Canada

Laurentian University’s board of governors voted unanimously earlier this month to replace the university's long-standing auditors, KPMG, with the firm BDO, Sudbury.com reported. The university continues to undergo restructuring under the Companies’ Creditors Arrangement Act (or CCAA) after declaring insolvency in the winter of 2021. The decision to replace KPMG as the university’s auditors was made at a June 2 special meeting of Laurentian’s board of governors.

Consumer price inflation accelerated to a four-decade high, adding pressure on the Bank of Canada to deliver more aggressive interest rate hikes in coming weeks, Bloomberg News reported. Annual inflation rose to 7.7% last month, up from 6.8% in April, Statistics Canada reported Wednesday in Ottawa. That’s the highest since January 1983 and well above economist expectations for a 7.3% increase. The inflation gauge rose 1.4% from a month earlier with gasoline, hotel rates and cars among the largest contributors to the gains in May.

The Art Gallery of Sudbury can continue to operate out of the Bell Mansion until 2025, under the terms of an agreement reached with Laurentian University, CTVNews reported. Laurentian has also agreed not to sell the art to help settle its debts as it works its way through insolvency under the Companies' Creditors Arrangement Act. After that process is completed, LU has agreed to give the AGS 90 days notice if it intends to sell the collection. The future of the AGS was in question after its assets were included in Laurentian University's insolvency declaration.

Canadians continued to show a willingness to spend, according to retail sales data out on Tuesday, even as accelerating inflation erodes their purchasing power, Bloomberg News reported. The nation’s retailers recorded a 0.9% sales increase in April, Statistics Canada reported, driven primarily by higher volumes. In May, receipts were up 1.6%, according to initial preliminary estimates also released on Tuesday. The numbers suggest rising interest rates, higher inflation and slumping consumer confidence have yet to impact household spending in a major way.

Canadian Finance Minister Chrystia Freeland expressed confidence on Thursday in the Bank of Canada's ability to rein in surging inflation and keep price gains from becoming entrenched, but said there was no guarantee the economy would avoid a recession, Reuters reported. "The Bank has begun the work of bringing inflation back within target, and it has the tools and the expertise it needs to keep inflation from becoming entrenched," Freeland told a business audience in Toronto.

Canadian businesses operating in critical infrastructure sectors would be required to report cyber attacks to the federal government and would have to fortify their cyber systems under a new law introduced on Tuesday, Reuters reported. The legislation identifies finance, telecommunications, energy and transportation sectors as being vital to national security and public safety, but stops short of naming any companies.

Surging disposable income in Canada outpaced debt growth in the first quarter, bringing the nation’s household debt-to-income ratio down from record highs, Bloomberg News reported. Household credit market debt as a proportion of disposable income dropped to 182.5%, from a record 185% in the final quarter of 2021, Statistics Canada reported Monday. Household debt grew 2%, compared with a 3.3% gain in disposable income in the first three months of the year. Net worth rose 2.6% to C$17.6 trillion ($13.7 trillion).

Prices in Canada are rising at their quickest pace in 31 years, but that is not yet feeding in to a wage spiral, Canada's budgetary watchdog said on Tuesday, with inflation still expected to return to target in coming years, Reuters reported. Canadian consumers and businesses expect inflation to creep up in the short term, but longer-term expectations remain anchored, said Yves Giroux, Canada's Parliamentary Budget Officer (PBO), in a statement. "Financial market participants largely do not see the current high-inflation environment as permanent," he said.

The Bank of Canada indicated that persistent price pressures are making it more likely policymakers will need to raise borrowing costs to contractionary levels in order to keep inflation expectations anchored, Bloomberg News reported. In a speech a day after the central bank raised its benchmark overnight rate by a half percentage point to 1.5%, Deputy Governor Paul Beaudry gave new guidance Thursday on how high borrowing costs could rise. The policy rate may now go to the top, or even above, what the Bank of Canada considers its “neutral range,” estimated at between 2% to 3%.

The Bank of Canada took another aggressive step in its hiking cycle, raising its policy interest rate by 50 basis points for a second straight time and warning that it may act “more forcefully” if needed to tackle inflation, Bloomberg News reported. Wednesday’s decision, which brings the benchmark overnight rate to 1.5%, was delivered in a hawkish statement that aired worries about price pressures intensifying and becoming entrenched at elevated levels.