Video shows suspect setting Toronto-area barbershop on fire
Video of a suspect lighting a Richmond Hill barbershop on fire earlier this week has been released by police.
With inflation soaring and moving at the fastest pace since February 2003, plus COVID-19 government benefits set to expire on Saturday, Canadians are feeling the crunch.
Recent BDO Affordability Index data reveals that Canadians are experiencing more difficulties affording necessities compared to earlier in the pandemic, and that Canadians reliant on government benefits aren't at all confident they can maintain their standard of living without them.
The cost of living is increasing, and not likely to abate anytime soon. Energy prices remain a major contributor to inflation, but consumers are feeling the pinch at the grocery store, at the car dealership, and at home.
Here's some evidence: A recent Angus Reid poll found that 42% of Canadians have been saving less or not at all during the pandemic, and 57% said it was due to an increase in spending on essentials such as groceries and housing. Nearly one-quarter went on to say that they find it challenging to put food on the table, while 45% of Canadians say housing costs are a challenge.
As the price pressures continue to mount -- and with expectations that inflation will run north of 4% for the balance of the year -- it is only natural for economists on Bay Street to start to weigh in on interest rates.
Derek Holt, the head of Capital Markets Economics at Scotiabank, told BNN Bloomberg that he expects eight rate hikes before the end of 2023.
What does this mean to you?
Loans and mortgages: No need to panic if you are in a fixed mortgage. I suspect you went fixed in the first place to afford yourself the luxury of time and peace of mind. However, rising rates will make housing more expensive for those in variable rate mortgages or variable rate loans. Now may be the time to consider locking in. When it comes to loans, don't just focus on mortgages. If you are thinking of buying a new car or renovating your home, consider locking in funding before it becomes more costly.
Savings and investment: We have proven to be a nation of savers during the pandemic, and as bank accounts have grown, they certainly haven't been helped much in this low-interest-rate environment. After taxes and inflation, you may have even seen a slight erosion. While rates will ultimately tick a little higher, it will take time for that to have a meaningful impact on your returns. Given the strong performance of the markets and high levels of savings, I think now is the time to rebalance your portfolio to ensure your savings and investments are aligned to your risk tolerance, time horizon and asset allocation.
Jobs and the economy: The economy and the job market are proving to be more resilient than anyone was originally projecting; however, now is not the time to be complacent. We have still not witnessed meaningful business investment in Canada, and my fear is that there could be further job losses down the road. No one really tends to worry about handling their debt obligations until they don't have a job and quickly discover they are in over their head. Now is the time to secure a line of credit or credit card for use in an emergency situation only. Better yet, build up three to six months' worth of living expenses in an emergency fund. All are best if never used, but invaluable if needed.
Travel: The pandemic has crushed the travel industry amid shutdowns and restrictions around the globe. However, headway against the virus will eventually unleash pent-up demand. Keep in mind that higher rates often lead to a higher dollar. So whenever the Bank of Canada nudges up its benchmark rate, you can bet that some Canadians will take advantage of cheaper international travel opportunities.
Purchases: Hit the pause button before you make any major purchases that you know you can't afford and will eventually have to finance in a higher-rate environment.
The financial landscape is changing and as our economy strengthens, so should our personal balance sheets.
The next meeting by the Bank of Canada is Oct. 27, and while no one expects a rate hike that soon, you can be sure they are paying attention to the recovering economy and persistent price pressures.
Interest rate lift-off is coming, and now is the time to take it seriously.
Video of a suspect lighting a Richmond Hill barbershop on fire earlier this week has been released by police.
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