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Sunday, April 20, 2014

Further interest-rate cuts possible: Bank of Canada governor says

   Canada column for Sunday, April 20/14

   (c) By Jim Fox

   The Bank of Canada’s governor said a further interest-rate reduction is possible as he pared back the country’s first-quarter economic growth estimate.
   “We are neutral – that means a rate cut cannot be taken off the table at this stage,” Stephen Poloz said.
   His comments came as the central bank kept its trendsetting interest rate at 1 percent, where it has been since September 2010.
   Economic growth will slip to 1.5 percent, down one percent, for the first quarter largely because severe winter weather kept shoppers home. Full-year economic growth was revised to 2.3 percent, down 0.2 percent.
   The somewhat negative comments caused the dollar to fall, giving another boost to the economy by making Canadian goods less expensive in the U.S. and abroad.
   Exports could be harmed, however, due to the Russian situation with Ukraine, Poloz said.


   A Calgary man, arrested for fatally stabbing five university students, is undergoing a psychiatric examination before a court appearance on Tuesday.
   Matthew de Grood, 22, also a University of Calgary student, was arrested after the incident during a house party to mark the end of the school term.
   Doug de Grood, the suspect’s father who is an inspector with the Calgary Police Service, said the family is devastated by what happened.
   Police Chief Rick Hanson called it the city’s “worst mass murder” and the victims were four men and one woman in their 20s.
   They were “all good kids” and did nothing to provoke the incident, he said.


    News in brief:
    - “What a sad time this is in the life of our country,” Prime Minister Stephen Harper told mourners at the funeral in Toronto of former finance minister Jim Flaherty. The Member of Parliament died of a heart attack at age 64 just three weeks after retiring from his finance position. Harper said he told him then that he had been “the best finance minister in the world, if not indeed the best in our history.” He is survived by his wife, Ontario politician Christine Elliott and tripled sons.
   - The Mounties say that Nigel Wright, former chief of staff to Prime Minister Harper, won't face criminal charges concerning the Senate expenses scandal. Police were investigating Wright for giving now-suspended Senator Mike Duffy $90,000 to pay back improper housing expenses. Still under investigation are expenses claimed by Duffy and suspended senator Pamela Wallin.
   - Canada's housing market is moving toward slower growth as affordability constraints temper sales and builders have scaled back new developments, Scotiabank says. Resale activity will edge lower over the next year as mortgage rates rise and higher house prices and tougher mortgage regulations strain affordability, the bank said.


   Facts and figures:
   Higher energy and food prices pushed Canada’s inflation rate last month to 1.5 percent, up 0.6 percent, the highest in two years.
   The Canadian dollar is lower at 90.69 cents U.S. while the U.S. dollar returns $1.1026 in Canadian funds, before bank exchange fees.
   The Bank of Canada’s key interest rate is steady at 1 percent while the prime-lending rate is 3 percent.
   Stock markets are higher, with the Toronto exchange index at 14,500 points and the TSX Venture index 998 points.
   The average price of a liter of gasoline across Canada is up at $1.3678 (Canadian).
   Lotto 6-49: (April 16) 3, 16, 26, 40, 41 and 49; bonus 14. (April 12) 2, 7, 35, 36, 42 and 45; bonus 30. Lotto Max: (April 11) 1, 3, 14, 33, 35, 39 and 45; bonus 28.


   Regional briefs:
   - Ontario Liberal Premier Kathleen Wynne is seeking $2 million in damages in a libel suit against Conservative Leader Tim Hudak. The suit is over Hudak’s comments that Wynne “oversaw and possibly ordered the criminal destruction of documents” dealing with canceling two controversial gas plants before the last election. An inquiry found the action cost taxpayers $1.1 billion.
   - Several hundred pro-choice supporters protested at the New Brunswick legislature calling on the government to cover the cost of abortions at private clinics. They want the repeal of a regulation requiring abortions to be performed only at hospitals after two doctors certify the procedure is medically necessary. The protesters say the rule and the impending closing of the Morgentaler abortion clinic in Fredericton puts women at risk.


Jim Fox can be reached at canadareport@hotmail.com

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