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Good morning,

For the past year, central banks including the Bank of Canada have fought to get inflation under control with single-minded determination. Over the past week, they’ve added a second task: stopping contagion from spreading through the global financial system after the collapse of Silicon Valley Bank and the emergency takeover of Credit Suisse.

These two roles will be in conflict in the coming days, with the U.S. Federal Reserve and the Bank of England scheduled to announce interest-rate decisions on Wednesday and Thursday respectively.

Inflation remains worryingly high, arguing in favour of additional monetary policy tightening. But interest-rate hikes could spook an already skittish banking system, particularly as the problems at U.S. regional banks and at Credit Suisse were caused, to a significant degree, by the historic pace of rate increases over the past 12 months.

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The Bank of Canada building is pictured in Ottawa on Tuesday, Dec. 6, 2022.Sean Kilpatrick

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Federal budget to focus on clean economy, support for low-income Canadians, Freeland says

The federal government will “invest aggressively” in clean technology, Finance Minister Chrystia Freeland said yesterday during a prebudget event in which she outlined the main themes of the economic plan she will deliver next week.

At a time when the U.S. government is spending billions through programs and tax breaks to spur the use of electric vehicles and clean energy, Freeland said it would be “reckless” if Canada failed to also take action.

Yesterday’s speech is the latest in a series of public remarks in which the Finance Minister has provided broad outlines of the March 28 budget. She has previously said that accounting for the recently announced increase in health transfers to the provinces will be a key element. Her comments add to earlier signals that the budget will include measures in response to green technology incentives contained in the Inflation Reduction Act approved last year in Washington.

Health Minister’s interference on drug-price reforms led to resignations, ex-board member says

A former board member of Canada’s drug price regulator is challenging Health Minister Jean-Yves Duclos’s assertion that it failed to consult with him on price reforms, saying the behaviour of the minister’s office led to division and caused several resignations.

The Patented Medicine Prices Review Board, an independent, quasi-judicial body responsible for protecting Canadians from excessive drug costs, had been preparing new, long-awaited guidelines when Duclos asked for the suspension last November – a move that policy experts say may have permanently derailed the process.

It’s unusual for ministers of health to make such requests of the PMPRB. The move has led to the resignation of two board members and the executive director, and will be the subject of committee hearings in Ottawa next month.

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Also on our radar

Actions to stave off climate breakdown urgent, UN report says: While there remains an opportunity to minimize the harm caused by fossil fuel emissions, it will take urgent action during this decade to seize that chance and spare every region of the globe from experiencing the most serious consequences of a dramatically warmer world, officials behind a United Nations report said yesterday.

Ukraine hints it hit Russian missiles in Crimea: Ukraine’s military intelligence agency reported what appeared to be a brazen attack yesterday on Russian cruise missiles being transported by train in the occupied and illegally annexed Ukrainian Crimean Peninsula.

Trudeau to push Biden on Buy America in first official visit: The Trudeau government is hoping to push Joe Biden on his Buy America policies and for progress on the issue of irregular migration from the U.S. into Canada in the President’s first official visit this week.

Quebec to introduce legislation on illegal short-term rentals: Quebec plans to introduce new legislation cracking down on illegal short-term rentals in the province after a massive fire in a Montreal building containing Airbnb units left one dead and at least six missing last week.

Assassinations push South Africa toward mafia-state status: A wave of targeted killings and attempted assassinations in South Africa’s business and government sectors has triggered widespread predictions that the country is becoming a mafia state where corruption is enforced by violence.

Morning markets

World markets gain: Global shares rose on Tuesday, after the rescue of Credit Suisse arrested a rout in bank stocks, but signs of stress in the financial system are making investors wonder if another lender may deliver a nasty surprise, and how central banks might respond. Around 5:30 a.m. ET, Britain’s FTSE 100 was up 1.41 per cent. Germany’s DAX and France’s CAC 40 advanced 1.43 per cent and 1.42 per cent, respectively. In Asia, Hong Kong’s Hang Seng finished up 1.36 per cent. Markets in Japan were closed. New York futures were positive. The Canadian dollar was fairly steady at 73.13 US cents.

Today’s editorial cartoon

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Editorial cartoon by Brian Gable published March 20, 2023.Illustration by Brian Gable

Living better

What EV should I buy as a second car to drive around town?

Whether you live in a big city or a small town, an electric vehicle can be a good option if you’re looking for a new car. Globe Drive columnists Petrina Gentile and Mark Richardson on what to look for when shopping for an EV.

Moment in time: March 21, 1978

Open this photo in gallery:Executive vice-president Dave Nichol is marshalling Loblaws' house labels and generics in the fight for space on supermarket shelves, May 23, 1986. Photo by Dennis Robinson / The Globe and Mail.

Originally published June 9, 1986

Executive vice-president of Loblaws Dave Nichol, May 23, 1986.DENNIS ROBINSON/The Globe and Mail

Loblaw launches innovative No Name brand

Loblaw president Dave Nichol was looking for a way of appealing to consumers at a time of high inflation. Inspired by a line of unbranded products launched by a French grocery store two years earlier, Loblaw launched its No Name brand on this day in 1978. There were just 16 items under the No Name banner, all of them packed in black and yellow. The pitch was simple: “Basic products in plain packaging at down-to-earth everyday low prices.” Loblaw said No Name products could save customers between 10 and 40 per cent over other brands thanks to using basic packaging and its “task force” that negotiated bulk orders. The brand proved to be a massive success. The first No Frills store would open later that summer. The number of different No Name products had grown to more than 500 by 1982. Today, the No Name product line has grown to more than 2,900. Just like in the beginning, Loblaw is once again promoting the brand to consumers as a way of saving money during a time of high inflation. And once again, it’s working: Loblaw reported more than half a billion dollars in earnings in its latest quarterly report. Dave McGinn

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