Canada column for Sunday, Oct. 27/13
THE CANADIAN REPORT
(c) By Jim Fox
Canadians can expect interest rates to stay where they are – or even be cut further – over the next several years, the Bank of Canada said.
The comment triggered a sell-off of Canadian dollars that pushed the currency almost two cents U.S. lower than a week ago.
The bank’s monetary policy report also lowered anticipated economic growth.
“The statement is making it clear we have balanced the risks,” new bank governor Stephen Poloz said.
Previous bank statements cautioned consumers about over-borrowing but this time it was suggested there could be cuts to the 1-percent key rate that’s been in place for more than three years.
Continued weakness in exports with restrained spending on machinery and equipment is a major concern keeping inflation below target.
The bank cited fiscal turbulence in the U.S. and continued weak global demand that have kept Canada’s exports from rebounding.
A concern for the government has been the risk of reigniting the housing market through increased borrowing that could cause problems for consumers when interest rates begin rising again.
(For more Canadian news for the week, click "Read More")
It is now expected that senators will vote by the mid-week on whether to suspend without pay three of their members for “improper” expense claims.
Senators Patrick Brazeau, Mike Duffy and Pamela Wallin were appointed by Conservative Prime Minister Stephen Harper.
They appeared before the Senate over three days last week to plead their cases, saying they are being treated unfairly.
Harper called for swift action to punish the three senators accused of violating the public trust.
Police continue to investigate housing allowances and expenses paid to Brazeau and Duffy as well as former Liberal senator Mac Harb, who has resigned.
A review is underway into Wallin’s expense claims and she has repaid $138,969. Harb paid back $231,649, Duffy reimbursed $90,172 and Brazeau still owes $48,744.
- Canadian-based Loblaw Companies said it will provide long-term financial aid to victims and families in the garment factory collapse that killed 1,100 workers in Bangledesh last April. It was at the New Wave Style factory that produced clothing for Loblaw's Joe Fresh line. The amount of compensation wasn’t disclosed and the company will also pay three months in wages until the longer-term assistance begins.
- Bell Canada plans to track how customers use the web and mobile devices, what they watch on TV and when they make phone calls. Beginning Nov. 16, the data will be collected to improve network performance, create marketing reports and sell targeted ads on mobile devices. Bell insists the data will not be linked with a customer's identity.
- Canada Bread Company, a division of Maple Leaf Foods, has sold Olivieri Foods pasta and sauce business to Ebro Foods of Spain for $120 million. Olivieri had sales of $105.5 million last year and employs 375 people in Hamilton, Ontario and Delta, British Columbia. Maple Leaf is also “exploring options” to sell its Canada Bread bakery division.
Facts and figures:
Canada’s dollar has dropped to 95.64 cents U.S. while the U.S. dollar returns $1.045 in Canadian funds, before bank exchange fees.
The Bank of Canada’s key interest rate remains at 1 percent while the prime-lending rate is 3 percent.
Stock markets are higher, with the Toronto exchange index at 13,379 points and the TSX Venture index 972 points.
Lotto 6-49: (Oct. 23) 6, 12, 14, 20, 21 and 26; bonus 33. (Oct. 19) 3, 4, 6, 23, 33 and 44; bonus 31. Lotto Max: (Oct. 18) 10, 26, 28, 33, 34, 35 and 40; bonus 12.
- Investigators are trying to determine why emergency brakes unexpectedly engaged causing 13 oil and propane cars on a CN Rail freight train to derail near Gainford, Alberta. The derailment and subsequent fire that took several days to burn out forced 126 people from their homes.
- The latest estimated cost of the Ontario government’s decision to cancel the construction of two gas plants near Toronto has risen to $1.1 billion. Former finance minister Dwight Duncan told a committee hearing that “we all regret this (decision).” Opposition politicians say the Liberals killed the unpopular plants to help them win the 2011 election.
Jim Fox can be reached at firstname.lastname@example.org