B.C. premier pushes back against latest interest rate hike

Rate hike takes toll on small businesses The Bank of Canada raised the interest rate to five per cent Wednesday, the highest in more than two decades.

British Columbia's Premier is firing back at the Bank of Canada after its tenth rate hike since March 2022.

During a joint press conference with fellow premiers, David Eby voiced his concerns with Wednesday's interest rate hike to five percent, a move intended to slow inflation.

The premier questioned whether the Bank of Canada is considering the impacts of rate hikes before making them.

"We have not seen the full impact yet. People have not renewed their mortgages yet, and the businesses that are struggling under debt have not started going under yet – but they will," said Eby.

He went on to say that this will impact employment not only in British Columbia but nationwide.

The West Coast premier believes a long-term strategy to combat inflation includes improving infrastructure in a way that "gets our exports out to a global market and gets our imports in with the minimum amount of friction, so it's cheaper for British Columbians and all Canadians," he said, noting that federal support is needed to make this happen.

"Frankly, I don't believe in solutions that come at the expense of the poorest people," he said.

VANCOUVER BUSINESS OWNER STRUGGLING

Jenny Yen has been operating Two of Hearts Clothing and Boutique in the heart of West 4th Avenue for more than a decade.

In the spring, she was told her lease would triple, leaving her scrambling to make ends meet to save her business.

"I was surprised it would go up by that much that we can't sustain the business here," said Yen.

"As a brick-and-mortar, it's detrimental to us having a livelihood and being able to make a living."

Yen was faced with months of uncertainty before making the tough decision to move on and say goodbye to a neighbourhood that became a home away from home.

The boutique's last day on the busy Kitsilano street is July 15, but Yen is not finished in the Vancouver fashion scene.

The CiCi fashion designer is planning to recreate Two of Hearts on West 10th Avenue with a focus on local clothing and art.

"We're adding a few elements to make it work and hopefully not just survive but to actually thrive."

Although a much quieter area, Yen says the rent is cheaper and will allow her to continue her passion and serve her clientele.

'INFLATION IS TOUCHING EVERYTHING'

The 25 basis point increase to the country's already high-interest rate has some financial experts feeling uneasy.

Sharon Davis, an independent mortgage planner with Dominion Lending, told CTV News that rate bump will affect lines of credit and variable rate mortgages.

"We will see a quarter rate increase in the prime rate, which will translate into higher payments for all households,' said Davis.

"Inflation is touching everything."

Davis went on to say that anyone paying for shelter, whether that's owning a home or paying rent, could  see costs rise as well, leaving many in Metro Vancouver to face financial hardships.

This could lead to landlords of not only homes but businesses increasing rent to help offset their high-interest rates.

Since rates began to rise over a year ago, inflation has dropped from a peak of 8.1 per cent last summer to 3.4 per cent in May.

In September the Bank of Canada is expected to make its next rate decision.