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As inflation jumps to 3.3 per cent in July, economists say uptick is bad news for BoC

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Statistics Canada released its July consumer price index report this morning, with a 3.3 per cent inflation rate. The rise in the pace of growth since June was led by gasoline prices. Gas prices are displayed in Carleton Place, Ont. on Tuesday, May 17, 2022. THE CANADIAN PRESS/Sean Kilpatrick

By Nojoud Al Mallees in Ottawa

Canada’s annual inflation rate rose to 3.3 per cent in July, as economists warn the latest consumer price index report spells bad news for the Bank of Canada.

The uptick in price growth comes after inflation tumbled to 2.8 per cent in June, falling within the Bank of Canada’s target range of between one and three per cent for the first time since March 2021.

“There’s no sense sugar coating this one — it is not a good report for the Bank of Canada,” said BMO chief economist Douglas Porter in a note to clients.

Inflation ticked up last month because gasoline prices fell less dramatically on a year-over-year basis than they did in June, Statistics Canada said.

After a significant run-up in energy prices prompted by the Russian invasion of Ukraine, lower gasoline prices have largely driven the decline in inflation over the last year.

Now, other underlying price pressures need to ease for inflation to fall further. Porter notes gasoline prices are on pace to rise by five per cent in August.

The latest report has raised the odds of a rate hike next month, according to forecasters, despite other signs of economic softening, including rising unemployment.

And while Porter still expects the Bank of Canada to stay on the sidelines, he says “the inflation figures will make it a tougher call.”

Excluding energy prices, the consumer price index decelerated to 4.2 per cent, down from 4.4 per cent in June.

Meanwhile, grocery prices rose 8.5 per cent on an annual basis. The federal agency says prices rose more slowly than June’s 9.1 per cent, largely due to smaller price increases for fruit and bakery goods.

Prices for travel-related services also slowed or declined compared to a year ago. Airfare, for example, was down 12.7 per cent since July 2022.

The Bank of Canada expects inflation to hover around three per cent over the next year, before steadily declining to two per cent by mid-2025.

This longer trajectory back to the inflation target prompted the central bank to raise interest rates again in July, bringing its key rate to 5.0 per cent.

The rapid rise in interest rates has fed into higher mortgage interest costs, which Statistics Canada says continue to be the largest contributor to inflation.

Mortgage interest costs posted another record year-over-year increase in July, rising by 30.6 per cent.

The central bank is hoping households facing higher shelter costs due to rising interest rates to pull back on spending elsewhere and thereby slowing inflation.

The Bank of Canada is set to make its next interest rate decision on Sept. 6.

This report by The Canadian Press was first published Aug. 15, 2023.

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CBC’s business model is trapped in a very dark place

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The Audit

 

 David Clinton

I Testified Before a Senate Committee About the CBC

I recently testified before the Senate Committee for Transport and Communications. You can view that session here. Even though the official topic was CBC’s local programming in Ontario, everyone quickly shifted the discussion to CBC’s big-picture problems and how their existential struggles were urgent and immediate. The idea that deep and fundamental changes within the corporation were unavoidable seemed to enjoy complete agreement.

I’ll use this post as background to some of the points I raised during the hearing.

You might recall how my recent post on CBC funding described a corporation shedding audience share like dandruff while spending hundreds of millions of dollars producing drama and comedy programming few Canadians consume. There are so few viewers left that I suspect they’re now identified by first name rather than as a percentage of the population.

Since then I’ve learned a lot more about CBC performance and about the broadcast industry in general.

For instance, it’ll surprise exactly no one to learn that fewer Canadians get their audio from traditional radio broadcasters. But how steep is the decline? According to the CRTC’s Annual Highlights of the Broadcasting Sector 2022-2023, since 2015, “hours spent listening to traditional broadcasting has decreased at a CAGR of 4.8 percent”. CAGR, by the way, stands for compound annual growth rate.

Dropping 4.8 percent each year means audience numbers aren’t just “falling”; they’re not even “falling off the edge of a cliff”; they’re already close enough to the bottom of the cliff to smell the trees. Looking for context? Between English and French-language radio, the CBC spends around $240 million each year.

Those listeners aren’t just disappearing without a trace. the CRTC also tells us that Canadians are increasingly migrating to Digital Media Broadcasting Units (DMBUs) – with numbers growing by more than nine percent annually since 2015.

The CBC’s problem here is that they’re not a serious player in the DMBU world, so they’re simply losing digital listeners. For example, of the top 200 Spotify podcasts ranked by popularity in Canada, only four are from the CBC.

Another interesting data point I ran into related to that billion dollar plus annual parliamentary allocation CBC enjoys. It turns out that that’s not the whole story. You may recall how the government added another $42 million in their most recent budget.

But wait! That’s not all! Between CBC and SRC, the Canada Media Fund (CMF) ponied up another $97 million for fiscal 2023-2024 to cover specific programming production budgets.

Technically, Canada Media Fund grants target individual projects planned by independent production companies. But those projects are usually associated with the “envelope” of one of the big broadcasters – of which CBC is by far the largest. 2023-2024 CMF funding totaled $786 million, and CBC’s take was nearly double that of their nearest competitor (Bell).

But there’s more! Back in 2016, the federal budget included an extra $150 million each year as a “new investment in Canadian arts and culture”. It’s entirely possible that no one turned off the tap and that extra government cheque is still showing up each year in the CBC’s mailbox. There was also a $93 million item for infrastructure and technological upgrades back in the 2017-2018 fiscal year. Who knows whether that one wasn’t also carried over.

So CBC’s share of government funding keeps growing while its share of Canadian media consumers shrinks. How do you suppose that’ll end?

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Can’t afford Rent? Groceries for your kids? Trudeau says suck it up and pay the tax!

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Watch Canada’s Prime Minister tell an anti-poverty group, your ability to buy “groceries for my kids” is less important than sacrificing to pay his carbon tax.

In case you still thought there might be even the tiniest chance Justin Trudeau might come around.. well this settles it. He is as they say, ‘beyond the pale’.

Sure we’ve pieced this together over the last number of years, but it’s still SHOCKING to see him say it directly, proclaim it proudly. This week Trudeau received applause from an audience of the intellectually suffering at something called the “Global Citizen Now” panel discussion on the sidelines of the G20 Leaders’ Summit in Rio.

Much appreciation for the first short video below to Opposition Leader Pierre Poilievre who shared his ferocious reaction to Trudeau’s anti-human comments, challenging the current PM to call an immediate election.

Or course there will be no quick election call. To Justin, it’s more important to cling to the undercarriage of a taxpayer funded jet so he can fly the globe stunning audiences unfortunately already stunned by their utter terror of losing the planet.

In their horror at their inability to turn the switch off and let us all freeze/starve to death this winter, they applaud lovingly for their intellectual leader/sock model as he describes how hard it is to convince angry, hungry people they really need to suck it up.

If only he read a history book.. any history book.. apologies, any book at all. Truly even spending some time with the literary version of an Al Gore video rant would at lest keep JT occupied so he couldn’t speak for a few moments. I’m pretty sure every time he opens his mouth, the temperature in Canada rises as millions of frustrated hotheads (hello there) explode, spewing steam high up into the upper atmosphere where water particles do much more damage to our planet than the final exhaling of a non grocery-eating-planet-loving-Canadian.

Watch Pierre Poilievre’s video and assuage the ensuing headache by mapping out your route to a polling booth. If this doesn’t sell a couple of those ‘Axe the Tax’ shirts for the Poilievre team, well.. enjoy your stroll to the foodbank.

Here’s a link to his entire discussion. If you have a strong stomach and 20 minutes of your life to donate to a higher cause… No silly, not the intended cause of the anti-poverty group… But to the intellectual cause of understanding just how twisted the logic has become for those who fly around the world to wine and dine, only to break long enough to tell us they think it’s perfectly fine if we can’t buy groceries for our kids.

By the way, please save a bit of your shock and disappointment for the hapless host of the ‘anti-poverty’ Global Citizen. This was apparently on the sidelines of a G20 Summit.  I would expect this drivel to be called out at a respectable middle school debate. Apparently the ‘anti-poverty’ Global Citizen people aren’t overly concerned with poverty. Do we need to say that not being able to afford groceries is in fact THE definition of poverty?  Or course not. It would be much easier for them to change their name to Former Global Citizens.

You were warned.

Prime Minister Justin Trudeau sits down for a conversation with Michael Scheldrick, co-founder of the anti-poverty group Global Citizen, on the sidelines of the G20 Leaders’ Summit Rio de Janeiro, Brazil.

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