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Central bank hikes rate, says tariffs already in place to have modest impact

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  • OTTAWA — The Bank of Canada raised its benchmark interest rate Wednesday in an economy that it predicts will remain resilient even as it faces an even bigger bite from deepening trade tensions.

    The rate hike was the central bank’s first interest rate move in six months and lifted the trend-setting rate to 1.5 per cent, up from 1.25 per cent. It was the bank’s fourth rate increase over the last 12 months.

    The decision, a move that will likely prompt Canada’s big banks to raise their prime rates, arrived in the middle of a trade dispute between Canada and the United States that’s expected to hurt both economies.

    The bank took the step even as it predicts larger impacts from the widening trade uncertainty, particularly after the United States imposed steel and aluminum tariffs on Canada and Ottawa’s retaliatory measures. The tariff fight, the bank estimated, will shave nearly 0.7 per cent from Canada’s economic growth by the end of 2020.

    However, the bank expects the negative blow of the trade policies recently put in place to be largely offset by the positives for Canada from higher oil prices and the stronger U.S. economy.

    “Although there will be difficult adjustments for some industries and their workers, the effect of these measures on Canadian growth and inflation is expected to be modest,” the bank said in a statement.

    But in addition to steel and aluminum tariffs, Canada is facing a significant trade-related unknown that many believe would inflict far more damage on the economy: U.S. duties on the automotive sector

    U.S. tariffs on the auto sector’s integrated cross-border supply chains would have “large impacts on investment and employment,” the Bank of Canada warned Wednesday in its accompanying monetary policy report.

    The bank, however, didn’t quantify the possible effects of auto tariffs on Wednesday. Governor Stephen Poloz has signalled in the past that he’s focused on data he can measure rather than the impacts of trade policies that have yet to materialize.

    Canadian businesses must also contend with the uncertainty surrounding the difficult renegotiation of the North American Free Trade Agreement, for which talks have stalled.

    The Bank of Canada also has its eye on how widening global trade disputes, including an intensifying battle between the U.S. and China, will affect the world’s economy. It warns that “escalating trade tensions pose considerable risks to the outlook” at the global level.

    Even with the trade issues, the Bank of Canada is now predicting slightly stronger growth for Canada over the next couple of years, according to updated projections it released Wednesday in its quarterly monetary policy report.

    It expects real gross domestic product to grow 2.2 per cent in 2019, up from its April call of 2.1 per cent, and by 1.9 per cent in 2020, compared with its previous prediction of 1.8 per cent. The economy’s growth projection for this year remains at two per cent, the bank said.

    Looking ahead, the bank predicts Canadian growth will continue to see bigger contributions from exports and business investment, which were both stronger than expected in the first three months of the year.

    At the same time, household spending will represent a smaller and smaller share of overall growth due to the dampening effects of higher interest rates and stricter mortgage rules, it said.

    Leading up to the announcement Wednesday, Poloz was widely expected to raise the interest rate following a run of healthy economic numbers, including the Bank of Canada’s own survey on business sentiment, tightened job markets and growth in wages.

    Moving forward, the bank said it expects higher interest rates will be necessary over time to keep inflation near its target, however, it intends to continue along a gradual, data-dependent approach.

    The country’s inflation rate is expected to rise to 2.5 per cent — above the two per cent mid-point of the bank’s target range — due to temporary factors such as higher gasoline prices before settling back down to two per cent in the second half of 2019.

     

    Follow @AndyBlatchford on Twitter

    Andy Blatchford, The Canadian Press



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    Alberta

    Government introduces new auto industry rules to protect consumers

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  • New auto industry rules better protect consumers

    October 25, 2018 Media inquiries

    New rules for vehicle sales and repairs introduce industry-wide standards to protect Albertans and improve business accountability.

    New auto industry rules better protect consumers

    Minister Malkinson, centre, with AMVIC board chair Bill Burnett, right, and business owner Ted Zylstra discussing new consumer protection rules.

    Improvements to the Automotive Business Regulation will create consistent standards to help consumers make more informed decisions and ensure businesses can compete fairly in a trusted automotive marketplace. The new, industry-wide standards come into effect on Oct. 31, 2018.

    “Buying or repairing a car shouldn’t be intimidating. These new rules can give Albertans confidence that they won’t be hit with unexpected costs because they will know exactly what they’re paying for. More transparency is good for consumers and it’s good for Alberta’s many trustworthy auto businesses, too.”

    Brian Malkinson, Minister of Service Alberta

    During the 2017 consultation on consumer protection laws, Albertans identified the need for better protections when buying a car and more transparency when it comes to auto repairs as top priorities.

    These changes respond directly to Albertans’ feedback to help consumers avoid unexpected and unauthorized costs. The new rules will ensure auto businesses:

    • Inform buyers of the history and condition of a vehicle such as the vehicle’s previous use, ownership or details of any damages.
    • Provide a comprehensive bill of sale document at the time of the car sale.
    • Provide written estimates upon request and get consumer’s consent before starting any work.
    • Remove any outstanding liens on a vehicle within seven days of the sale.
    • Remove any advertising about a sold vehicle within 14 days of the sale to ensure consumers are not enticed by low prices that won’t be honoured.

    “A vehicle is a lifeline for so many Albertans, and they deserve to feel confident when repairing or selling one. We welcome today’s announcement, as it prioritizes consumer protection – a mandate that’s been shared by AMA’s Approved Auto Repair Service since 1977.”

    Jeff Kasbrick, vice-president, Government & Stakeholder Relations, Alberta Motor Association

    “Increased transparency in automotive transactions means consumers can feel even more confident in their decisions on how to spend their hard-earned money. AMVIC’s mandate is consumer protection through education and industry regulation, and AMVIC has been working closely with industry to ensure they are ready to comply with the new legislation. These new laws benefit all Albertans by creating a fair marketplace for consumers and businesses alike.”

    Bill Burnett, board chair, Alberta Motor Vehicle Industry Council

    “I think the government’s new legislation is great. It will help protect the consumer while also compelling automotive businesses to be more transparent. At Braeside Automotive, we already provide written quotes and can take pictures of components that we can attach to the quote for our customer. I think these rules will help encourage other businesses to be more innovative, which at the end of the day is good for consumers.”

    Ted Zylstra, owner, Braeside Automotive

    The new rules also support the government’s work to build stronger public oversight of the Alberta Motor Vehicle Industry Council (AMVIC), by transitioning AMVIC to a public agency. This will ensure Alberta has a strong and trusted regulator that is well-positioned to protect consumers and build integrity in the industry.

    Background

    • In December 2017, the government passed A Better Deal for Consumers and Businesses Act. Among the many changes introduced through this act was an increased authority to strengthen oversight of the automotive industry to better protect the interests of consumers and ensure integrity in the industry.
    • AMVIC is responsible for providing consumer protection in the motor vehicle industry. In addition to licensing businesses and salespeople and ensuring there’s a fair marketplace for consumers and businesses, AMVIC is responsible for investigating violations of consumer protection laws.
    • AMVIC will transition to a public agency on Oct. 31. Once in place, AMVIC will be subject to the requirements under the Alberta Public Agencies Governance Act to ensure consumers and industry can have confidence there is strong public oversight of the organization.


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    Alberta

    Black Creek Developments building Canada’s most energy efficient car dealership!

    Black Creek Developments

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  • Red Deer’s new Scott Subaru will feature fuel efficient cars “inside” the most energy efficient car dealership in Canada!  For this project, Black Creek Developments of Sylvan Lake has adopted an extremely rigorous standard of energy efficient practices known as Passive House.   Developed in Germany with hands-on experience in Canada’s harsh climates, Passive House projects take just a fraction of the energy necessary to operate a typical building.  Builders must be specially trained to learn all the necessary techniques.

    Black Creek Developments sent key personnel to a two week course covering the various aspects of the build before starting the Scott Subaru build.  Learn more about this thrilling project in this short video.

    Remember… when this project is complete, there will be a permanent Passive House display in the Scott Subaru showroom.  You be able to stop by to learn about this unique technology anytime.

    Black Creek Development is dedicated to forward thinking construction science.  You can see a demonstration of this Passive House project at the Red Deer Renewable Energy Fair + Workshop coming up October 20th.

    Click here for a link to a terrific article on the incredible Scott Subaru building by Canadian Autoworld.


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    november, 2018

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