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Bank of Canada

Thursday December 15, 2022

December 15, 2022 by Graeme MacKay

Editorial Cartoon by Graeme MacKay, The Hamilton Spectator – Thursday December 15, 2022

Household debt levels could cripple economy, economist warns

November 3, 2022

Canadian household debt levels have increased enough to spark a recession when combined with interest rate hikes, says one economist, after Statistics Canada released its latest report Monday.

Jim Stanford, the director of the Centre for Future Work, said the debt levels are high enough that, as interest rates rise, disposable income ordinarily spent on consumer goods is being used to pay debt.

“Chances are you’re going to see an increased interest bite from household budgets equal to about two or three per cent of GDP,” he said. “That alone is enough to put the economy into a recession, let alone the other impacts on business investment, for example.”

The standard definition of a recession is when the country’s gross domestic product (GDP) contracts for at least two quarters.

Household consumption accounts for more than 50 per cent of Canada’s GDP, Stanford said, making it the biggest single contributor to economic growth.

Stanford said $16 billion in additional interest payments made over three months is worth more than half of a percentage point of Canada’s GDP.

Statistics Canada’s new figures show for every dollar of disposable income in the third quarter of 2022 there was $1.83 in credit market debt. The figure is a slight increase from the previous quarter and up from $1.77 last year.

Thursday September 8, 2022

The figures come as the Bank of Canada has continued to raise its key policy rate. Last week it hiked the key policy rate another 50 basis points to 4.25 per cent in an effort to fight inflation.

Mortgage payments also hit Canadians hard with interest payments expanding by more than 16 per cent, which is the largest increase on record, according to the StatsCan report.

“It’s certainly hard evidence that the rising interest rates are wreaking havoc with household finances,” Stanford said. “We’ve never seen an interest shock like that to Canadian households before.”

He said he expects the situation to worsen in the coming months.

On Monday, Bank of Canada governor Tiff Macklem defended the interest rate hikes in Vancouver in front of the Business Council of British Columbia. He said they are working and the country needs to stay the course.

“If we under-tighten, inflation is going to stay too high. Canadians are going to have to continue to endure the hardship of higher inflation,” Macklem said.

He said the bank was surprised at how international events, like the Russian invasion of Ukraine and supply chain issues powered inflation.

He said such trends will make it more difficult to bring inflation down than it has been in the past. (The Toronto Star) From sketch to finish, see the current way Graeme completes an editorial cartoon using an iPencil, the Procreate app, and a couple of cheats on an iPad Pro … These sped up clips are posted to encourage others to be creative, to take advantage of the technology many of us already have and to use it to produce satire. Comfort the afflicted. Afflict the comforted.

https://mackaycartoons.net/wp-content/uploads/2022/12/2022-1215-NATshort.mp4

 

Posted in: Canada Tagged: 2022-42, Bank of Canada, Canada, christmas, debt, Economy, inflation, procreate, recession, Santa Claus, spending, Tiff Macklem

Friday October 28, 2022

October 28, 2022 by Graeme MacKay

Editorial Cartoon by Graeme MacKay, The Hamilton Spectator – Friday October 28, 2022

Freeland warns of ‘difficult days ahead’ as Canada’s economy shows sign of weakness

Finance Minister Chrystia Freeland issued a warning to Canadians Wednesday — the coming months won’t be pretty as rising interest rates slow a once red-hot economy and force some people out of their jobs.

June 17, 2022

The Bank of Canada’s recent rate hikes to tame sky-high inflation will increase borrowing costs for businesses and consumers alike, which will send shockwaves throughout the economy, Freeland said.

Speaking at an auto industry conference in Windsor, Ont., Freeland said she would be honest with Canadians about the roadblocks that lie ahead and the threat of higher unemployment and mortgage rates — developments that could hurt many households.

“Our economy will slow. There will be people whose mortgage rates will rise. Businesses will no longer be booming. Our unemployment rate will no longer be at its record low. That’s going to be the case in Canada. That will be the case in the U.S. and that will be the case in economies big and small around the world,” Freeland said.

“There are still some difficult days ahead for Canada’s economy. To say otherwise would be misleading.”

January 27, 2022

The Bank of Canada — like other central banks, including the U.S. Federal Reserve — has been aggressively raising rates this year to establish price stability and achieve its 2 per cent inflation target.

With inflation so sticky, economists are expecting more rate hikes to reduce demand and cool the economy. That could prompt a recession sometime in 2023.

While inflation has slowed somewhat in recent months as energy prices have stabilized, Freeland said the government will not be able to help everyone ride the inflationary wave.

“We cannot compensate every single Canadian for all of the costs of inflation driven by a global pandemic and Putin’s invasion of Ukraine,” Freeland said.

But she promised relief for the poorest Canadians who are most vulnerable to sudden spikes in the cost of food and rent.

June 22, 2021

During question period in the House of Commons on Wednesday, Conservative Party leader Pierre Poilievre said the federal Liberal government’s “half-trillion dollar inflationary deficits” over the past two fiscal years are responsible for the higher costs.

Pointing to the planned low-income supports, Poilievre said the prime minister has done “nothing for the vast majority of struggling families.”

“Even the small minority who do [receive the supports] will find it gobbled up by increased inflation,” he said, citing a recent RBC Royal Bank report that found the average family will lose $3,000 in purchasing power this year as a result of higher prices and interest rates.

He called on the government to scrap planned hikes to the federal carbon levy — something Poilievre has called a “triple, triple, triple tax” that will drive food prices higher because it will impose added costs on all parts of the supply chain.

August 12, 2022

In the face of Tory criticism, Freeland said the federal government will continue to tighten its belt in the coming months so that Ottawa doesn’t inadvertently drive inflation.

“Canadians are cutting back on costs and so too is our government. That’s our part … to not make inflation worse and more enduring,” she said.

Asked later by reporters if the government has more inflation relief planned, Freeland said now is a time for fiscal restraint. (CBC) 

 

Posted in: Canada Tagged: 2022-36, Bank of Canada, Canada, Economy, growth, inflation, interest, Justin Trudeau, mortgage, rate, Rental and Dental, vice

Friday May 13, 2022

May 13, 2022 by Graeme MacKay

Editorial Cartoon by Graeme MacKay, The Hamilton Spectator – Friday May 13, 2022

Pierre Poilievre’s inflation disinformation

April 26, 2022

For every serious, stubborn and complicated problem, there’s an ambitious politician peddling a bogus plan to fix it. And if you need any proof, just listen to Pierre Poilievre’s simplistic explanation for runaway inflation, and then his troubling proposal for saving the economy. The narrative being spun by this federal Conservative leadership hopeful is that the Bank of Canada’s leadership is “financially illiterate” and its incompetence punished the country with the worst inflation in three decades. As prime minister, he would sort the bank out, pronto. And to make sure that happens, he announced at a leadership debate Wednesday that if he forms the government, he would fire Bank of Canada governor Tiff Macklem.

Posted in: Canada Tagged: 2022-17, Bank of Canada, Canada, convoy, economics, freedom, Pierre Poilievre, the Apprentice, Tiff Macklem, trucker, vaccines

Thursday January 27, 2022

January 27, 2022 by Graeme MacKay

Editorial Cartoon by Graeme MacKay, The Hamilton Spectator – Thursday January 27, 2022

Despite record high inflation, Bank of Canada holds interest rate steady — for now

May 2, 2020

The Bank of Canada has decided not to raise its benchmark interest rate just yet.

Like many other central banks around the world, the bank slashed its core lending rate — known as the target for the overnight rate — at the onset of the pandemic in March 2020, to ensure that consumers and businesses had access to cheap lending in order to keep the economy afloat.

But two years of rock-bottom lending rates have been a major contributor to inflation, which rose to almost five per cent in Canada last month — its highest level in more than 30 years.

Posted in: Canada Tagged: 2022-04, architecture, bank, Bank of Canada, Canada, covid-19, Economy, interest rate, monster, Omicron, pandemic, Tiff Maclem

Saturday May 2, 2020

May 9, 2020 by Graeme MacKay

Editorial Cartoon by Graeme MacKay, The Hamilton Spectator – Saturday May 2, 2020

Tiff Macklem to lead the Bank of Canada

Finance Minister Bill Morneau has appointed Tiff Macklem, the former senior deputy governor of the Bank of Canada, to take over the top job at the central bank as it navigates the uncertainty of a pandemic-driven recession.

February 11, 2009

Macklem is currently the dean of the Rotman School of Management in Toronto, but had spent decades with the Bank of Canada before starting that appointment. 

Macklem began his career at the bank in 1984. He was widely expected to win the contest for bank governor in 2013, but was beaten out by Stephen Poloz, who was then CEO of Export Development Canada.

Poloz’s term ends June 2. 

The transition to new leadership comes as millions of Canadians have signed up for government aid and companies big and small are relying on federally backed wage subsidies to weather the COVID-19 pandemic.

During Friday’s announcement, Morneau said he’s confident Macklem’s expertise in financial markets will help the central bank navigate an economic crisis never before seen in Canada.

Coronavirus cartoons

“The bank has to be humble about what it doesn’t know. There’s a lot we don’t know about this disease. There’s a lot that medical experts don’t know about this disease,” Macklem said during his unveiling in Ottawa.

“But the Bank of Canada has tremendous analytic economic financial capacity to analyze what’s going on in the economy, and the important role for the Bank of Canada is to provide Canadians with as much information as it can honestly provide as to what is happening and what the recovery could look like, recognizing that we’re probably going to have to look at more than one scenario.”

In the past months, Poloz and Morneau have appeared at several joint news conferences to show a co-ordinated approach on monetary and fiscal policy to deal with the economic fallout of the pandemic and global oil shocks.

Morneau has announced more than $250 billion in direct financial aid, credit support and tax deferrals to help offset the impact of the COVID-19 pandemic. (CBC) 

 

Posted in: Canada Tagged: 2020-15, Bank of Canada, Canada, cinema, Coronavirus, covid-19, Economy, film, horror, Incredible Shrinking Man, marquee, movie, pandemic, theatre, Tiff Macklem
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Please note…

This website contains satirical commentaries of current events going back several decades. Some readers may not share this sense of humour nor the opinions expressed by the artist. To understand editorial cartoons it is important to understand their effectiveness as a counterweight to power. It is presumed readers approach satire with a broad minded foundation and healthy knowledge of objective facts of the subjects depicted.

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