Bank of Canada’s interest rate strategy is failing Canadians

Bank of Canada’s interest rate strategy is failing CanadiansThe data shows that interest rate hikes are now increasing inflation, not decreasing it After nearly a year of interest rate hikes designed to fight inflation, rents in Canada are going up, and food costs remain stubbornly high. And while they might have helped in the summer of last year, interest rate hikes are now…

Ford needs to end the debt and inflation cycle

Ford needs to end the debt and inflation cycleIf there ever was a time for politicians to stop digging, it’s now It turns out endless spending does come with a hangover: soaring interest rates. Ontario’s finances have been awash in red ink since Jays star Vladimir Guerrero Junior was in diapers. Former premier Dalton McGuinty took over Queen’s Park and started Ontario’s debt…

Is Canada’s Employment Insurance system recession proof?

No. The need to broaden access and expand government contributions is urgent

Is Canada’s Employment Insurance system recession proof?The risk of recession is now in clear sight. But as the Bank of Canada pursues a course of aggressive interest rate hikes designed to wrestle inflation to the ground, the potential cost is hundreds of thousands of jobs. The August labour force survey is already revealing a worrying increase in the unemployment rate. At…

Expensive housing here to stay unless governments change policies

Governments must begin to address their own roles in keeping housing prices high

Expensive housing here to stay unless governments change policiesThe recent rise in interest rates has dampened demand for home sales in Canada. The hike, inevitable given how historically low rates have been, has taken some of the froth off housing prices. However, given how high home prices still are in Canada, a useful question to ask is what governments can do to reverse…

Summertime and inflation ain’t easy

Controlling inflation with interest rates can work, but at a terrible cost

Summertime and inflation ain’t easySummer heat isn’t the only thing making Canadians sweat this summer; abnormally high inflation and rising interest rates are putting the heat on many Canadians. We’ve gone from 0 per cent inflation in August 2020 to 8.1 per cent in June 2022. That’s really fast. The last time we saw anything like it was 1970-73…

Economic growth coming close to a dead stop by end of 2022

And the Trudeau government has no convincing plan to address the problem

Economic growth coming close to a dead stop by end of 2022By Jock Finlayson and Ken Peacock The threshold has been crossed. Canada’s largest bank, RBC Financial Group, just published a report predicting that Canada will tip into recession in early 2023. RBC’s call is unusual. Anticipating recessions is notoriously difficult. And it is uncommon for analysts at any of the country’s large financial institutions to…

Hunker down Canadians. Economic storm clouds on Canada’s horizon

Supply chain problems, aging demographics and the push for net zero will drive up government spending

Hunker down Canadians. Economic storm clouds on Canada’s horizonThe era of low interest rates and inflation has ended, and now is the time for governments to show restraint. But recent precedent suggests that’s unlikely. Canadian year-over-year inflation hit 7.7 per cent in May, the highest in nearly 40 years, and I predict it will go still higher. Ten years ago, Parliamentary Budget Officer…

We’re paying the price for artificially low interest rates

Very low interest rates provide a perverse incentive for politicians to rack up more debt

We’re paying the price for artificially low interest ratesCanadians are feeling the effects of rising inflation everywhere, from the grocery store to the gas station. In response to the highest level of inflation in three decades, the Bank of Canada recently increased its policy interest rate to 0.50 per cent after holding it steady at 0.25 per cent for two years. In a…

Bad central bank policy has us heading toward a recession

The next few months may only bring stagnation but a full-blown recession is more likely

Bad central bank policy has us heading toward a recession‘Financial repression’ refers to governments or central banks, such as the Bank of Canada or the U.S. Federal Reserve Board, intervening in financial markets to suppress interest rates. Central banks have been intervening for nearly two years, causing a serious disruption in the financial markets. The official rates of the Bank of Canada and the Federal…
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