Indian envoy warns of 'big red line,' days after charges laid in Nijjar case
India's envoy to Canada insists relations between the two countries are positive overall, despite what he describes as 'a lot of noise.'
Canada's central bank says businesses and consumers are increasingly convinced that the pace of price increases will continue for the foreseeable future.
The Bank of Canada said Monday that its pair of quarterly surveys of businesses and consumers show respondents expect the annual rate of inflation to remain above the Bank of Canada's two per cent target for the rest of the year.
Two-thirds of the firms that took part in the bank's business outlook survey anticipate inflation to stay above three per cent over the next two years.
Respondents in the survey of consumer expectations expected inflation to remain above four per cent for the next two years, up from readings in the survey from the previous quarter. Longer-term expectations stayed relatively steady around 3.5 per cent five years out.
For consumers, inflation has become what the central bank describes as the most important economic issue, more so than taxes and jobs.
"Canadians are clearly becoming more concerned about inflation, anticipating prices to remain elevated over the next two years," said TD economist Ksenia Bushmeneva.
The consumer survey also suggests Canadians doubt policy-makers can easily rein in elevated inflation rates, with two-thirds of respondents saying it is more difficult now to control inflation than it was before the pandemic.
The survey of firms and consumers took place before the country saw a rapid rise in COVID-19 cases, which has resulted in new economic restrictions to slow the spread of the Omicron variant.
CIBC chief economist Avery Shenfeld wrote in a note that a similar survey done now would likely knock back some optimism firms expressed in late November, "but inflation expectations would no doubt remain elevated."
The Bank of Canada is scheduled to make an announcement next week about its key policy rate and provide an updated economic outlook.
Senior bank officials have previously said they are keeping a close eye on expectations to see if Canadians start to believe that temporary issues driving inflation become permanent drivers of price growth.
In November, the annual rate of inflation hit 4.7 per cent and is expected to be the same, or a touch higher, when the December reading is released Wednesday.
A key reason for the increase, and one flagged in each survey the central bank published Monday, is ongoing supply-chain issues.
Consumers told the bank they don't expect to see supply chain issues to dissipate until the pandemic ends, the timing of which respondents were uncertain about.
Bank officials wrote that many respondents believe the pandemic will end, or COVID-19 will become endemic, within the next two years, while some expect it could last even longer.
Firms were similarly uncertain about when supply chain issues will be resolved, but many expect it will take more than a year at the very least.
Adding to inflation pressures are plans from a strong majority of firms to raise wages at a faster rate over the next 12 months, pointing to the need to compete for talent amid growing labour shortages across regions and sectors.
The bank's survey report noted that cost-of-living increases are also increasingly driving wage pressures, raising the possibility of a cycle of price and wage increases.
"Higher inflation is driving higher wages, which is driving price hikes, and then we're back to inflation," wrote Benjamin Retizes, BMO's managing director of Canadian rates. "The Bank of Canada cannot be comfortable seeing this feedback loop building."
This report by The Canadian Press was first published Jan. 17, 2022.
India's envoy to Canada insists relations between the two countries are positive overall, despite what he describes as 'a lot of noise.'
With Donald Trump sitting just feet away, Stormy Daniels testified Tuesday at the former president's hush money trial about a sexual encounter the porn actor says they had in 2006 that resulted in her being paid to keep silent during the presidential race 10 years later.
The U.S. paused a shipment of bombs to Israel last week over concerns that Israel was approaching a decision on launching a full-scale assault on the southern Gaza city of Rafah against the wishes of the U.S.
Footage from dozens of security cameras in the area of Drake’s Bridle Path mansion could be the key to identifying the suspect responsible for shooting and seriously injuring a security guard outside the rapper’s sprawling home early Tuesday morning, a former Toronto homicide detective says.
A chicken farmer near Mattawa made an 'eggstraordinary' find Friday morning when she discovered one of her hens laid an egg close to three times the size of an average large chicken egg.
Susan Buckner, best known for playing peppy Rydell High School cheerleader Patty Simcox in the 1978 classic movie musical 'Grease,' has died. She was 72.
Accused killer Jeremy Skibicki could have a challenging time convincing a judge that he is not criminally responsible for the deaths of four Indigenous women, a legal analyst says.
A Calgary bylaw requiring businesses to charge a minimum bag fee and only provide single-use items when requested has officially been tossed.
Two Nova Scotia men are dead after a boat they were travelling in sank in the Annapolis River in Granville Centre, N.S., on Monday.
An Ontario man says he paid more than $7,700 for a luxury villa he found on a popular travel website -- but the listing was fake.
Whether passionate about Poirot or hungry for Holmes, Winnipeg mystery obsessives have had a local haunt for over 30 years in which to search out their latest page-turners.
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.