Politics Briefing newsletter: Bank of Canada rate hike will reverberate

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Good morning,

0.75. That's the new benchmark interest rate for the Bank of Canada after the central bank announced a rate hike for the first time since 2010, citing "bolstered" confidence in the Canadian economy following years of hampered growth in the wake of The Great Recession and tumbling oil prices. The benchmark rate, also known as the overnight lending rate or the policy rate, is the rate at which Canada's banks can borrow from the central bank. When that changes, other interest rates in the economy shift in response.

The trickle down effect has already begun: The Big Six (RBC, TD, Scotiabank, BMO, CIBC and National Bank) have moved in step with the central bank, raising their prime lending rates to 2.95 per cent from 2.7 per cent. Most variable-rate loans are based on the prime rate, meaning things like variable-rate mortgages, home equity lines of credit and other lines of credit will all be affected. A higher interest rate will also mean that investors looking to park their money in Canadian assets will get a higher return on their investments. In Western Canada, especially in oil-dependent Alberta, the rate hike adds to regional economic woes.

The Globe's personal finance columnist Rob Carrick has broken down the five harsh realities that rising rates have on borrowers and savers. We've also built an interactive calculator that examines how the rate hike will affect your mortgage. This is just the beginning -- many are expecting that there will be more rate hikes this year as the Bank begins nudging Canada's economy away from an era of abnormally-low interest rates. The Bank expects Canada's economy to grow 2.8 per cent this year, 2 per cent in 2018 and 1.6 per cent in 2019, when Canada has its next federal election.

This is the daily Politics Briefing newsletter, written by Chris Hannay in Ottawa and Mayaz Alam in Toronto, with James Keller in Vancouver. If you're reading this on the web or someone forwarded this email newsletter to you, you can sign up for Politics Briefing and all Globe newsletters here. Let us know what you think.

CANADIAN HEADLINES

Prime Minister Justin Trudeau will name former astronaut Julie Payette as Canada's next governor-general this afternoon. Ms. Payette, a Montreal native who is fluently bilingual in Canada's official languages and also speaks Spanish, Italian, Russian and German, will be the Queen's representative in Canada. She was the first Canadian astronaut to board the International Space Station and operated the Canadarm while in space. Her nomination would continue the tradition of alternating between francophone and anglophone governors-general.

Families involved in the inquiry into missing and murdered indigenous women continue to express concern with how the process is unfolding after one of the five commissioners quit this week. "Why can't the rest of the commissioners accept that this isn't working and that they really need to take a look at themselves and understand that there's no trust and if there is, there's very, very little from very few families?" said Beverley Jacobs, a former president of the Native Women's Association of Canada.

The federal lobbying and ethics watchdogs say they will look into a tech lobby group's pitch to clients that they could promise access to a senior Liberal aide.

The Federal Court has struck down a government bid to strip citizenship from 300 people, caught in a sweep against people who allegedly obtained their citizenship fraudulently, in an expedited process.

Vancouver's Grouse Mountain Resorts is expected to be sold soon to a Chinese investor, demonstrating the country's continued appetite for major Canadian real estate.

And a fledgling political party in Vancouver is using a by-election this fall to put forward a high-profile housing activist to challenge Mayor Gregor Robertson's party. The by-election, set for October, will fill a vacancy left by the resignation of Geoff Meggs, who's been hired by NDP premier-designate John Horgan. Judy Graves is running for the OneCity party, which was formed just before the 2014 election. With candidates like Ms. Graves, who worked for the city on housing issues for years, the new party is hoping to offer a viable alternative to disenfranchised Vision supporters.

Campbell Clark (The Globe and Mail) on the Magnitsky Act: "In Washington, the question about whether Donald Trump Jr.'s meeting with a Russian lawyer signalled a willingness to collude with Moscow is dominating U.S. politics. But in Canada, it is worth taking note of the issue that was discussed at that meeting, because it is an issue here, too. ... Setting aside questions of collusion, this tale provides another glimpse of the Russian desire to fight Magnitsky laws. And as it happens, one is before the Canadian Parliament right now. And oh, how the Russians hate it."

Konrad Yakabuski (The Globe and Mail) on NDP leadership candidate Jagmeet Singh and Quebec: "If Quebeckers are uncomfortable with a private citizen displaying her religion, what are the chances they would ever elect a prime minister whose faith – a minority one, to boot – defines him?"

Andrew MacDougall (The Globe and Mail) on Trudeau and Khadr: "Mr. Trudeau can rest assured Andrew Scheer's Conservatives will jump on every angle – no matter how tangential – if it means they can rub Mr. Trudeau's nose in his decision. They smell blood and have public opinion on their side (for now). Maddeningly for Mr. Trudeau, there isn't much he can do to mitigate any of this fallout. All that can be done is to ride out the wave of discontent at the settlement and hope the issue fades from the national consciousness."

Rona Ambrose (Maclean's) on advice for women considering politics: "At times, I have been mocked, dismissed, insulted, threatened (including with sexual violence), underestimated, cyber-bullied, sexually harassed, disrespected and ignored because of my gender. So when I hear a young woman say that she is not 'ready', I get it. But my response is the same: none of the negative experiences outweigh the incredible opportunity to change the lives of people that need your help. And you are not alone. I have also experienced overwhelming support, encouragement and advocacy from men and women in my life who were ready to champion women's leadership. If you have the passion, then you are worthy, and you are ready now."

Anna Lennox Esselment (Policy Options) on the permanent campaign: "There is little doubt that political parties in Canada have embraced permanent campaigning. They are under pressure to grow their databases, fundraise, reach out to new and diverse voter groups, and undermine their opponents at any opportunity. Every political activity is viewed through the lens of winners and losers, and tools that can provide electoral leverage are put to use. It could be said that it has always been so, but in the past there was not the sense of calculated purpose as there is today."

INTERNATIONAL HEADLINES

The U.K. will publish legislation today that severs its political and legal ties with the European Union. The Repeal Bill, which follows last year's Brexit referendum, provides a mechanism for EU law to be changed into U.K. law and to repeal the original legislation that made Britain a member of the economic union. The bill's passage through parliament will be a defining test for Prime Minister Theresa May's tenure as she continues to lead a minority  government.

Former Brazilian President Luiz Inacio Lula da Silva, who had remained a popular figure in Brazil despite having left office in 2011 , has been sentenced to nearly 10 years in prison. He was eyeing a political comeback and was considered by some to be a contender for the Brazilian presidency next year. Mr. Silva was Brazil's first working-class president and enjoyed sky-high approval ratings when he left office. Current Brazilian President Michel Temer is facing corruption charges.

U.S. Secretary of State Rex Tillerson is in the Middle East to help resolve the situation in Qatar. Mr. Tillerson was in Saudi Arabia on Wednesday and will be in Qatar Thursday. Saudi Arabia and other nations have severed economic and political ties with Qatar.

And a California Democrat launched a longshot bid to impeach U.S. President Donald Trump. We've broken down what impeachment would look like, if it comes to that, but in the past it has proven to be a long and arduous process that imposes a significant amount of stress on the political system.

Simon Waldman (The Globe and Mail) on Turkey, a year after a failed coup: "Turkey's opposition considers the crackdowns a purge of the government's opponents, but for Mr. Erdogan and the AKP government, justice is being served.To understand the meaning of justice for Mr. Erdogan and the AKP, one needs to set aside notions such as equality, fairness or the rule of law. Instead, they seek to right past wrongs and reshape Turkish society to represent the interests of its conservative and religious support base, for decades marginalized and suppressed."

Lawrence Martin (The Globe and Mail) on the White House's credibility: "His credibility and that of his administration has taken a crippling hit. Media outlets have found that the president and his associates denied no less than 20 times that their campaign team had any contact with Russians seeking to influence the presidential election. For those who still believed that it's the media who have have been lying to the American people and not the Trump administration, their faith has to have been profoundly shaken this week."


Eliza Anyangwe (The Guardian) on Macron and Africa: "The test of Macron's presidency is his foreign policy, particularly on Africa. At the moment he's doing a fine job of proving he is cut from the same cloth as every leader who has come before him: adopting a paternalistic tone and happy to moralise, while profiting from the carnage France helped create – to which, at best, he turns a blind eye."