Evening Update: Bank of Canada hikes interest rates by another half percentage point, says it is ready ‘to act more forcefully’

Good evening, let’s start with today’s top stories:

The Bank of Canada announced another oversized interest rate hike on Wednesday and said that it is “prepared to act more forcefully” going forward in an effort to bring inflation back under control.

The central bank’s governing council voted to raise the policy rate by half a percentage point – its third interest rate hike this year. That brings the benchmark rate to 1.5 per cent, just a quarter point below the pre-pandemic level.

The bank said that more interest rate hikes will be needed to cool Canada’s overheating economy and to slow the pace of consumer price growth, which hit a three-decade high of 6.8 per cent in April.

“With the economy in excess demand, and inflation persisting well above target and expected to move higher in the near term, the governing council continues to judge that interest rates will need to rise further,” the bank said in its rate announcement statement.

Read more:

• How real estate investors and speculators helped trigger the onslaught of soaring interest rates
• Reality check: What can politicians really do about high food prices?
• Bank of Canada has raised its benchmark interest rate to 1.5 per cent. Here’s what that means for Canadians

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Tim Hortons violated law in tracking people with app even when it was not in use, privacy watchdogs say

Canada’s largest fast-food chain violated privacy laws by tracking people who used its app hundreds of times a day – even when the app was not in use.

That is the result of a joint investigation by Canadian privacy officials into Tim Hortons’ surveillance of customers through an app installed on millions of mobile phones in this country. But while the coffee-and-doughnuts chain will have to make changes to its privacy practices, it faces no fines or financial penalties for the breach.

The investigation, first launched in 2020, found that the app’s permissions “misled many users” by suggesting that it would only gather their information while in use. Even though Tim Hortons has said that it scaled back on tracking users’ locations in 2020, privacy officials found that the company’s contract with its third-party location services supplier contained language that could have allowed the company to sell de-identified location data. This carries a risk that such data can be re-identified and linked to individuals.

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The close calls during Ontario’s 2018 election could tell us a lot about which key ridings to watch this week

In the last Ontario election, roughly one in five ridings had slim margins of victory where the difference between the elected candidate and the runner-up was less than five percentage points. Many of these close calls are still races to watch for the 2022 election.

Ming Wong and Jeff Gray crunched the numbers and found that in some ridings, the margins were quite significant – think local hockey-rink capacities. In others, the vote difference between winning and losing can be boiled down to your fellow commuters on the bus.

Here are what some of these slim margins from 2018 look like, using examples from everyday life.

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ALSO ON OUR RADAR

Canadian company Xanadu achieves “big leap forward” in quantum computer race: Toronto startup Xanadu Quantum Technologies, one of several companies trying to harness the ephemeral nature of quantum physics to revolutionize the computer industry, has hit an elusive milestone with a device that can outperform any supercomputer in the world at a specific task.

Shanghai leaves lockdown after two months, but “zero COVID-19″ policy remains: Some 22 million residents, about 90 per cent of the population, who live in low-risk areas that have been declared infection free for two-weeks were permitted to leave their compounds this week. Moving around the city freely will require showing a negative PCR test taken within the last 72 hours, however, and regular testing will remain in place for the foreseeable future.

U.S. to send “crucial” precision rockets to Ukraine as Russian forces advance in east: Russian forces on Wednesday pressed closer to the centre of an industrial city in a drive to grab a swathe of Eastern Ukraine, while the United States said it would supply advanced rockets to Kyiv to help push Moscow to negotiate an end to the war.

Flair Airlines to continue flying after regulator approves changes solidifying its Canadian ownership: The Canadian transportation regulator will allow Flair Airlines to continue flying passengers after approving a list of changes the Edmonton-based carrier proposed to adhere to domestic laws and loosen the grip of its U.S. investor.

Trudeau is proposing a national freeze on handguns in Canada. Here’s everything to know about Bill C-21 so far: On Monday, the federal government announced new firearms-control legislation, Bill C-21, amid intense debate about gun safety on both sides of the Canada-U.S. border. Here’s everything that is known about the new bill so far.

Sheryl Sandberg, longtime No. 2 exec at Facebook, steps down: Sheryl Sandberg, the No. 2 executive at Facebook owner Meta Platforms Inc., is stepping down, according to a post Wednesday on her Facebook page. Sandberg has served as chief operating officer at the social media giant for 14 years. She joined from Google in 2008, four years before Facebook went public.

Jury sides with Johnny Depp on lawsuit, Amber Heard on counterclaim: A jury on Wednesday awarded Johnny Depp more than $10-million in his libel lawsuit against ex-wife Amber Heard, vindicating his stance that Heard fabricated claims that she was abused by Depp before and during their brief marriage.

Listen to Stress Test: Mortgage 101: Everything you need to know about mortgages right now

MARKET WATCH

North American stock markets closed lower to start June amid rising interest rates and fears of persistently hot inflation.

The S&P/TSX composite index closed down 15.62 points to 20,713.72.

In New York, the Dow Jones industrial average was down 176.89 points at 32,813.23. The S&P 500 index was down 30.92 points at 4,101.23, while the Nasdaq composite was down 86.93 points at 11,994.46.

The Canadian dollar traded for 79.12 cents US compared with 79.06 cents US on Tuesday.

The July crude oil contract was up 59 cents at US$115.26 per barrel and the July natural gas contract was up 55.1 cents at US$8.70 per mmBTU.

The August gold contract was up 30 cents at US$1,848.70 an ounce and the July copper contract was up 3.3 cents at US$4.33 a pound.

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TALKING POINTS

Canada’s intractable gun-crime issue: Our geographic neighbour

“When something unconscionable happens, even when it’s in another part of the world, there is a very natural impulse to want to do something – anything – so that something similarly horrific doesn’t happen again, or happen here. So the charitable interpretation of the government’s timing in tabling Bill C-21 is that Prime Minister Justin Trudeau and his cabinet yielded to this very human desire for action in the wake of unfathomable tragedy. The less generous interpretation speaks to the lowest form of political depravity.” – Robyn Urback

With decriminalization, the B.C. government has acknowledged what experts knew all along

“For decades, drug users have been stigmatized as bad people – common criminals with records to prove it. The criminalization of drug use has also intersected with systemic racism – Indigenous people and people of colour in Canada are overrepresented in drug charges, incarcerations and the criminal justice system as a whole.” – Gary Mason

We can no more force a prisoner to serve 150 years than we can execute him six times

“By overturning that Harper-era amendment, then, via last week’s ruling in the case of R. v Bissonnette, the Supreme Court has not invented some new or bizarre legal theory. It has simply restored ancient common-law principles of justice, not to say common sense, to Canadian sentencing. It is the law, not the ruling, that is radical.” – Andrew Coyne

The decriminalization of hard drugs in B.C. falls short. But it is a step in the right direction

“Beginning next year in B.C., at least if you are holding less than 2.5 grams, you can begin to feel like we as a society are finally doing what we have falsely claimed we have done for decades: treat addiction as the health care issue it is. This will not end the overdose crisis, but it will save lives.” – Travis Lupick

LIVING BETTER

Five things to know about hot-weather workouts

Alex Hutchinson don’t want to jinx anything, but he thinks it’s finally safe to put away the balaclava. For the next few months, the big challenge during outdoor exercise will be staying cool.

Hot-weather workouts can be challenging, but they also have some surprising advantages. Hutchinson writes five things to know about the science of summer exercise.

TODAY’S LONG READ

The Queen’s Platinum Jubilee celebrates the monarch’s 70 years on the throne. What to expect ahead of the four-day June holiday

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Britain is getting ready for a four-day party this week to celebrate the Queen’s Platinum Jubilee and commemorate her 70 years on the throne. It’s a celebration like no other for the 96-year-old monarch. More than 2,700 events have been planned across Britain from June 2 to June 5, ranging from hundreds of community tea parties to a couple of drag queen bingos and a punk rock festival. Pubs will be open longer, bells will ring out and there will be plenty of kitschy souvenirs for sale.

Paul Waldie writes about what to expect for the four-day bacchanal.

Evening Update is written by Emerald Bensadoun. If you’d like to receive this newsletter by e-mail every weekday evening, go here to sign up. If you have any feedback, send us a note.