musk did give them one thing to worry about in the short-term: Tesla poaching some of their top employees. Musk issued a general job offer on the earnings call to insurance actuaries.

“We’re building a great — like a major insurance company. If you’re interested in revolutionary insurance, please join Tesla. I would love to have some high-energy actuaries especially. I have great respect for the actuarial profession. Your guys are great at math. Please join Tesla. Especially if you want to change things and you’re annoyed by how slow the industry is, this is the place to be. We want revolutionary actuaries.”

Source:- CNBC

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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.”

GDP
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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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