Canada

The Bank of Canada left its benchmark interest rate unchanged at 5 per cent on Wednesday amid increasing signs that rate hikes are weighing on the Canadian economy, but it left the door open to further hikes over concerns about stubborn inflation, YahooFinance.com reported. Economists had widely expected the central bank to leave its rate steady as the economy slows and inflation eases.

Canada's main banking regulator has directed lenders to hold more capital against mortgages that have seen their repayment terms extend beyond the original terms due to the record pace of interest rate hikes, to contain risks building in the system, Reuters reported. Canada's nearly C$2 trillion mortgage market has been shaken up by the central bank's interest rate hikes, with many home owners only able to make interest payments, resulting in their mortgage repayment terms getting longer.

Canadian consumers are tightening their purse strings, cementing a case for the Bank of Canada to hold interest rates steady next week, Bloomberg News reported. Receipts for retailers were flat in September, according to an advance estimate from Statistics Canada released Friday. That followed a 0.1% decline a month earlier, which matched the median estimate from economists in a Bloomberg survey. “Flat is soft,” Eric Lascelles, chief economist at Royal Bank of Canada’s asset management unit, said on BNN Bloomberg Television.

Dabur India said on Wednesday its subsidiaries were among companies sued in the U.S. and Canada by customers alleging that the use of hair relaxer products had caused ovarian cancer, uterine cancer and other health issues, Reuters reported. "Currently, the cases are in the pleadings and early discovery phases of litigation," it said in an exchange filing, adding the allegations are based on "unsubstantiated and incomplete" study.

Canada needs to promote greater competition among businesses by modernizing its laws, the country's antitrust regulator said on Thursday, citing a study of data from 2000 to 2020, Reuters reported. The study found that competitive intensity, a measure of how hard businesses feel they need to work to gain advantage over competitors, had fallen.

Canada will take steps in the coming weeks to ease a rental-unit shortage exacerbated by Airbnb and other short-term rental platforms, Finance Minister Chrystia Freeland said on Tuesday, Reuters reported. Freeland said that the government is examining options to ensure more short-term rentals become available as long-term rentals. Canada, where population growth is exceeding the pace of housing construction, is the latest country to tackle the problem.

More Canadian firms see inflation easing over the next two years than in the previous quarter, while the business outlook fell to its lowest level since the pandemic, the Bank of Canada said on Monday in a third-quarter survey, Reuters reported. About a third of firms expect a recession over the coming year, the same level as the previous quarter, the survey said. The Bank of Canada has hiked rates 10 times since early 2022 to fight inflation but left rates at 5% at its Sept. 6 meeting, and noted the economy had entered a period of weaker growth. Its next policy decision is due on Oct. 25.

Bank of Canada Governor Tiff Macklem said the inflation rate remains too high but there are clear signs that aggressive interest-rate hikes are reducing demand, Bloomberg News reported. Policymakers remain concerned that they aren’t seeing “downward momentum” in core inflation measures, Macklem told reporters Friday, adding that his governing council is focused on analyzing how a slowing economy will influence price pressures in the future.

About 4,300 unionized workers went on strike at three General Motors plants in Canada on Tuesday, boosting pressure on the automaker grappling with a U.S. union work stoppage now in its fourth week, Reuters reported. The walkout by workers came after Canadian union Unifor said GM was "stubbornly refusing" to match the contract the labor union reached with Ford Motor, which offered wage increases of up to 25% in Canada.

A Bank of Canada official said there’s a risk firms will continue to raise prices more frequently and more sharply, complicating efforts to bring inflation back to 2%, Bloomberg News reported. In a speech in Montreal, Deputy Governor Nicolas Vincent said that while the bank sees signs that corporate pricing behavior is gradually returning to normal, it’s still not what it was before the pandemic and progress is slow. “If recent pricing behavior settles into a new normal, it could complicate our return to low, stable and predictable inflation,” he said on Tuesday.