An El Nino-less summer is coming. Here's what that could mean for Canada
As Canadians brace themselves for summer temperatures, forecasters say a weakening El Nino cycle doesn’t mean relief from the heat.
The Bank of Canada released a summary of its Governing Council meetings on Wednesday, providing the public and financial institutions with more insight into the central bank’s decision to raise its key interest rate on Jan. 25.
The Governing Council, made up of six members including Bank of Canada Governor Tiff Macklem and his deputies, met five times starting on Jan. 18, before their decision on Jan. 25 to raise the overnight rate by a quarter of a per cent to 4.5 per cent.
Discussions at these meetings did look at the possibility of pausing the rate at 4.25 per cent.
“The case for leaving the policy rate at 4.25 per cent was that developments with respect to both the economy and inflation were beginning to move in the right direction and that policy had been forceful and just needed more time to do its work,” reads the summary released on Wednesday.
Ultimately, the council’s consensus to raise the rate was due to a tight labour market and concern over stronger-than-expected economic growth in the third and fourth quarters of 2022. Despite this, there was also consensus to indicate a pause in the bank's hikes to measure the full effect of its forceful tightening.
Members of the council viewed the tight labour market as an indication the economy remains in excess demand, and project that rebalancing the labour market may take longer than usual as businesses continue to face labour shortages.
“Council concluded that wage momentum was plateauing in the range of 4 per cent to 5 per cent,” reads the summary. “Persistent wage growth in this range was not viewed as consistent with achieving the 2 per cent target.”
Domestically, the bank debated why consumption could be slower than it projected. The members of the council noted that many Canadian households may be renewing five-year terms on their mortgages, which means many consumers could be facing higher monthly mortgage payments, which dampens consumption.
Discussions around the international economy were focused mainly on the United States reaching its debt ceiling, and how negotiations in U.S. Congress around raising it could become “protracted and pose risks of financial volatility if an agreement were elusive.”
Other international factors the council considered included China and its rapid relaxation of COVID-19 policies, which could pose a risk of higher oil prices, if China’s demand outweighs what was initially expected. Overall, even with central banks tightening their policies worldwide, members of the council concluded global inflation had edged down from its peak and “the perceived risk of a deep recession had decreased.”
The central bank plans to continue these summaries of Governing Council meetings. The decision to release them was in response to recommendations made by the International Monetary Fund in its transparency review of the central bank.
“It will give some additional insight into our decision-making process,” Macklem said in an interview with CTV News on Jan. 25. “What were the key factors at play? What were the options on the table? And really, how did we drive to a consensus decision?”
As Canadians brace themselves for summer temperatures, forecasters say a weakening El Nino cycle doesn’t mean relief from the heat.
Canada Post is increasing stamp prices for the third time since 2019, a move the Crown corporation says is a "reality" of its sales-based revenue structure.
The federal New Democrats are calling out Conservative Leader Pierre Poilievre and his party for trying to block the bill that could pave the way for millions of Canadians to access birth control and diabetes coverage.
Defence lawyers of Jeremy Skibicki have admitted in court the accused killed four Indigenous women, but argues he is not criminally responsible for the deaths by way of mental disorder – this latest development has triggered a judge-alone trial rather than a jury trial.
A daily spoonful of olive oil could lower your risk of dying from dementia, according to a new study by Harvard scientists.
An Ontario MPP was asked again to leave the Ontario legislature on Monday for wearing a keffiyeh, a garment that was banned by the Speaker last month due to its political symbolism.
H5N1 or avian flu is decimating wildlife around the world and is now spreading among cattle in the United States, sparking concerns about 'pandemic potential' for humans. Now a health expert is urging Canada to scale up surveillance north of the border.
Democratic Institutions Minister Dominic LeBlanc will be tabling legislation on Monday aimed at countering foreign interference in Canada. Federal officials have scheduled a technical briefing on the incoming bill for Monday afternoon.
Polish prosecutors have discontinued an investigation into human skeletons found at a site where German dictator Adolf Hitler and other Nazi leaders spent time during the Second World War because the advanced state of decay made it impossible to determine the cause of death, a spokesman said Monday.
Eighty-two-year-old Susan Neufeldt and 90-year-old Ulrich Richter are no spring chickens, but their love blossomed over the weekend with their wedding at Pine View Manor just outside of Rosthern.
Alberta Ballet's double-bill production of 'Der Wolf' and 'The Rite of Spring' marks not only its final show of the season, but the last production for twin sisters Alexandra and Jennifer Gibson.
A mother goose and her goslings caused a bit of a traffic jam on a busy stretch of the Trans-Canada Highway near Vancouver Saturday.
A British Columbia mayor has been censured by city council – stripping him of his travel and lobbying budgets and removing him from city committees – for allegedly distributing a book that questions the history of Indigenous residential schools in Canada.
Three men in Quebec from the same family have fathered more than 600 children.
A group of SaskPower workers recently received special recognition at the legislature – for their efforts in repairing one of Saskatchewan's largest power plants after it was knocked offline for months following a serious flood last summer.
A police officer on Montreal's South Shore anonymously donated a kidney that wound up drastically changing the life of a schoolteacher living on dialysis.
Since 1932, Montreal's Henri Henri has been filled to the brim with every possible kind of hat, from newsboy caps to feathered fedoras.
Police in Oak Bay, B.C., had to close a stretch of road Sunday to help an elephant seal named Emerson get safely back into the water.