Canada

The Canadian economy gained strength at the end of last year, fueled by a rapid series of interest-rate cuts, as the northern nation braces for the Trump administration’s threatened 25% tariffs, Bloomberg News reported. Advance data suggested gross domestic product grew 0.2% in December, Statistics Canada said Friday. That’s a reversal from a 0.2% decline in November, the largest monthly contraction since December 2023 and weaker than a median estimate of a 0.1% drop from economists in a Bloomberg survey.

The Bank of Canada on Wednesday cut its benchmark rate for a sixth straight time, and warned of a significant shock to the economy from a U.S.-Canada trade conflict with tariffs of up to 25%, the Wall Street Journal reported. Bank of Canada Gov. Tiff Macklem said the central bank would be limited in offsetting the damage from a trade row, because policymakers would have to wrestle with both weaker growth and higher prices. The central bank sets interest rates to achieve and maintain 2% inflation.

The Canadian government said Friday it would provide extraordinary financing to Canada Post to avoid insolvency at the state-owned mail service, the Wall Street Journal reported. The bridge financing totals 1.03 billion Canadian dollars, or the equivalent of $720 million, and will be provided on an as-needed basis to pay obligations. The government said Canada Post will fall below its necessary operating cash requirements this year. “Providing this cash injection will prevent insolvency and ensure the continuity of postal services,” the government said.

Toronto-Dominion Bank is looking to sell about $9 billion of residential mortgage loans as the Canadian lender adjusts its balance sheet to comply with a new cap imposed by US regulators, part of a plea agreement reached last year for its role in failing to prevent money laundering, Bloomberg News reported. The portfolio for sale consists of so-called jumbo mortgages taken out by US homeowners with relatively high credit scores, according to people familiar with the matter. Bids on the pool are due next week, the people added, asking not to be named because the details are confidential.

For the first time since 2019, Canadian inflation stayed within the central bank’s target range for a full year, a mark of achievement for policymakers ahead of a potential tariff war that threatens to derail their progress, Bloomberg News reported. The consumer price index ended 2024 with a second consecutive monthly deceleration, rising 1.8% on a yearly basis in December, down from 1.9% previously, Statistics Canada reported Tuesday. The median estimate in a Bloomberg survey of economists was for a 1.9% gain.

The Bank of Canada says the bar for using exceptional monetary policy tools like quantitative easing and extraordinary forward guidance “should remain very high,” after reviewing its response to the Covid-19 pandemic to inform how it reacts to future crises, Bloomberg News reported. In a suite of documents released Friday, the central bank offered a wide-ranging review of its handling of the economic shock brought on by the novel coronavirus in early 2020. The report comes as US President-elect Donald Trump threatens tariffs that would likely tip Canada into a recession if enacted.

As Christmas holiday bills arrive, nearly half of surveyed British Columbians are "teetering on the edge of financial insolvency," with 31 per cent saying they're already unable to pay their bills, TodayinBC.com reported. These figures appear in the latest MNP Consumer Debt Index, which finds a "sharp increase" of nine per cent to 46 per cent among British Columbians, who are less than $200 from not being able to pay their bills and debt payments each month. This increase wipes out the nine percent improvement from the last report.