愛污传媒

Business

    • Economists expect inflation eased in January, but housing still 'thorn' in BoC's side

    Share
    Ottawa -

    As the Bank of Canada waits for the right moment to start cutting interest rates, some economists are arguing that its decision shouldn't hinge on the housing market.

    Canada's inflation rate has edged up and down over the last several months after dropping from its 2022 highs as global price pressures fade and the economy cools.

    Statistics Canada is set to release its January consumer price index report on Tuesday and forecasters expect Canada's inflation rate fell. RBC, CIBC and TD all project the annual rate eased to 3.2 per cent, down from 3.4 per cent in December.

    Nathan Janzen, RBC's assistant chief economist, says the slowdown was likely driven by energy and food prices.

    "Gasoline prices were lower than a year ago in January and food price growth probably continued to slow on a year over-year-basis," he said.

    "I think the attention will be more focused on the other components of CPI, just watching for signs that broader inflation pressures are continuing to slow, if only at a gradual pace."

    As high borrowing costs cause consumers and businesses to pull back on spending, inflation is expected to slowly inch closer to the two per cent target by the end of the year.

    But unlike what's typical when interest rates rise, the housing market won't be helping the economy slow. Economists widely expect shelter costs to continue soaring this year, making the Bank of Canada's job that much harder.

    "Food and housing are really the ones that are growing at an uncomfortable level and still (remain) the thorn in the side of Bank of Canada," said James Orlando, TD's director of economics.

    In December, shelter costs were up six per cent from a year ago and grocery prices rose 4.7 per cent annually.

    Orlando argues the central bank shouldn't hold off on cutting interest rates while waiting for the housing market to slow, given that high interest rates aren't going to help get those costs down.

    In a report on Friday, CIBC also noted the central bank isn't well-positioned to help ease shelter costs.

    "Planned reductions in the inflow of foreign students, and perhaps other (government) measures still to come, might be more potent than high interest rates in calming rising rents, while the mortgage interest cost component would be helped by Bank of Canada rate cuts," the report said.

    The Bank of Canada has recently emphasized the outsized role housing has played in propping up inflation. At the interest rate announcement last month, when it opted to continue holding its key interest rate at five per cent, it noted shelter costs are now the primary driver of above-target inflation.

    RBC says mortgage interest costs 鈥 which are driven by the central bank's rate hikes 鈥 account for a quarter of inflation. If those costs were removed, the bank says inflation would be in the one to three per cent target range.

    The Canadian Real Estate Association recently reported home sales picked up in January for a second month in a row. And while prices fell, the association said rising activity suggests the market is starting to "turn a corner."

    The prospect of a rebound is clearly on the Bank of Canada's mind. In its summary of the deliberations leading to its Jan. 24 rate decision, the central bank said its governing council is concerned that a housing market rebound this spring could keep inflation above its target, even as price growth elsewhere in the economy eases.

    Orlando said if the central bank were to cut rates too early, it could cause extra froth in the housing market. But he said says the Bank of Canada should still focus on how the economy overall is faring, rather than fixating too closely on shelter.

    "Are you willing to sacrifice the rest of the economy, to bring down shelter inflation? And our analysis shows that you're not even going to be able to bring down shelter inflation, no matter what you do with interest rates," he said.

    Orlando said to get to two per cent inflation, prices for other goods and services would essentially have to stop growing to compensate for high housing costs.

    In a recent speech, governor Tiff Macklem conceded that the central bank can't do much when it comes to housing costs.

    鈥淗ousing supply has fallen short of housing demand for many years. There are many reasons why 鈥 zoning restrictions, delays and uncertainties in the approval processes, and shortages of skilled workers. None of these are things monetary policy can address,鈥 Macklem said on Feb. 6.

    This report by The Canadian Press was first published Feb. 19, 2024.

    This is a corrected story. A previous version misspelled Nathan Janzen's last name. 

    CTVNews.ca Top Stories

    Canadian musician Jacob Hoggard has been found not guilty of sexually assaulting a young woman in northeastern Ontario eight years ago. The former Hedley frontman had pleaded not guilty to sexual assault.

    Police have arrested a Toronto woman in connection with three recent homicides and investigators say that they believe two of the victims may have been 'randomly targeted.'

    The body of a British Columbia mountain climber has been located and recovered after the 39-year-old man was reported missing during a solo climb on Washington state's Mount Baker earlier this week.

    A teen charged with the murder of another teen on Prince Edward Island last year has pleaded guilty to a lesser charge of manslaughter.

    A Saskatchewan man living in the United States has pleaded guilty to possessing child pornography after he unknowingly provided disturbing videos to an FBI agent he thought was a pedophile.

    Canada

    • Police have arrested a Toronto woman in connection with three recent homicides and investigators say that they believe two of the victims may have been 'randomly targeted.'

    • The body of a British Columbia mountain climber has been located and recovered after the 39-year-old man was reported missing during a solo climb on Washington state's Mount Baker earlier this week.

    • A Saskatchewan man living in the United States has pleaded guilty to possessing child pornography after he unknowingly provided disturbing videos to an FBI agent he thought was a pedophile.

    • Melissa Duff-Shore, a Cambridge, Ont. woman who killed her daughter in 2020, has been ordered to a forensic hospital in St. Thomas.

    • Canadian musician Jacob Hoggard has been found not guilty of sexually assaulting a young woman in northeastern Ontario eight years ago. The former Hedley frontman had pleaded not guilty to sexual assault.

    • A northeastern Ontario jury has started deliberating in Canadian musician Jacob Hoggard's sexual assault trial, we can now tell you what they weren't allowed to hear.

    World

    Politics

    Health

    Sci-Tech

    Entertainment

    Business

    Lifestyle

    • A five-seat sushi counter located inside another restaurant is the latest Vancouver eatery to receive a Michelin star.

    • What does New Westminster's t蓹m蓹sew虛tx史 Aquatic and Community Centre have in common with a historic 68,000-seat stadium in Beijing, an NFL stadium and the aquatics venue for the Paris Olympics? They've all been named among the world's most beautiful sports venues for 2024.

    Sports

    Autos

    • A Pickering, Ont., student going to college to be a mechanic is shocked the engine in his two-year-old car will not be repaired under warranty after the dealership claimed he had been 'over-revving' the engine.

    • A group of classic car enthusiasts donated hundreds of blankets to nursing homes in Nova Scotia.

    Local Spotlight

    Chantal Kreviazuk is set to return to Winnipeg to mark a major milestone in her illustrious musical career.

    From the beaches of Cannes to the bustling streets of New York City, a new film by a trio of Manitoba directors has toured the international film festival circuit to much pomp and circumstance.

    A husband and wife have been on the road trip of a lifetime and have decided to stop in Saskatchewan for the winter.

    The grave of a previously unknown Canadian soldier has been identified as a man from Hayfield, Man. who fought in the First World War.

    A group of classic car enthusiasts donated hundreds of blankets to nursing homes in Nova Scotia.

    Moving into the second week of October, the eastern half of Canada can expect some brisker fall air to break down from the north

    What does New Westminster's t蓹m蓹sew虛tx史 Aquatic and Community Centre have in common with a historic 68,000-seat stadium in Beijing, an NFL stadium and the aquatics venue for the Paris Olympics? They've all been named among the world's most beautiful sports venues for 2024.

    The last living member of the legendary Vancouver Asahi baseball team, Kaye Kaminishi, died on Saturday, Sept. 28, surrounded by family. He was 102 years old.

    New data from Greater Vancouver and the Fraser Valley shows a surge in supply and drop in demand in the region's historically hot real estate market.

    • Chayton Point loved to dance. Just ask his mom.

    • As the provincial election campaign reaches the halfway mark, the party leaders made pitches to voters on bread-and-butter issues: housing, child care and jobs.

    • Vancouver police have deployed extra resources in anticipation of multiple protests planned for Oct. 7.

    • Police have arrested a Toronto woman in connection with three recent homicides and investigators say that they believe two of the victims may have been 'randomly targeted.'

    • Canadian musician Jacob Hoggard has been found not guilty of sexually assaulting a young woman in northeastern Ontario eight years ago. The former Hedley frontman had pleaded not guilty to sexual assault.

    • Toronto Public Health has confirmed two cases of listeria in the city believed to be connected to ready-to-eat deli meat products sold by Summerhill Market.

    • Three Calgary businesses have been ordered to shut down after inspectors discovered evidence of uninspected meat.

    • A pedestrian is in critical condition after being struck by a vehicle in southeast Calgary on Friday night.

    • Alberta Health Services (AHS) says it is taking immediate action to expedite care for patients who had referrals to community health-care providers delayed.

    • The owner of a Gatineau, Que. caf茅 says it's 'silly' that Quebec's language watchdog is telling the business to write its Instagram posts in French.

    • Gas prices in Ottawa are set to rise this weekend after a slight uptick overnight.

    • Canadian musician Jacob Hoggard has been found not guilty of sexually assaulting a young woman in northeastern Ontario eight years ago. The former Hedley frontman had pleaded not guilty to sexual assault.

    • At least two people are dead and others are injured after a fire ripped through a century-old building in Old Montreal early Friday morning, sources told Noovo Info.

    • The owner of a Gatineau, Que. caf茅 says it's 'silly' that Quebec's language watchdog is telling the business to write its Instagram posts in French.

    • A 28-year-old female driver was seriously injured in a three-vehicle collision Friday afternoon in Saint-R茅mi, Mont茅r茅gie, reports the S没ret茅 du Qu茅bec (SQ).

    • A 79-year-old woman is dead after the vehicle she was driving crashed into an east Edmonton building late Friday afternoon.

    • A letter from Edmonton's mayor to the Alberta government detailing the city's fiscal wishlist ahead of next year's budget calls for fair treatment for the capital city, something several city councillors say isn't already happening.

    • A new docu-series that reveals what life is like for National Hockey League players on and off the ice during the playoffs is now out.

    • A teen charged with the murder of another teen on Prince Edward Island last year has pleaded guilty to a lesser charge of manslaughter.

    • The federal Fisheries Department says it is concerned about a "pattern" of violence and threats toward its enforcement officers after two tense incidents off southwestern Nova Scotia last month.

    • Friday marked the grand opening of 22 new seniors' apartments built from the ground-up on Pitt Street in Sydney Mines, N.S.

    • Brady Oliveira and the Winnipeg Blue Bombers continue to roll along. Oliveira ran for a season-high 147 yards and a touchdown to power Winnipeg past the Hamilton Tiger-Cats 31-10 on Friday night.

    • A new report from Doctors Manitoba is calling for major changes to the way sick notes are issued in Manitoba, saying they are a waste of time for doctors and employers.

    • With winter right around the corner, thousands of feathered friends are flying south. New technology in Assiniboine Park is helping researchers around the world unlock the mysteries of this migration.

    • A Saskatchewan man living in the United States has pleaded guilty to possessing child pornography after he unknowingly provided disturbing videos to an FBI agent he thought was a pedophile.

    • A group of climate activists is challenging SaskPower's move towards natural gas, arguing it violates their Charter rights.

    • Regina kids facing mobility issues were gifted toy cars through the Go Baby Go program.

    • Police have laid charges after a car crashed into the side of a Kitchener home early Friday morning.

    • The K-W Symphony may have played their last concert but the musicians who made up the ensemble aren鈥檛 ready for their curtain call.

    • Melissa Duff-Shore, a Cambridge, Ont. woman who killed her daughter in 2020, has been ordered to a forensic hospital in St. Thomas.

    • The Saskatchewan Teachers' Federation hosted a virtual election forum on education Thursday evening, giving candidates in the provincial election a chance to share their thoughts and answer questions on issues teachers find most important.

    • A Saskatchewan man living in the United States has pleaded guilty to possessing child pornography after he unknowingly provided disturbing videos to an FBI agent he thought was a pedophile.

    • Saskatoon police arrested a homeless person at the scene of an encampment underneath the University Bridge on Friday morning.

    • Canadian musician Jacob Hoggard has been found not guilty of sexually assaulting a young woman in northeastern Ontario eight years ago. The former Hedley frontman had pleaded not guilty to sexual assault.

    • Two police officers in Greater Sudbury required medical attention for injuries they received arresting a man for the second time in just two days.

    • Police have arrested a Toronto woman in connection with three recent homicides and investigators say that they believe two of the victims may have been 'randomly targeted.'

    • The Ministry of Labour is investigating a workplace incident that claimed the lives of two people in Georgian Bluffs, south of Owen Sound.

    • Eleven victim impact statements were submitted into court during the proceedings.

    • Middlesex OPP have shuttered a road between Mount Brydges and Komoka today - Amiens Road is currently closed between Glendon Drive and Oriole Drive.

    • A woman whose son died last month while at a Penetanguishene, Ont. beach with another family member wants to see safety increased at the beach.

    • The Ministry of Labour is investigating a workplace incident that claimed the lives of two people in Georgian Bluffs, south of Owen Sound.

    • Provincial police are investigating a collision along Highway 400 in Tay Township Friday afternoon.

    • A London, Ont. man, who pleaded guilty earlier this year in a harassment case, has been sentenced to two months in jail for criminal harassment of a Windsor, Ont. family.

    • Hike Metal has added more security since a $20,000 ship propeller was stolen, while Crime Stoppers is still looking for tips on possible suspects

    • The City of Windsor is on the right path to adding much needed housing inventory to the stock, according to city officials.

    • We haven't heard the candidates talk much about education during B.C.'s 2024 election campaign, but the teachers' union is trying to put the spotlight on that issue.

    • The body of a British Columbia mountain climber has been located and recovered after the 39-year-old man was reported missing during a solo climb on Washington state's Mount Baker earlier this week.

    • Many British Columbians were shaken awake early Friday morning when an earthquake struck in the Strait of Georgia, about 18 kilometres southwest of Tsawwassen.

    • Three young suspects have been arrested in connection with a swarming attack on a teenager in B.C.'s Okanagan last week 鈥 and authorities have asked the public to stop circulating disturbing videos of the incident.

    • A father in Kelowna is furious after his 13-year-old daughter was brutally beaten on Gyro Beach. He is calling for criminal charges in the devastating attack, which was caught on video by multiple bystanders.

    • The officer who shot and killed a forcible confinement suspect in Kamloops two years ago was justified in doing so, according to the Independent Investigations Office of B.C.

    • A person was airlifted to hospital following a serious crash in Taber, Alta., on Friday morning. Taber RCMP responded to the scene on Highway 864 around 10:30 a.m., for a crash involving an SUV and a semi-truck.

    • To enhance inclusivity at Lethbridge Polytechnic, the institution has launched a new accessibility micro-credential.

    • WestJet has changed its operations at the Lethbridge Airport, and it means there's now only a single daily flight from Lethbridge to Calgary, down from three flights a day, as offered previously.

    • Two teens, ages 14 and 19, have been charged with arson in connection with a July 14 fire in Cat Lake First Nation that destroyed $500,000 in construction materials.

    • A northeastern Ontario jury has started deliberating in Canadian musician Jacob Hoggard's sexual assault trial, we can now tell you what they weren't allowed to hear.

    • A suspect who accused Thunder Bay police of being responsible for his throat injury actually hurt himself when he swallowed a large amount of drugs.

    N.L.

    Shopping Trends

    The Shopping Trends team is independent of the journalists at 愛污传媒. We may earn a commission when you use our links to shop.聽Read about us.

    Stay Connected
    Follow 愛污传媒