Governor of the Bank of Canada Tiff Macklem participates in a news conference on the bank's interest rate announcement and release of the Monetary Policy Report, in Ottawa on Wednesday, Jan. 29.Patrick Doyle/Reuters
Bank of Canada cuts rate by quarter point, highlights tariff risk
The Bank of Canada cut its benchmark interest rate by a quarter-percentage-point to 3 per cent on Wednesday and warned that the Canadian economy “would be tested” if a trade war breaks out with the United States, Mark Rendell reports. The central bank also announced the end of quantitative tightening – a years-long push to shrink the size of its balance sheet after its early pandemic bond-buying spree. In addition, its quarterly Monetary Policy Report (MPR) publish several scenarios estimating the potential impact of a major trade war. The analysis found that 25-per-cent U.S. tariffs, along with retaliation, could send the Canadian economy into a recession and drive up inflation within the first year of a trade war, Nojoud Al Mallees reports.
Amazon and Ottawa at odds over proposed meeting with its CEO Andy Jassy
After Amazon announced it would close its Quebec operations, the retail giant and Ottawa are now at odds about a proposed meeting between Industry Minister François-Phillippe Champagne and Amazon CEO Andy Jassy. A government spokesperson told The Globe and Mail that Mr. Jassy declined the invitation to meet with Mr. Champagne, Vanmala Subramaniam and Mahima Singh report., but Amazon has denied that such a refusal ever took place. The tech giant announced on Jan. 22 that it would be laying off 1,700 full-time employees and 250 temporary workers after evaluating that operations in Quebec were no longer needed. It also denied that the warehouse closures were related to the unionization of more than 200 employees last May at one of its facilities in Laval, Que. Meanwhile, the government has said it still has plans to call for a review of its business relationship with Amazon.
Decoder: The ‘extreme’ gap in Canadian and U.S. interest rates
The Bank of Canada cut its benchmark interest rate on Wednesday. But as Matt Lundry reports, its U.S. counterpart, the Federal Reserve, did not. As a result, Canadian rates are lagging behind those of the U.S. at the widest differential since 1997. In a research note, Bank of Montreal chief economist Doug Porter said “the gap is extreme” and only the second time in the past 50 years that Canadian rates have trailed by more than 100 basis points. (There are 100 basis points in a percentage point.) The outlook for interest rates and the Canadian dollar is highly uncertain because of U.S. President Donald Trump’s threat to impose steep tariffs on imports of Canadian goods.
A portrait of an un-named Mississauga entrepreneur in his office who has lost access to his banking services, on Nov. 1, 2024.Adetona Omokanye/The Globe and Mail
Debanked: Why some Canadians are losing their bank accounts without explanation
As Canadian banks face unprecedented pressure from regulators to clamp down on financial crime, an increasing amount of customers are seeing their accounts close down without warning, leaving them scrambling to get their finances in order. As Erica Alini, Alexandra Posadzki and Stefanie Marotta report, the process is called debanking or derisking. Often, a bank detects and flags unusual transactions that indicate a customer may be linked to money laundering, terrorist financing, fraud or other crimes. In some cases, the institution will call in the client for a conversation and an opportunity to explain the financial activity. Often, though, it will simply shut down the account without saying why. But as regulators expect the banks to track and flag more and more transactions and accounts, there is a risk of rising collateral damage: clients who did nothing untoward but become financial outcasts.
Some experts caution that sellers making moves before the dust settles may lose out on bigger gains in the near future.The Good Brigade/iStockPhoto / Getty Images
Is now a good time for snowbirds to sell their American nests?
A heated political climate, a weak loonie and soaring property values are pushing many snowbirds to sell their U.S. properties, Mariya Postelnyak reports. Those who bought in Florida and Arizona 10 to 15 years ago – when the loonie was on par with the U.S. dollar – often stand to make a handsome profit. There are other reasons for selling as well, including affordability issues with the rising insurance, condo fees, property taxes and general inflation. But some experts caution that those acting in haste, before the dust settles, may lose out on bigger gains in the near future or regret handing off a useful asset when political tensions ease.
Take our business quiz for the week of Jan. 31
a. Bill Ackman. The hedge fund manager wrote a fawning note on X after Mr. Trump’s first week in office: “Other than the almighty, who has accomplished more in seven days than @POTUS Trump?”
Get the rest of the questions from the weekly business and investing news quiz here , and prepare for the week ahead with The Globe’s investing calendar.