B.C. tenants evicted for landlord's use after refusing large rent increase to take over neighbouring suite
Ashley Dickey and her mother rented part of the same Coquitlam duplex in three different decades under three different landlords.
The Bank of Canada is expected to announce yet another interest hike on Wednesday, and economists are hoping that it will be the last one for a while, with some warning it could be a step closer to recession as Canada tries to balance the need to fight inflation with the growing pressure on the housing market.
Economists and most commercial banks are anticipating a raise of a quarter percentage point on Wednesday, which would bring the central bank’s key interest rate to 4.5 per cent.
If a rate hike is announced, it will be the eighth time the interest rate has been increased in the last 10 months.
“Now the question is whether that is the last one,” Jimmy Jean, vice-president & chief economist at Desjardins, told CTV News Channel on Tuesday.
“Certainly the case is building now that we’ve done sufficient tightening. We have seen a peak in inflation, we can’t say that the signs are too compelling that the trend is accelerating, but at least we’ve seen a peak. And we do know that the economy, especially interest-rate-sensitive sectors, are slowing.”
After peaking at 8.1 per cent in the summer, the annual inflation rate cooled to 6.3 per cent in December, a sign that the Bank of Canada’s interest hikes may be paying off in battling inflation.
But it’s a tricky bargain, and some economists say an eighth rate hike is dangerous and could push Canada closer to a recession. Jim Stanford, chief economist at the Centre for Future Work, wrote in a blog post Monday that Canada’s economy has not recovered from the blow dealt by the pandemic, noting that retail sales are down and that GDP growth isn’t high enough.
A Monday research note from the National Bank of Canada written by economists Matthieu Arseneau and Taylor Schleich said “the most aggressive policy rate increase in a generation is taking its toll on the economy.”
The new interest hike expected this Wednesday is 25 basis points, not as steep as the 50 basis points hike seen in December. But even a smaller hike can have huge impacts, economists say.
“Those who argue that another 25 basis points increase will not kill the economy forget that at this stage of the business cycle, the impact of further hikes is not linear,” the National Bank research note stated. “In other words, the marginal increase could be the straw that breaks the camel’s back.”
If the central bank doesn’t want to lose credibility, they would be wise to make this the last rate hike for a while, Jean suggested, as interest hikes have been causing instability for some Canadians, particularly in the housing market.
“When you look at metrics like debt-to-income or debt-to-asset, it’s very elevated, and secondly, we also have a feature in our mortgage system that, for example the U.S. doesn’t have,” Jean said. “We renew typically a mortgage every five years, so people renewing now are doing (that) at much higher interest rates, and given the debt burden that exerts significant pressure on their budget.”
Those who are caught in the bind of renewing a mortgage at a time of higher interest rates may have their budgets constrained. It’s an issue that could domino depending on how strong other aspects of the economy are.
According to the Centre for Future Work, extra debt charges paid by households ate up 0.6 per cent of GDP in the third quarter of 2022, the highest quarterly increase in history.
The National Bank research note stated that Canadian housing “is in a recession”, adding that “cumulative price declines (are) now exceeding what was observed in 2008-09.”
Jean said that the job market is still “tight, is resilient, but it doesn’t mean that will stick forever.”
“If we get into an environment in 2023 where people start to lose their jobs and we still have those major mortgage payment increases, it’s going to put a lot of people in financial difficulty,” he said. “They’re going to stop spending, to the extent that we should see contractions in GDP, and if the Bank of Canada really pushes it too far, it might create a recession of a magnitude that wouldn’t be necessary to really deal with inflation.”
If the Bank of Canada fails to make this interest hike their last for now, it might be hard for anyone to argue the pros outweigh the cons anymore, he said.
“Especially knowing that part of the inflation that was transitory — supply chains, those kinds of pressures, energy — those are coming down nicely right now, so I think there is a good case to make that … after this one, the Bank of Canada might want to stop,” Jean said.
Ashley Dickey and her mother rented part of the same Coquitlam duplex in three different decades under three different landlords.
MPP Sarah Jama was asked to leave the Legislative Assembly of Ontario by House Speaker Ted Arnott on Thursday for wearing a keffiyeh, a garment which has been banned at Queen’s Park.
A man who fell into a crevasse while leading a backcountry ski group deep in the Canadian Rockies has died.
A Montreal-area family confirmed to CTV News that the body of their loved one who died while on vacation in Cuba is being repatriated to Canada after it was mistakenly sent to Russia.
A new survey by Dalhousie University's Agri-Food Analytics Lab asked Canadians about their food consumption habits amid rising prices.
After Prime Minister Justin Trudeau said the federal government would still send Canada Carbon Rebate cheques to Saskatchewan residents, despite Saskatchewan Premier Scott Moe's decision to stop collecting the carbon tax on natural gas or home heating, questions were raised about whether other provinces would follow suit. CTV News reached out across the country and here's what we found out.
A Montreal actress, who has previously detailed incidents she had with disgraced Hollywood producer Harvey Weinstein, says a New York Court of Appeals decision overturning his 2020 rape conviction is 'discouraging' but not surprising.
Charlie Woods failed to advance in a U.S. Open local qualifying event Thursday, shooting a 9-over 81 at Legacy Golf & Tennis Club.
A B.C. man has been found not guilty of assaulting two RCMP officers – with the court finding he was resisting an "unlawful entry and arrest" in his home before he was tasered, taken down and hauled away in handcuffs.
Mounties in Nanaimo, B.C., say two late-night revellers are lucky their allegedly drunken antics weren't reported to police after security cameras captured the men trying to steal a heavy sign from a downtown business.
A property tax bill is perplexing a small townhouse community in Fergus, Ont.
When identical twin sisters Kim and Michelle Krezonoski were invited to compete against some of the world’s most elite female runners at last week’s Boston Marathon, they were in disbelief.
The giant stone statues guarding the Lions Gate Bridge have been dressed in custom Vancouver Canucks jerseys as the NHL playoffs get underway.
A local Oilers fan is hoping to see his team cut through the postseason, so he can cut his hair.
A family from Laval, Que. is looking for answers... and their father's body. He died on vacation in Cuba and authorities sent someone else's body back to Canada.
A former educational assistant is calling attention to the rising violence in Alberta's classrooms.
The federal government says its plan to increase taxes on capital gains is aimed at wealthy Canadians to achieve “tax fairness.”
At 6'8" and 350 pounds, there is nothing typical about UBC offensive lineman Giovanni Manu, who was born in Tonga and went to high school in Pitt Meadows.