Good morning,
The Bank of Canada increased interest rates again yesterday but said that it expects to hold off on further rate hikes, making it the first major central bank to signal an end to monetary policy tightening.
The bank raised its benchmark rate by a quarter of a percentage point, bringing the policy rate to 4.5 per cent, the highest level since 2007. This was the eighth consecutive rate hike in 11 months.
The bank’s decision to announce a “conditional pause” marks a major shift in monetary policy. Over the past year, it has forced Canadian borrowing costs sharply higher to combat runaway inflation. This has hammered the housing market and pushed the economy to the edge of a recession.
- Bank of Canada predicts further dip in home prices after delivering quarter-point rate hike
- David Parkinson: Welcome to neutral-ish: The Bank of Canada’s almost-end to rate hikes
- Opinion: The Bank of Canada did its job: Rising interest rates and inflation look to be ending
Bank of Canada Governor Tiff Macklem takes part in an interview after announcing an interest rate decision in Ottawa, Jan. 25, 2023.BLAIR GABLE/Reuters
This is the daily Morning Update newsletter. If you’re reading this on the web, or it was forwarded to you from someone else, you can sign up for Morning Update and more than 20 other Globe newsletters on our newsletter signup page.
Supreme Court ruling Friday could change how mandatory minimum sentences are handled
The use of imaginary people committing made-up crimes will be at the heart of a Supreme Court ruling this week on the constitutionality of mandatory minimum sentences in certain gun crimes.
Little-known outside the legal world, invented scenarios have helped Canadian courts strike down dozens of mandatory sentences over the past five years – everything from illegal gun possession to drug trafficking outside a school to possession of child pornography.
But now, after a senior Alberta judge urged the Supreme Court to undo 30 years of its own rulings on the subject, the practice of using invented circumstances will be under a microscope tomorrow.
U.S., Germany to send almost 100 tanks to Ukraine; Canada not yet committed
The U.S. and Germany have agreed on a plan to send dozens of tanks to Ukraine as the country prepares for an expected increase in Russian attacks this spring and to launch a counteroffensive of its own.
Canada is considering contributing four or five of its German-made Leopard 2 tanks, according to a senior government official, but has not yet made a decision. The Globe and Mail is not identifying the official because they were not authorized to speak publicly on the matter.
Under the plan, announced yesterday, the U.S. will buy 31 M1 Abrams tanks for Ukraine, and Germany will organize the shipment of 62 Leopard 2s, some of which will be provided by Berlin directly and some from other European countries.
- Russia fires wave of missiles at Ukraine after Kyiv secures tanks
- Life and death in a Ukrainian city on the front line
Got a news tip that you’d like us to look into? E-mail us at tips@globeandmail.com Need to share documents securely? Reach out via SecureDrop
Also on our radar
Vaccine misinformation led to thousands of deaths, report finds: Vaccine hesitancy, fuelled by misinformation and conspiracy theories, led to thousands of unnecessary deaths and hospital stays and cost the health-care system at least $300-million during two COVID-19 waves in 2021, according to a report that highlights the urgent risk to society of such false claims.
Trudeau will present premiers health funding proposal: Prime Minister Justin Trudeau acquiesced to the demands of premiers yesterday and agreed to meet with them in Ottawa next month, where he will present provincial and territorial leaders with a detailed and long-term health-care funding plan.
- Campbell Clark: A health deal is close, and what follows matters more
- Opinion: We have to stop pretending that health care is entirely public
Additional reflections detected in unmarked-graves search: Williams Lake First Nation says it has found another 66 possible burials as part of a widening search for unmarked graves on the grounds of a former residential school, raising the contentious possibility of mass excavations in the near future.
Teenager stabbed on Toronto bus: A teenage boy was left with serious injuries after a stabbing on a public transit bus in Toronto’s west end, police said yesterday, marking the fourth case of violence in five days on the city’s transit system.
Daycare budgets didn’t account for inflation: High food costs have become especially difficult for child-care centres who have had their fees capped under the national Early Learning and Child Care agreement. Unless government funding is adjusted to reflect inflation at the grocery store, some centres are considering cancelling their food programs, or adding it as an extra cost, which advocates say is outside the spirit of the national deal.
Pope condemns anti-homosexual laws: Pope Francis criticized laws that criminalize homosexuality as “unjust,” saying God loves all his children just as they are and called on Catholic bishops who support the laws to welcome LGBTQ people into the church.
Morning markets
World stocks firm: Stocks firmed on Thursday as investors bet that central banks meeting next week will signal a slowdown or even a pause in interest rate hikes for later in the year to make recession less likely and ease pressure on corporate earnings. Just after 5:30 a.m. ET, Britain’s FTSE 100 was up 0.13 per cent. Germany’s DAX and France’s CAC 40 gained 0.22 per cent and 0.61 per cent, respectively. In Asia, Japan’s Nikkei closed down 0.12 per cent. New York futures were modestly higher. The Canadian dollar was little changed at 74.69 US cents.
What everyone’s talking about
Editorial: “Decriminalization [of drugs] is a necessary, but not sufficient, policy to save lives. It’s necessary because the scale of the problem demands all useful policies be deployed. But the change in the law plays only a supporting role in helping people to the goal of seeking treatment and succeeding in recovery.”
Bea Bruske: “Lockdowns, Russia’s attack on Ukraine, convoy occupations and worker walkouts – last year wasn’t easy. We all hope 2023 brings less hardship. Certainly, the last thing Canadians want right now is labour unrest across the country, but the strikes we’re seeing across the Atlantic could be a harbinger for Canada.”
Today’s editorial cartoon
The Globe and Mail
Living better
Control the type of income you earn to save tax dollars
As a taxpayer, learning how to turn highly-taxed income into lower-taxed income is great to know. This is what personal finance columnist Tim Cestnick calls “disguising income.” Let’s look at five clever ways to disguise income to save tax dollars.
Moment in time: Jan. 26, 1979
Wayne Gretzky skates on the ice during an NHL game against the New York Islanders on October 23, 1979 at the Nassau Coliseum in Uniondale, NY.Bruce Bennett Studios via Getty Images
Wayne Gretzky signs with Edmonton Oilers
There was no clown, no pony, no pizza. But there was a giant birthday cake (two 9s combined to form a 99) and champagne and a ceremony in front of a crowd of 12,321 at Edmonton’s Coliseum. It was on this day in 1979 that Wayne Gretzky, who had been acquired from the Indianapolis Racers two months earlier, turned 18 and signed a 21-year personal-services contract with Edmonton Oilers owner Peter Pocklington. The deal – terms not disclosed – was signed at centre ice before the Oilers met the Cincinnati Stingers in a World Hockey Association (WHA) game, and was witnessed by Mr. Gretzky’s mother, father and three younger brothers. Mr. Gretzky, from Brantford, Ont., had been playing against older competition since he was 6 and signing a megadeal that recognized that talent didn’t seem farfetched. “Wayne Gretzky is the greatest young player in the world right now,” Mr. Pocklington said. “One day he’ll likely be the oldest. Edmonton fans deserve the best and in Wayne Gretzky I feel that’s what they’re getting.” Although Mr. Gretzky ceremoniously cut the giant cake, he said he never tasted it. “They took it to the dressing room and one of the guys sat on it.” Philip King
Read today's horoscopes. Enjoy today's puzzles.
If you’d like to receive this newsletter by e-mail every weekday morning, go here to sign up. If you have any feedback, send us a note.