Inflation And Rising Costs Archives

Uncertainty sparks rate pause by Bank of Canada

April 17, 2025/in BizNews This Week, Global Uncertainty, Inflation And Rising Costs/by Jim Zeeben

After seven straight interest-rate cuts buoyed the spirits of businesses and individuals managing debt, it seems economic uncertainty has become a double-edged sword.

The Bank of Canada announced today that its target rate will remain at 2.75%, after inflation came in at 2.3% in March.

The reasoning for the pause was to provide a buffer for the future, which, ironically, had also been cited as a reason to continue to reduce rates. Lower interest rates spur consumer and business spending — good if we’re facing a downturn — but lower rates could also cause inflation to increase, which would be bad.

“Monetary policy cannot resolve trade uncertainty or offset the impacts of a trade war,” the Bank said. “What it can and must do is maintain price stability for Canadians.”

The Bank’s Governing Council said risks to the Canadian economy include:

reduced demand for Canadian exports
lower business investment, employment and household spending
and cost increases being quickly passed on to consumers.

Businesses bear burden of loosening sick day rules

April 17, 2025/in BizNews This Week, Fair Rules, Finding And Keeping Workers, Government Provincial, Hospitality And Tourism Rescue And Recovery, Inflation And Rising Costs, Safe Communities/by Jim Zeeben

A cost to employers rooted in the pandemic is now further ingrained in law after the provincial government moved to ban the requirement for doctor’s notes when employees take sick days.

“Businesses would have liked to have had more of a say on this policy,” Chamber CEO Bruce Williams said. “It’s one thing for the public sector to make this a requirement for its employees, but to force it on the private sector overlooks a lot of concerns we hear from members.”

Organizations understand the benefit of supporting their workers, especially in Greater Victoria with one of the lowest unemployment rates in Canada. During the pandemic, employers went to great lengths to support staff who were ill as well as to keep workers safe from infection. However, legislating paid sick days is a cost that is not covered by government. This additional burden on business adds up, especially at time when many organizations are facing lower margins.

“Most Chamber members I talk to have great relationships with their staff and go out of their way to help when needed,” Williams said. “But many are rightfully concerned that this change will create confusion and could incentivize abuse of the rules and potentially force employers to provide more paid days off work.”

Canada escapes crosshairs as US takes aim at foreign trade

April 2, 2025/in BizNews This Week, Chamber Awareness, Global Uncertainty, Government Federal, Inflation And Rising Costs/by Jim Zeeben

Businesses watching today’s tariff announcements from the US administration can be forgiven for feeling more confused than ever. Canadians have been coping with economic anxiety for months due to threats of broad-based tariffs and other measures.

However, on the day that US President Donald Trump promised to unveil his master economic plan for world trade, Canada was barely mentioned.

“At this point, I don’t think anyone is surprised that today’s announcement did not provide a lot of clarity,” Chamber CEO Bruce Williams said. “We’ll take some time to analyze what official information is available and what it means for Greater Victoria.”

The initial impression is that Canadian goods under CUSMA will not face tariffs, while goods not covered will have a 10% tariff. It’s also not clear how Canada’s auto industry will actually be affected by a tariff on foreign auto makers.

Greater Victoria’s economy is among the least exposed Canadian cities when it comes to exporting. However, the sabre rattling that comes with talk of a tradewar creates uncertainty, which can bog down business.

“We will get through this, as we have every other crisis in the past, by supporting each other and our communities any way we can,” Williams said. “If there is a silver lining, we do have certainty that we have work to do to build the nation we want. We need an economy that is resilient and sustainable.”

To hear more about how the Canada-US relationship affects our region’s economy, register now for The Chamber’s AGM and panel discussion on April 15.

Consumers get break as BC eliminating carbon tax April 1

March 26, 2025/in BizNews This Week, Business And Economic Strength, Chamber Awareness, Climate Change Solutions, Global Uncertainty, Government Federal, Government Provincial, Inflation And Rising Costs/by Jim Zeeben

Energy costs are set to go down starting April 1 as the province announced yesterday it will make good on its promise to eliminate the consumer carbon tax after the federal government promised to do the same.

BC’s tax adds about 17 cents per litre at the gas pump, and 15 cents per cubic metre of natural gas.

“The Province will continue to act on the commitment to battle climate change by ensuring people in British Columbia have affordable options to make sustainable choices and by encouraging industry to innovate,” the BC Ministry of Finance said in a statement.

Eliminating the tax will help businesses and individuals facing increasing costs and economic uncertainty due to the threats of tariffs and tradewar with the US.

The latest news on the tradewar is a 25% tariff on the auto industry imposed today. The action is expected to increase the cost of vehicles and cause generational chaos to automakers on both sides of the border.

The national Chamber network continues to work on mitigating the threat of tariffs. This week, the Canadian Chamber released a report on US cities that are the most export-dependent on Canada.

Bank drops interest rate, citing trade war uncertainty

March 12, 2025/in BizNews This Week, Global Uncertainty, Inflation And Rising Costs/by Jim Zeeben

The Bank of Canada made another cut to interest rates today, lowering the overnight rate to 2.75%.

“The Canadian economy entered 2025 in a solid position, with inflation close to the 2% target and robust GDP growth,” the Bank said in a media release. “However, heightened trade tensions and tariffs imposed by the United States will likely slow the pace of economic activity and increase inflationary pressures in Canada.”

The Bank has conducted research into how Canadian businesses and households are reacting to the tradewar. Not surprisingly, people say they plan to be more cautious with spending and are worried about job security. Businesses are revising sales outlooks, while also trying to tie into the wave of “buy Canadian” sentiment sweeping the country.

“Monetary policy cannot offset the impacts of a trade war. What it can and must do is ensure that higher prices do not lead to ongoing inflation,” the Bank said.

New report offers insight into Canadian real estate

March 5, 2025/in BizNews This Week, Finding And Keeping Workers, Housing, Inflation And Rising Costs/by Jim Zeeben

What do the current events of 2025 mean for Canada’s real estate industry? There’s no crystal ball to foretell the future, but the expert prognosticators at Doane Grant Thornton have put together some thoughtful insights in their 2025 Real Estate market summary. The report looks at key trends, including the political winds blowing north from south of the border as well as the state of capital markets and impact of AI.

You can read about various asset classes and more at doanegrantthornton.ca.

BC Budget 2025 attempts to tackle trade war’s unknowns

March 5, 2025/in BizNews This Week, Chamber Awareness, Global Uncertainty, Government Provincial, Inflation And Rising Costs/by Jim Zeeben

The best news from yesterday’s BC Budget 2025 announcement was a promise from the provincial Finance Minister to work more closely with businesses going forward.

As is tradition, the minister met with the Greater Victoria Chamber of Commerce today to discuss the budget.

Brenda Bailey, a former tech sector entrepreneur, was elected to government in 2020 and appointed Finance Minister in November 2024. Her first budget day was overshadowed by news that the United States was moving ahead with a trade war on Canada.

Bailey acknowledged the curveball, noting that the budget was put together with tariffs in mind. There is also $4 billion in contingency funds set aside annually for three years to address unforeseen challenges. It’s a strategy that makes sense, but one business groups will be watching closely.

“We want to see policies that are looking at the horizon, that are investing in making our private sector bigger, growing our economy,” Chamber CEO Bruce Williams said. “We’re fortunate to live in a region with a diverse economy that is relatively sheltered from a trade war. That said, we know we’re in for challenging times ahead as Canada will be impacted by tariffs.”

In response to the US’s tariff announcement, the Canadian Chamber issued a statement saying the trade war will hurt Americans and have disastrous impacts on people in many US cities.

“Canada is resource and talent rich. Our economic future is ours to determine — it’s time to join our economic strategy with concrete action to not only minimize the short-term damage but to chart a more prosperous path long-term,” Canadian Chamber president and CEO Candace Laing said.

Read the Full Media Release

Food prices drop for first time since 2017: CPI at 1.9%

February 19, 2025/in BizNews This Week, Global Uncertainty, Inflation And Rising Costs/by Jim Zeeben

Canada’s inflation rate ticked up slightly in January, to 1.9%.

“The (tax) holiday gave Canadians a bit of a break on prices for alcohol, food and clothing — enough to bring restaurant prices down for the first time since 2017,” Canadian Chamber economist Andrew DiCapua said. “However, that relief was overshadowed by higher energy prices which kept overall inflation pressures elevated.”

The Bank of Canada had forecast inflation to come in at 1.7% in January, which likley indicates it will not cut interest rates at its March 12 meeting, DiCapua said.

“Despite our working assumption that rates should be lowered to neutral (around 2%) by Summer 2025, the Bank will likely pause rates at their next meeting to evaluate the effects of their monetary policy.”

Tariff threat on hold, but clock ticks for new plan for Canada

February 5, 2025/in BizNews This Week, Chamber Awareness, Global Uncertainty, Inflation And Rising Costs/by Jim Zeeben

Businesses were quick to respond to the imminent threat of US tariffs, with calls to support local and buy Canadian.

Now that the trade war has been “paused,” it’s clear we need to be better prepared in case US President Donald Trump does impose crippling tariffs on Canadian products.

Chamber CEO Bruce Williams has been speaking to local media about efforts to support local businesses and analyze what the chaotic trade talk might mean.

“I think the concerning part, for a lot of people, is the uncertainty as to whether or not it’s going to happen. And, if so, what is it going to look like? And will the Americans come to an understanding that it’s damaging to them as well as to us,” Chamber CEO Bruce Williams told CHEK News in January.

The national Chamber network is calling for a multi-partisan approach to develop an “all-in” strategy. Canadian Chamber President Candace Laing said unity is vital so we can “address critical roadblocks that have left Canada too dependent on trade with the United States.”

Priorities of the All-In Plan:

Make it easier to trade within Canada to build our economy and resilience from within
Build modern trade infrastructure to get Canadian goods overseas
Reduce red tape for businesses held back by piled up paperwork
Lower taxation so businesses can compete globally while diversifying trade relationships.

“Businesses have durable relationships, which will chart a secure, prosperous future, but Canada’s leaders need to get back in gear for it to work. When Canadians and Americans see Parliament closed, they see a rudderless ship,” Laing said. “We need to send a strong message to President Trump and the world that we will rise to this occasion, as a unified Canada. Tariffs tomorrow instead of tariffs today still leave businesses, workers and families in the lurch. $3.6 billion in trade every day hangs in the balance.”

Bank cuts interest rates again as uncertainty remains

January 29, 2025/in BizNews This Week, Chamber Awareness, Global Uncertainty, Inflation And Rising Costs/by Jim Zeeben

This morning, the Bank of Canada reduced its target for the overnight rate to 3%. The Bank also said it was ending quantitative tightening, starting gradually in early March.

Economic projections are more fuzzy now than they typically are because of the shifting political landscape, particularly the threat of US tariffs.

“With inflation around 2% and the economy in excess supply, Governing Council decided to reduce the policy rate a further 25 basis points to 3%. The cumulative reduction in the policy rate since last June is substantial. Lower interest rates are boosting household spending and, in the outlook published today, the economy is expected to strengthen gradually and inflation to stay close to target,” the Bank stated. “However, if broad-based and significant tariffs were imposed, the resilience of Canada’s economy would be tested. We will be following developments closely and assessing the implications for economic activity, inflation and monetary policy in Canada. The Bank is committed to maintaining price stability for Canadians.”