PETE EVANS (CBC NEWS) - In its accompanying monetary policy report, the bank gauged the impact of those tariffs and concluded that it expects Canadian exports to shrink by 0.6 per cent at the end of 2018 because of them. Imports will take a similar hit. In real terms, that's $3.6 billion less going out, and $3.9 billion less coming in, and it will nudge up consumer prices in the process.
Poloz was quick to add that those projections are only based on trade developments that have already happened. They don't factor in the possibility of worse ones, such as U.S. President Donald Trump's threat to put a 25 per cent tariff on Canadian made cars.
"We felt it appropriate to set aside this risk and make policy on the basis of what has been announced," Poloz said.
Toronto Dominion Bank economist Brian DePratto was among those expecting a hike, given the underlying strength in the job market.
"We're in exactly the sort of situation that traditionally warrants rising borrowing costs. Of course, beyond the fundamentals, the current economic environment is hardly normal," he said.
He expects the bank to keep moving cautiously, hiking its benchmark rate any time it can without harming the economy too much, while keeping a close eye on trade issues.
"We still look for more hikes, but think a gradual pace of one hike roughly every two quarters still makes the most sense," he said. "NAFTA resolution and/or receding trade threats would certainly lay the ground work for an additional hike this year, but we won't hold our breath."
Trading in investments known as overnight index swaps suggests the market thinks there's only about an eight per cent chance of another rate hike when the bank meets again in September. But by the end of the year, investors are pricing in a two-in-three chance of at least one more hike.
The Bank of Canada has decided to raise its benchmark interest rate to 1.5 per cent.
Every six weeks, the bank meets to decide on what its interest rate will be, based on what it sees happening in the economy. This time, the bank has decided to raise its rate by 25 basis points — 0.25 percentage points — to 1.5 per cent. It's the fourth time the central bank has raised its rate since last summer.
The bank's rate, known as the overnight rate, is the interest that retail banks have to pay for short term loans, but it affects what that consumers pay to those banks for things like mortgages, lines of credit and savings accounts.
At least one major Canadian bank has already moved in response, with Royal Bank of Canada hiking its prime rate to 3.7 per cent on Wednesday afternoon, up 25 points from 3.45 per cent previously. Others are likely to follow suit in short order.
The central bank tends to cut its rate when it wants to stimulate the economy and raise it when it wants to keep a lid on inflation.
The move was exactly what economists who monitor the bank were expecting, as a recent slate of numbers from Statistics Canada suggest the economy is expanding, the job market is doing well, and inflation is inching higher.
In its decision to hike, the bank noted in a statement that the housing market is stabilizing, commodities such as oil are starting to rally, and businesses are starting to spend again. From the bank's point of view, those are all good signs for the economy.
But the bank also said it is keeping an eye on tariff disputes, specifically those on Canadian steel and aluminum. On the whole, the bank doesn't think the impact will be too harsh.
"Although there will be difficult adjustments for some industries and their workers, the effect of these measures on Canadian growth and inflation is expected to be modest," the bank said.
But that's not to suggest the bank isn't concerned by what's happening on the trade front.
In the statement, the bank said the mere possibility of increased protectionism is "the most important threat to global prospects," and in his comments accompanying the decision on Wednesday, Bank governor Stephen Poloz said trade tensions were "the biggest issue" on the minds of policymakers in recent weeks.
CARLITO PABLO (GEORGIA STRAIGHT) A proposed rental building in Kerrisdale will charge “above average” rates in the west side of Vancouver.
Although rents will be higher, the City of Vancouver believes that the development will contribute to its “affordable” housing goals.
Rents start at $1,903 per month for a one-bedroom unit, and $3,702 for a three-bedroom unit.
The rents apply at the date of the public hearing before council, which is on July 10.
From then on, the developer of the property at 2109 West 35thAvenue can increase rents yearly based on the allowed raises under the provincial tenancy law until the first tenants move in.
According to the staff report, the proposed rents are “above average” when compared to “average rents in newer buildings in the west area of Vancouver”.
The report noted that newer buildings in the west side have an average monthly rent of $1,798 for a one bedroom, and $3,566 for a three-bedroom unit.
However, according to the report, the proposed rents “provide an affordable alternative to homeownership”.
The single-family lot located on the west side of Arbutus Street is subject to a rezoning application to allow for the construction of a three-storey rental building with 12 units.
There will be six one-bedroom units, and six three-bedroom units.
In a report to council, Karen Hoese, acting assistant director for downtown of the city’s planning, urban design and sustainability, wrote that staff have concluded that the project “generally meets the intent” of the city’s Affordable Housing Choices Interim Rezoning Policy or the AHC Policy.
“The AHC Policy plays a role in the achievement of those targets by helping to realize secured market rental housing,” Hoese explained. “Affordability in the context of the AHC Policy and this application, relates to the delivery of secured rental housing which provides a more affordable housing option for nearly half of Vancouver’s population and contributes to a number of City initiatives intended to create diverse and sustainable communities.”
Moreover, “AHC Policy units are targeted to moderate income households and the program extends throughout all parts of the city, thereby providing options that are more affordable than home ownership.”
If approved by council, the rental development will be exempted from paying development cost levies to the city.
In her report, Hoese stated that the development would “contribute to City-wide goals for the achievement of key affordable housing goals of the City”.
Vancouver city council approves allocation of $8 million towards affordable housing initiatives
NAOBIH O'CONNOR (VANCOUVER COURIER) Vancouver city council has approved staff recommendations on how to spend $8 million worth of empty home tax revenue it’s collected to date.
The City of Vancouver expects it will collect $30 million from the tax in the first year, but implementation and operating costs will eat up $10 million, leaving $20 million to be invested on affordable housing initiatives.
About $18 million of the anticipated $30 million has been collected so far, which, after implementation and operating costs are covered, produces $8 million for distribution.
The money will be split as follows:
Staff recommendations were informed by public feedback collected during a consultation process that included an online survey and a one-day “idea jam.”
“I’m very pleased that council has approved a variety of new affordable housing investments funded by Vancouver’s first Empty Homes Tax,” Mayor Gregor Robertson stated in a June 21 press release. “Thank you to everyone who took the time to submit, like, and comment on your favourite housing ideas. We will now be moving forward with new initiatives that will boost support for low-income renters, create more co-op and non-profit housing, and look at new opportunities to make the best use of our existing rental housing.”
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