Economic conditions moving in line with expectations

OTTAWA — The Bank of Canada is holding its benchmark interest rate at 0.5 per cent as economic conditions move along largely in line with its expectations.

In making the scheduled announcement Wednesday, the central bank said while the global economy has strengthened, persistent international uncertainty has continued to have a negative effect on business confidence and investment among Canada’s trading partners.

The bank said in a statement that Canada’s growth performance had also been close to its expectations, including a strong rebound in the third quarter. It repeated its prediction that Canada would see “more-moderate growth” over the final three months of 2016.

However, it said Canadian inflation, which the bank carefully analyzes when making rate decisions, was slightly below what it had anticipated, in large part because of lower food prices.

In a closer analysis of economic conditions, the bank also made a point of highlighting recent steps taken by the federal government in an effort to help boost growth.

“Consumption growth was robust in the third quarter, supported by the new Canada Child Benefit, while the effects of federal infrastructure spending are not yet evident in the (gross domestic product) data,” the bank said its brief, one-page statement.

“Meanwhile, business investment and non-energy goods exports continue to disappoint.”

The bank also said Canada saw gains in employment, but that considerable economic slack remained present when compared to the United States.

It also predicted the recent tightening of financing rules for real estate would help slow the continued rise in Canadian household debt.

The decision to maintain the rate was widely anticipated by experts and came ahead of an announcement next week by the U.S. Federal Reserve, which is expected to raise its key interest rate.

Last week, Poloz addressed how the bank views the uncertainty following the U.S. election. He said it was too soon for the central bank to factor president-elect Donald Trump’s election win into its decision making.

This was the bank’s final rate announcement for 2016. Its next decision, which will be accompanied by fresh economic projections, is scheduled for Jan. 17.

In October, the Bank of Canada downgraded its growth outlook and governor Stephen Poloz said its governing council actively discussed cutting the key rate before deciding to keep it on hold.

Last week, a data release showed the Canadian economy had slightly exceeded expectations in the third quarter to grow at its fastest pace in more than two years.

That increase in real gross domestic product by 3.5 per cent marked a rebound from a second-quarter contraction.

Experts had long predicted the economy to bounce back from the second-quarter slump, which was largely due to oil-production shutdowns linked to May’s Alberta wildfires and scheduled maintenance at oilsands facilities.

Just Posted

Alberta energy war room must avoid online morass, preaching to choir: experts

CALGARY — Tzeporah Berman only learned of her cameo appearance at an… Continue reading

Two dead, including one who police believe was a child, in Alberta house fire

PLAMONDON, Alta. — Two people, including one who police believe was a… Continue reading

CSIS destroyed secret file on Pierre Trudeau, stunning historians

OTTAWA — Canada’s spy service destroyed a Cold War dossier on Pierre… Continue reading

Premier refuses to back down on plan to scrap 18,000 immigration applications

Quebec Premier Francois Legault is holding firm on his plan to scrap… Continue reading

Pro-pipelines rally draws crowd to City Hall

Canadian Taxpayers Federation says Canada missing out on billions in revenue

Federal cabinet decision on fate of Trans Mountain pipeline due Tuesday

OTTAWA — The Liberal government’s $4.5 billion gamble to buy the Trans… Continue reading

Skier, 22 dies after fall on Mount Haig near Castle Mountain Ski Resort

PINCHER CREEK, Alta. — RCMP from the Pincher Creek, Alta., detachment are… Continue reading

4 years in, Trump fondly recalls Trump Tower campaign launch

NEW YORK — It was the escalator ride that would change history.… Continue reading

Massive protests draw apology from Hong Kong leadership

Hong Kong citizens marched for hours Sunday in a massive protest that… Continue reading

Butterfly garden keeper manages to film large tarantula shedding exoskeleton

VICTORIA — A 20-centimetre tarantula capable of killing a bird has been… Continue reading

Telegraph-Journal wins 2018 Michener Award recognizing public-service journalism

OTTAWA — The Telegraph-Journal in New Brunswick has been named the winner… Continue reading

Victorious Raptors cancel their return to Toronto after becoming NBA champs

TORONTO — Some Raptors players returned to Toronto on Saturday night for… Continue reading

How a Montreal working-class neighbourhood’s activists changed Quebec and Canada

MONTREAL — The Pointe-St-Charles neighbourhood is isolated from the rest of Montreal… Continue reading

Most Read