Canada’s central bank conceded that it misjudged the strength of the economic recovery and reduced its outlook for inflation.
This caused the dollar to dip to a six-month low near 99 cents US as the trend-setting interest rate is likely to remain unchanged for the rest of this year.
The central bank rate is one percent where it has been for more than two years.
“The direction is clear – the timing has shifted,” bank governor Mark Carney said, noting a “less imminent” need to raise rates.
The bank is “less worried” now about high levels of consumer debt and the housing market while inflation will remain around one percent.
Prime Minister Stephen Harper said weaker growth for the global economy is “obviously a concern” and will have an impact on the pace of job creation.
Just two weeks after much of southern Canada had a heat wave with temperatures in the mid-50sF in the Toronto area, a deep chill arrived.
Mid-week overnight temperatures at -40F in the Northwest Territories and Rouyn, Quebec were the coldest in the world.
The wind chill made it feel that cold in Montreal, Quebec City and Ottawa, where it was just -7F in the afternoon on Thursday.
The cold did allow for the opening of a two-mile stretch of the frozen Rideau Canal Skateway in the capital city.
Toronto was -4F overnight on Thursday, warming to 14F in the afternoon, while Churchill, Manitoba had a wind chill of -46F overnight and Vancouver was a balmy 42F by day.
The frigid Arctic air stretched into Atlantic Canada while warming began this weekend.
News in brief
• Attawapiskat Reserve Chief Theresa Spence has ended a “hunger protest” lasting six weeks. She subsisted on a liquid diet to demand a meeting with Prime Minister Harper where they discussed treaty rights and improvements to conditions on reserves. Native protesters held marches and rallies across the country to support the cause.
• Toronto’s Rob Ford will continue in his job as mayor of Canada’s largest city after winning a court appeal on Friday of an earlier ruling that would have ousted him from office. A panel of three judges overturned the earlier decision by Judge Charles Hackland to have Ford removed for violating the municipal conflict of interest act.
Facts and figures
The Canadian dollar was lower Friday at 99.10 U.S. cents while the U.S. greenback returned $1.0090 in Canadian funds before bank exchange fees.
The Bank of Canada’s key interest rate is 1 percent while the prime-lending rate is 3 percent.
Stock markets are mixed, with the Toronto exchange index up at 12,825 points and the TSX Venture index lower at 1,226 points.
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• The Canadian and Ontario governments are providing $33.8 million for Toyota to boost production of Lexus vehicles in Cambridge, Ontario. The plant will hire an additional 400 workers to produce 26,000 more Lexus RX350 sport utility vehicles a year including 15,000 hybrid models. Toyota is spending $100 million to increase production to 100,000 vehicles a year at the plant that employs 4,500 workers.
• Vancouver Police Chief Jim Chu said he supports the creation of a regional police force across British Columbia’s Lower Mainland. This was a key recommendation in the inquiry into Robert Pickton who is serving a life sentence for killing prostitutes. Area mayors have been divided over a unified force. Inquiry commissioner Wally Oppal said lack of cooperation by police forces helped Pickton evade capture for years.
• The Supreme Court has agreed to hear the case of Quebec fisherman Real Vallee who faces a $1.2 million repair bill. He cut an underwater communications cable with a saw to free his gear worth about $250. Lower court judges said Vallee was reckless and is responsible for the bill.