Canada

Canada's financial regulator is urging lenders to tackle risks from mortgage extensions at the "earliest opportunity" as many borrowers try to navigate higher mortgage costs after the Bank of Canada's surprise rate hike last week, Reuters reported. The Office of the Superintendent of Financial Institutions' (OSFI) urgency underscores the concern about the risk accumulating in Canadian lenders' books as the central bank has resumed interest rate hike after a four-month pause.

A judge has approved a plan to sell an insolvent St. Lawrence fluorspar mine, mill and marine terminal to a new owner, with a formal share purchase agreement to be formalized as early as Friday, the CBC reported. The purchaser plans to restart the operation, though a timeline has not been revealed. Those owed money by Canada Fluorspar Inc., however, can expect "substantial" losses, or zero repayment on liabilities that total more than $140 million, according to Justice Alexander (Sandy) MacDonald of the Supreme Court of Newfoundland and Labrador.

The Bank of Canada on Wednesday hiked its overnight rate to a 22-year high of 4.75%, and markets and analysts immediately forecast yet another increase next month to ratchet down an overheating economy and stubbornly high inflation, Reuters reported. The central bank had been on hold since January to assess the impact of previous hikes after raising borrowing costs eight times since March 2022 to a 15-year high of 4.50% - the fastest tightening cycle in the bank's history.

Canada’s economy hasn’t buckled under the weight of higher borrowing costs. On the contrary: strong growth has more economists predicting the central bank will resume raising interest rates soon, Bloomberg News reported. Thirteen of 17 economists surveyed by Bloomberg say the Canadian economy is proving less sensitive to higher rates than previously believed. Almost half now say the Bank of Canada will raise its benchmark overnight rate, currently 4.5%, between now and September. In the March survey, analysts unanimously said Governor Tiff Macklem’s next move would be a cut.

The Canadian economy started off strong in the second quarter, extending a streak of better-than-expected growth and boosting the likelihood of another Bank of Canada rate hike, Bloomberg News reported. Preliminary data suggest gross domestic product rose 0.2% in April, Statistics Canada reported Wednesday in Ottawa, led by mining, oil and gas, transportation and real estate. That followed a flat reading in the previous month, exceeding expectations for a 0.1% contraction in a Bloomberg survey of economists.

The bankruptcy liquidator in charge of Silicon Valley Bank’s Canadian unit is set to receive offers for its loan book on Monday, and the biggest asset is a loan to e-commerce lender Clear Finance Technology Corp., Bloomberg News reported. Toronto-based Clear Finance, which operates under the name Clearco, is an alternative lender that offers cash advances to e-commerce and software startups. It’s struggling amid the tech sector downturn after its cost of capital jumped. The company has done extensive staff cuts and exited markets outside North America.

Bank of Canada Governor Tiff Macklem suggested April's inflation increase - the first in 10 months - was an anomaly and said consumer prices would continue to come down, prompting markets to pare expectations for another hike, Reuters reported. The central bank has been warning Canadians that rates could go higher. April's unexpected acceleration in inflation to 4.4% from 4.3% in March has some economists forecasting a hike later this year. "Inflation has come down. It is coming down.

Inflation unexpectedly reaccelerated in Canada but core measures continued to ease, potentially giving the central bank room to keep rates on pause as it waits for the tight labor market to cool, Bloomberg News reported. The consumer price index rose 4.4% in April from a year ago, the first increase in the rate of headline inflation since June 2022, Statistics Canada reported Tuesday in Ottawa. That’s faster than the 4.1% gain expected in a Bloomberg survey of economists, and up from 4.3% in March.

Signs of recovery in Canada's housing market after a year-long slump, just as higher borrowing costs are expected to slow much of the rest of the economy, could raise inflation and delay a shift by the central bank to interest rate cuts, analysts said, Reuters reported. The housing market's upturn comes after the Bank of Canada paused its interest rate hiking campaign last month, leaving the benchmark rate at a 15-year high of 4.50% since January.

Former users of the bankrupt Canadian crypto exchange Quadriga CX will soon get a check for 13% of their claim, according to a notice to creditors published late Friday by accounting giant EY, CoinDesk.com reported. Documents from EY shows Quadriga’s estate owes CAD $303.1 million ($222.3 million) across 17,648 claims from creditors, including Canada Post and the country’s tax authority, Canada Revenue Agency (CRA). Filings show that there are 15 claims with a value greater than CAD $1 million, and 28 claims with a value between CAD $500,000 and $999,999.