Tag Archives: prime minister stephen harper
Interest rate rise effects may be sharp
Flaherty ready to tighten mortgage lending rules further
CBC News
Bank of Canada governor Mark Carney repeated warnings to Canadian households and businesses: don’t be lulled by current low interest rates, because repercussions from a hike could be swift.
In a speech to the Economic Club of Canada in Toronto, Carney said efforts by various governments to stimulate the economic recovery are keeping borrowing rates low.
When rates do begin to rise again, Carney said, the repercussions may be fierce and have the potential to catch many with debt loads they can no longer afford.
Both Finance Minister Jim Flaherty and Prime Minister Stephen Harper weighed in with opinions on consumer debt Monday.
Flaherty said he talks with bankers about loan default rates, and “there is reason for concern,” but not “extreme concern.” The government has no plans to take immediate action, he added
Flaherty pointed out that the government has twice tightened mortgage rules, in 2008 and early 2010, and will do so again if it becomes necessary.
But he said the government has to balance the availability of credit, and the impact on employment in the housing sector if rule tightening led to a construction slowdown.
During a visit to Thetford Mines, Que., Harper suggested the situation is the result of individuals’ choices, and the government can’t control how they spend.
“We continue to warn Canadian households that interest rates are unlikely to go down in the future. They’re far more likely to go up, so Canadians should plan accordingly,” he said.
Carney’s warning came the same day Statistics Canada released data showing the ratio of Canadian household debt to disposable income rose to a record high in the three months ending in September.
“Cheap money is not a long-term growth strategy,” he warned.
“Experience suggests that prolonged periods of unusually low rates can cloud assessments of financial risks.”
Hike expected May 31
Flaherty said Canadians should assume rates will rise, “and they should be cautious.”
The Bank of Canada will set interest rates based on inflation, not on whether a large swath of Canadians have taken on too much debt, Carney added.
He suggested the bank may raise interest rates even in a low-inflation environment to discourage risky borrowing.
“While the bar for further changes remains high,” he said, “the bank has the responsibility to draw the appropriate lessons from the experience of others who, in an environment of price stability, reaped financial disaster.”
In a commentary, Benjamin Reitzes, an economist with BMO Capital Markets, wrote: “It appears that as soon as economic conditions allow, Carney & Co. will opt to push rates higher in an effort to keep debt levels from marching ever higher.
“For now, look for bank officials to continue their public warnings in an effort to at least make households aware of the risks of borrowing beyond income bounds,” Reitzes said.
“We expect the bank’s next hike will come on May 31, as the economy regains some momentum in the first half of next year.”
On Dec. 9, the Bank of Canada warned that the risks of another recession are growing, given Europe’s debt crisis, widening gaps between exports and imports among countries, and that Canadians, with their high levels of debt, may not be prepared for it.
Japan’s lost decade
Twice in the speech, he raised the spectre of Japan’s lost decade and even the Great Depression, suggesting some of the problems faced today are as formidable.
“The crisis is not over, but has merely entered a new phase,” he said. “In a world awash with debt, repairing the balance sheets of banks, households and countries will take years.”
“As a consequence,” he said, “the pace, pattern and viability of global economic growth is changing, and Canada must adapt.”
Carney said with currency tensions rising, there is a concern about protectionist measures as occurred during the Great Depression because of the “death grip” of the U.S. dollar as the world’s preferred currency for foreign exchange reserves.
“Over a dozen countries are now accumulating reserves at double-digit annual rates,” he pointed out, “and countries representing over 40% of the U.S.-dollar trade weight are now managing their currencies,” or subtly manipulating them.
The global adjustment means Canadian exports will remain weak, he said, urging firms to improve their competitiveness to meet the challenge.
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Contact the Jeffrey Team for more information – 416-388-1960
Laurin & Natalie Jeffrey are Toronto Realtors with Century 21 Regal Realty.
They did not write these articles, they just reproduce them here for people
who are interested in Toronto real estate. They do not work for any builders.
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Toronto buckles down for some serious, and seriously expensive, hassle
By Sandro Contenta, GlobalPost
The leaders of 20 of the world’s important economies are coming to town, and the residents of this good city are not in a welcoming mood. How could they be?
A sign of the hassles ahead is the security fence that snakes for more than two miles around several downtown city blocks, where the G20 leaders will meet June 26-27. (A day earlier, the more exclusive G8 meets about 140 miles north in a lakeside resort in the cottage-country town of Huntsville, Ontario.)
An estimated 30,000 Torontonians will have to go through security hoops to come in and out of their condos or workplaces inside the fenced-in area. Many business owners have decided it’s easier to just keep their shops closed that weekend. Those immediately outside the 10-foot-high fence are likely to do the same, fearful of the sometimes violent protesters attracted by international summits.
Major theaters and art galleries have also announced they’ll be shutting their doors, and the Toronto Blue Jays, who play in the downtown Rogers Center, have moved their scheduled home series against the Philadelphia Phillies to Philadelphia.
In short, the core of Canada’s biggest city may end up looking like a commercial ghost town. It would make an ironic setting to a summit discussing how to avoid another economic collapse.
And then there is the price tag: Protecting political leaders at both the G8 and G20 summits will cost an astounding $1 billion — a sum that has hit Canadian taxpayers, who are footing the bill, like a vuvuzela blast.
To put this eye-popping amount in some context, security for the Pittsburg G20 summit in September 2009 cost $18 million; security for the London G20 in April that year cost $30 million. Security for the Vancouver Winter Olympics earlier this year — which lasted 14 days — was $900 million.
Here’s some more context: $1 billion is the entire yearly budget for the Toronto police force, plus overtime. $1 billion is what it costs Canada to support its military mission in Afghanistan each year.
Aid groups point to the shocking contrast between the security bill and the Canadian government’s four-year freeze on the level of foreign development aid. Others note that the G8 is $20 billion behind on an aid commitment to Africa made five years ago.
Prime Minister Stephen Harper’s government insists the security price tag is due to the unprecedented holding of two major summits back-to-back. But opposition politicians insist it’s part of a wasteful government track record.
Harper came to power in 2006, defeating a Liberal government that left a $12 billion budget surplus. He proceeded to wipe it out before the recession hit, with tax cuts and lavish spending. It was part of a so far unsuccessful attempt to convince voters that his minority government should be trusted with the absolute power wielded by a majority one.
When the recession came, Harper was forced to billions stimulating the economy. And so, under his economic stewardship, Canadians have come to be burdened with a $56 billion deficit, and are braced for the painful spending cuts that are sure to come.
Adding insult to injury for many taxpayers was news last week of questionable costs beyond security, including $2 million for the interior of a media center that lets the 3,000 journalists covering the G20 experience Canada’s great outdoors, indoors. The pavilion will have an artificial lake, canoes, cottage chairs and the recorded sounds of loons.
Canadians didn’t fail to see the irony: Money was being spent to build a fake lake in a pavilion practically on the shores of a real one — Lake Ontario. Harper’s socialist political rival, Jack Layton, called the affair “Fake Lake-Gate.” Liberal Party leader Michael Ignatieff dubbed it, “Lake Waste-a-ma-taxes.”
Harper defended the pavilion as a chance “to profile Ontario tourism to the world.”
The prime minister has also come under fire for balking at putting climate change on the official G20 agenda (he did so only after public pressure), for lobbying hard to kill a proposed bank tax — supported by the U.S. — to avoid further government bailouts, and for refusing to fund abortion as part of a maternal health initiative in developing countries.
Canada’s public safety minister, Vic Toews, defended the summit, insisting there are “certain things that can only be done face to face.” Yet anyone who has covered these events knows that whatever agreements emerge are largely hammered out by bureaucratic sherpas ahead of time.
So for many Canadians, the questions remain: Why hold a political meeting in the heart of a city if it means transforming it into an armed camp at a cost of $1 billion? Why not hold it on a military base, or a desert island? Why not opt for video-conferencing? Why hold a summit at all?
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G20 traffic and perimeter plans unveiled
Joanna Lavoie – Inside Toronto
Torontonians can expect significant traffic jam ups and a heavy police presence in the city’s downtown core in the days prior to, during, and after the upcoming G20 Summit.
Friday morning, May 28 Toronto Police Service (TPS) – a member of the conference’s Integrated Security Unit (ISU) – unveiled traffic and perimeter plans for the June 26/27 conference.
The ISU, which is also comprised of members of the Royal Canadian Mounted Police (RCMP), the Ontario Provincial Police (OPP), Peel Regional Police, and the Canadian Armed Forces, aims to ensure the safety and security of everyone involved with and impacted by the G20 and G8 summits in Toronto and Huntsville.
The security challenges are especially unique as both summits are being held the same week.
Starting June 7, the ISU will begin erecting an eight- to 10-foot chain link fence that will surround the designated “yellow zone,” bounded by Bay and York streets to the east, Wellington Street West to the north, Windsor Street, Blue Jays Way and Rees Street to the west and Lake Shore and Bremner boulevards to the south. Photo identification will be mandatory for anyone entering this zone from late Friday, June 25 until Sunday, June 27.
A highly secure RCMP zone will also surround the immediate area near the Metro Toronto Convention Centre.
An estimated 40,000 people currently work and/or live in this affected area.
Toronto Police will also set up a “traffic zone” bounded by King Street West to the north, Yonge Street to the east, Lake Ontario to the south, and Spadina Avenue to the west. This secondary zone aims to maintain traffic flow in the area and direct vehicles from the designated security zones.
Some of the other security measures during the G20 may include some TTC route diversions and/or delays on an as-needed basis. Union Station will be open that weekend. Exits to front Street will, however, be prohibited. Vehicular traffic on Front Street near the station will also be restricted.
The underground PATH system will be closed from the evening of June 25 until Monday, June 28.
No parking and no standing bylaws will also be strictly enforced, particularly for the area bounded by Queen Street West to Yonge Street, Lake Shore Boulevard West to Spadina Avenue.
GO Transit and VIA Rail trains will be operating on their regular weekend schedules. The Toronto Islands ferry service will also be running that weekend on its usual schedule.
For safety reasons, homeless people within the yellow zone will be relocated to what the city hopes will become more permanent homes.
Toronto Police may also make use of tear gas and sound cannons for crowd control, if needed. The TPS has also installed 77 additional closed-circuit television cameras for monitoring the G20 Summit.
Supt. Tom Russell, commander of the TPS’ G8-G20 Planning Team, said people shouldn’t necessarily avoid the downtown core during the summit but said it’s a “personal choice” they’ll have to make based on how they anticipate the summit may or may not affect their lives.
“It’s not about shutting the city down… Criminal acts, criminal behaviour (are) a concern to us,” he said, underlining police want to strike a balance between regular life in Toronto and the security needed to host the major international event.
Mayor David Miller, on the other hand, said Torontonians who don’t need to be in the vicinity of the summit should “enjoy another part of our city” that weekend.
Taking a few moments from the Federation for Canadian Municipalities Conference to address the media about the G20 security plans, Miller said the City of Toronto would roll out a comprehensive information campaign to help residents and business owners better understand the conference’s impact. Miller also indicated information is available in the latest edition of the city’s Our Toronto newsletter.
“This is a massive event. It’s probably the largest event of its kind in the world,” he said, noting Toronto has many amazing stories to share with the world.
“I think hosting the G20 is a unique opportunity.”
Pointing to a recent spate of anti-G20 vandalism at several Chinatown-area banks, Miller said protesters are welcome but not those who wreck our city.
“We don’t welcome people who do damage in the city. We do welcome people who do peaceful protests,” he said, adding the city actually preferred the G20 Summit take place on the grounds of Exhibition Place. “I hope it’s not a forerunner of what might happen.”
Queen’s Park has been identified as the official G20 protest area.
The summit is set to especially impact the lives of those living and working in Councillor Adam Vaughan’s Trinity-Spadina ward.
“People in my ward, in particular, I think are going to have a difficult time getting in and out of their condos. I want everyone to realize there’s a local economy, a local culture that doesn’t deserve to be trampled here,” the Ward 20 representative told members of the media following Toronto Police’s security plan press conference.
Vaughan was notably concerned about compensation from the federal government for local residents and merchants whose homes and businesses are damaged as a result of the summit.
“I’m at a loss of words to describe my frustrations,” he said, calling on Prime Minister Stephen Harper to explain the G8 and G20 $1-billion security price tag paid by taxpayers’ dollars.
“We’re trying to get an answer from the Prime Minister. We’re going to continually raise this issue.”
Miller said business owners, like hot dog vendors, facing loss of revenue as a result of the summit can make a claim with the federal government for compensation.
He also said if the government can find $1 billion for G8-G20 security, it should also be able to come up with funds for important infrastructure projects, like the stalled Finch Avenue light rail transit line.
Security plans for the G8-G20 summits are in an ongoing state of flux and are modified on a daily basis.
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Contact the Jeffrey Team for more information - 416-388-1960
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