Canada column for Sunday, Jan. 25/15
THE CANADIAN REPORT
(c) By Jim Fox
The rapid collapse of oil prices has prompted the Bank of Canada to cut its trendsetting interest rate to stabilize the economy.
“The drop in oil prices is unambiguously negative for the Canadian economy,” central bank governor Stephen Poloz said as the rate fell to 0.75 percent from one percent where it has been for four years.
As an oil-producing nation – selling more crude to the U.S. than any other country – the economic impact of cheap fuel threatens Canada’s economic rebound and a return to a balanced federal budget.
So far, Canada’s commercial banks have made no move to lower their prime-lending rate that is still three percent.
The rate cut immediately caused the Canadian dollar to fall by about three cents from a week ago to the 80-cent US range but it boosted stock markets.
The Conference Board of Canada predicted plummeting oil prices would cause a loss of $4.3 billion in the federal government’s current-year income and a loss of $10 billion in royalties and tax revenues for the provinces.
The federal government is also delaying its budget until April to assess the situation.
An Alberta Mountie was shot and killed while trying to apprehend a man who had stolen a truck.
Constable David Wynn, 42, was shot twice as he chased a suspect in the Apex Casino in St. Albert, north of Edmonton.
The suspect, Shawn Rehn, was found dead in an apparent suicide at a nearby house.
Wynn, who had been a paramedic in Bridgewater, Nova Scotia before becoming a Mountie in 2009, is survived by his wife, Shelly, and three sons.
News in brief:
- Vancouver is ranked among the most unaffordable real estate markets in the world – just behind Hong Kong. The Demographia International Housing Affordability Survey found Vancouver’s median house price at $704,800 while Toronto’s was $482,900. Victoria, Kelowna and Fraser Valley were also ranked unaffordable while Moncton, New Brunswick is Canada's most affordable market.
- Don Harron, who created the comedic icon Charlie Farquharson, has died at his Toronto home at age 90. He became known internationally when he appeared for 18 seasons on the U.S. variety show Hee Haw in the 1960s.
- The Royal Bank of Canada is returning to the United States with a $5.4-billion deal to acquire City National Corp., based in Los Angeles, to expand its wealth management business. Royal lost more than $1 billion when it sold its retail banking segment in the U.S. Southeast in 2011.
Facts and figures:
Canada’s dollar has dropped to 80.53 cents U.S. while the U.S. dollar returns $1.2416 in Canadian funds, before bank exchange fees.
Shaun Osborne of TD Securities said the dollar could fall by another five cents in the next three to six months.
The Bank of Canada lowered its key interest rate to 0.75 percent while the prime-lending rate is unchanged at three percent.
Stock markets are higher, with the Toronto exchange index at 14,813 points and the TSX Venture index 676 points.
The average price of a liter of gasoline across Canada is higher at 90.31 cents (Canadian).
Lotto 6-49: (Jan. 21) 3, 15, 17, 35, 44 and 46; bonus 23. (Jan. 17) 9, 15, 21, 27, 35 and 40; bonus 5. Lotto Max: (Jan. 16) 6, 29, 30, 31, 36, 42 and 45; bonus 32.
- Prosecutor Lise Archambault said a warrant for the arrest of former Montreal Canadiens’ hockey great Guy Lafleur in 2008 was justified. She spoke at a civil trial where Lafleur is seeking $2.16 million for his “unjustified” arrest. He was found guilty in 2009 of giving contradictory testimony at his son’s bail hearing on sex charges but the conviction was later overturned in an appeal.
- There are calls in Canada’s western provinces to have border agents inspect boats of “snowbirds” returning from the U.S. for zebra and quagga mussels. Scientists at a conference of the Invasive Species Council said the mussels pose risks to fishing and biodiversity. There’s concern the mussels could infest British Columbia, Alberta and Saskatchewan.
Jim Fox can be reached at email@example.com