Canada column for Sunday, Jan. 21/18
THE CANADIAN REPORT
(c) By Jim Fox
The cost of borrowing has gone up again as Canada’s central bank raised its trendsetting interest rate.
The jump by one-quarter percent by the Bank of Canada is the third increase since last summer and the highest rate in nine years.
An impressive increase in economic numbers led the bank to raise the rate but it warned of the potential impact of uncertainties about rewriting the North America Free Trade Agreement.
There’s speculation the bank will increase the rate at least twice more this year but potential negatives about the agreement’s outcome could affect its outlook.
The bank said “some continued monetary policy accommodation will likely be needed” to keep the economy operating close to its full potential.
“We can't just relax and assume that it would be a small shock,” said bank governor Stephen Poloz.
Trade impacts of the deal’s demise might not have such a major impact on Canada but would likely impact the amount of investment in the country.
Canada’s major banks almost immediately raised their prime lending rate by 0.25 percent to 3.45 percent.
The Greater Toronto Area is still in the running for Amazon Inc.’s second North American headquarters.
It is the only Canadian city to make the short list of 20 candidates, with the rest in the U.S., after the company pared down its list of 238 applications.
Amazon said it will invest about $5 billion for the proposed headquarters and hire 50,000 employees.
News in brief:
- Three railway workers have been found not guilty of criminal negligence in the deaths of 47 people in the Lac-Megantic disaster in 2013. A jury deliberated for nine days to reach the verdict for train engineer Tom Harding, Richard Labrie, traffic controller, and Jean Demaitre, manager of train operations. The tragedy that wiped out the much of the town’s center was caused when an unattended runaway train carrying crude oil derailed and exploded.
- Fear of crime has prompted the Canadian government to urge sun seekers to “exercise a high degree of caution” in Jamaica. The warning follows a military lockdown in St. James Parish that takes in the popular Canadian tourist destination of Montego Bay. Anyone staying at a resort in the affected area should “restrict their movements” to the property, the warning said. A Winnipeg couple was found dead earlier this month while visiting Jamaica.
Facts and figures:
The Canadian dollar is lower at 79.98 cents U.S. while the U.S. dollar returns $1.25 in Canadian funds before exchange fees.
The Bank of Canada’s key interest rate has increased by 0.25 percent to 1.25 percent while the prime-lending rate is 3.45 percent.
Stock markets are higher, with the Toronto exchange index at 16,353 points while the TSX Venture index is 880 points.
The average price for gas in Canada is up to $1.19 a liter or $4.52 (Canadian) for a U.S. gallon.
Lotto 6/49: (Jan. 17) 6, 24, 34, 39, 43and 44; bonus 8. (Jan. 13) 21, 26, 32, 40, 42, 44; bonus 12. Lotto Max: (Jan. 12) 1, 8, 16, 19, 26, 34 and 41; bonus 10.
- Heavy rain and unseasonably warm temperatures that melted a significant amount of snow has led to severe flooding, power outages and evacuations across Atlantic Canada. More than 100 people in Musquash, New Brunswick had to leave their homes as water levels in a dam rose. Thousands of people lost their power while there was also heavy flooding and infrastructure damage in western Newfoundland.
- There will no longer be whales, dolphins and porpoises at the Vancouver Aquarium after a long battle with animal activists. Aquarium CEO John Nightingale said the decision was made because “the controversy, the distraction, the dialogue in the community had begun to limit our ability to pursue our ocean conservation mission.” Peter Fricker of the Vancouver Humane Society said the decision is a major victory for animal welfare in keeping them in captivity.
Jim Fox can be reached at firstname.lastname@example.org