GATINEAU, Que. — Canada's transport watchdog has slapped four of the country's biggest airlines with $45,000 in fines for violating new passenger protection rules.
WestJet Airlines Ltd. was fined $17,500, Air Canada was fined $12,500, and Air Transat and Porter Airlines were fined $7,500 for breaching federal regulations.
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Doled out by the Canadian Transportation Agency last week, the fines are the first under the country's new passenger bill of rights, which came into effect July 15.
The rules state airlines must display a notice at the check-in desk, self-service kiosks and departure gate that passengers who are denied boarding or whose luggage is lost or damaged may be entitled to compensation.
The regulator says airlines failed to alert travellers to their rights ahead of several flights out of Halifax, Quebec City, Calgary and Edmonton between July 22 and Aug. 7.
Ottawa brought in the new rules to beef up compensation for passengers subjected to delayed flights and damaged luggage. They have been met with blowback from industry — which is challenging the regulations in court — as well as consumer advocates, who say they leave loopholes for airlines to sidestep penalties.
Companies in this story: (TSX:AC, TSX:WJA, TSX:TRZ)
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September 05, 2019 at 11:16PM
The Bank of Canada held firm to its narrative they are prepared to defy any global monetary policy easing and won’t be in any rush to cut interest rates unless they see clear signs of economic deterioration at home.
In a speech a day after a decision in which the Bank of Canada resisted pressure to open the door to monetary policy easing, Deputy Governor Lawrence Schembri said policy makers began their deliberations this week by recognizing the economy had performed better than expected and was probably running at about capacity.
While acknowledging risks to the global economy and the fact that other central banks like the Federal Reserve are lowering rates, Schembri said the Bank of Canada will only conduct policy that suits the country’s own economic conditions, which he said are different from those of the U.S. These include interest rates in Canada that continue to be stimulative and inflation at the 2% target.
“The Bank of Canada will continue to conduct monetary policy appropriate to our circumstances,” Schembri said in Halifax, Nova Scotia. “We will continue to ground our decisions in our policy framework, setting interest rates to achieve our inflation target, mindful of the implications for financial vulnerabilities.”
In his speech, and later in a press conference, Schembri gave no indication the central bank has been considering lower interest rates.
At its decision Wednesday, policy makers left rates unchanged for a seventh straight meeting and surprised markets by asserting current levels of stimulus are still appropriate despite the escalating trade war between China and the U.S.
The Bank of Canada’s reluctance to signal a greater willingness to cut rates is making it an outlier as counterparts around the world ease policy. Investors and analysts had expected more dovish language this week, paving the way for some easing later this year. And swaps trading suggests markets are still anticipating the Bank of Canada will be forced to cut rates as many as two times over the next 12 months, starting with one cut this year.
But Schembri outlined some of the bank’s rationale for seeming reluctant to show its hand on the matter. The Canadian data have surprised positively, and stronger than expected growth in the second quarter means the economy is operating close to its capacity.
“This solid starting point means the economy has a welcome degree of resilience to possible negative economic developments,” Schembri said.
Poloz is 'stalling for as long as he possibly can': Economist
Frances Donald, chief economist and head of macro research at Manulife Investment Management, provides instant analysis of the Bank of Canada's decision to keep its key interest rate on hold at 1.75 per cent. Donald says the central bank is "stalling" for as long as it can but that it will eventually be peer pressured into cutting rates.
Another factor is that interest rates have already been falling in Canada -- for global rather than domestic reasons. The current policy rate in Canada, which Schembri pointed out is below the U.S. rate, continues to support the economy, he said.
The Bank of Canada also seems to be wary of interpreting the recent drop in global bond yields as an indicator of recession, with inverted yield curves more likely a sign that investors see weaker long-term growth, the central bank official said.
Schembri also spent a lot of time in his speech highlighting how inflation in Canada looks to be well-behaved, and would be expected to accelerate if policy makers allowed the economy to grow faster than its capacity.
Underlying inflation pressures have been hovering around 2 per cent since end of 2017, which is consistent with estimates that the economy has been operating close to its potential output for most of the period, Schembri said. That’s one major difference with the U.S., where inflation is below the Fed’s target, Schembri said.
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September 05, 2019 at 11:00PM
A double-digit percentage increase in the number of Greater Toronto Area houses sold last month shows the region’s property market is “quite fine,” according to analysts, as it rebounds from mortgage controls introduced last year that sidelined some buyers.
Housing sales in the GTA rose 13.4 per cent in August compared with the same month a year ago, the Toronto Real Estate Board said in its monthly report. There were 7,711 homes sold versus 6,797 in August 2018, it said.
“The level of activity is almost bang on the 10-year average,” Robert Kavcic, senior economist at BMO Capital Markets, wrote in a research note on Thursday. “The sales-to-new listings ratio looks to be right around 60 per cent (seasonally adjusted), consistent with a very well balanced market.”
Toronto vies with Vancouver as Canada’s most expensive property market nearly a year after federal mortgage regulations were introduced to curtail speculation and rein in prices. The cost of property initially fell in both cities but began to creep up again in Toronto this year as supply hasn’t kept pace with demand while Vancouver’s average prices are still down.
The MLS Home Price Index Composite Benchmark for August 2019 rose by 4.9 per cent on a year-over-year basis, the Toronto board reported. Last month’s average selling price of $792,611 showed a 3.6 per cent increase year-over-year, it said. Condominiums, up 8 per cent from a year ago, jumped the most in price followed by higher density low-rise homes, then detached houses with a 3.1 per cent gain from a year ago, the statement showed.
“The GTA’s strong economy, cultural diversity and internationally recognized quality of life continues to attract newcomers to the region each year,” TREB CEO John DiMichele said in the statement. “However, our housing supply has not kept up with population growth, which has led to pent-up housing demand.”
BMO’s Kavcic said that Toronto prices were firming “in another strong month” and that the country’s central bank didn’t seem concerned about higher prices when it kept the benchmark interest rate at 1.75 per cent for the second consecutive meeting after raising them five times from 2017 to last October.
So far, this is a near-perfect landing from a policymaker’s perspective,” Kavcic said. “And the Bank of Canada didn’t seem too worried yesterday about stoking another positive run.”
However, the Toronto board noted market conditions have become tighter than a year ago because there are fewer new listings – down 3 per cent from August, 2018 – while sales have increased. The board called on government levels to help increase the area’s housing supply and for politicians ahead of next month’s federal vote to state their policies.
“The overall pace of price growth is moderate,” Jason Mercer, the board’s chief market analyst said. “However, if demand for ownership housing continues to increase relative to the supply of listings, the annual rate of price growth will accelerate further. This underpins the importance of solving this region’s housing supply issues.”
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September 05, 2019 at 11:22PM
Fed Chairman Jerome Powell will update the public on his outlook in a discussion Friday with the head of the Swiss National Bank.
Photo:
sarah silbiger/Reuters
Federal Reserve officials are gearing up to reduce interest rates at their next policy meeting in two weeks, most likely by a quarter-percentage point, as the trade war between the U.S. and China darkens the global economic outlook.
The idea of an aggressive half-point cut to battle the slowdown hasn’t gained much support inside the central bank, according to interviews with officials and their public speeches.
While market-determined interest rates have tumbled, signaling a dimmer outlook for growth and inflation, many Fed officials believe that the 10-year U.S. expansion can continue at a modest pace and inflation will gradually rise to their 2% target.
“The economy is in a good place, but not without risk and uncertainty,” said New York Fed President
John Williams
in a speech Wednesday. “Our role is to navigate a complex and at times ambiguous outlook to keep the economy growing and strong.”
An important update on the labor market Friday, plus new readings on retail sales and inflation next week, could reshape officials’ outlook. Fed Chairman
Jerome Powell
will also update the public on his outlook in a discussion Friday with the head of the Swiss National Bank.
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Markets already expect the Fed to cut interest rates modestly at the Sept. 17-18 policy meeting. Investors place a 90% probability on a quarter-percentage-point rate cut and a 10% probability on a larger, half-point cut, according to CME Group.
Mr. Williams, a top lieutenant to Mr. Powell, didn’t push back against those expectations in his speech. Increased uncertainty, he said, called for “vigilance and flexibility.”
Mr. Powell cited weaker global growth, trade uncertainty and muted inflation when he led his colleagues in July to cut interest rates to their current range between 2% and 2.25%. He called the move a midcycle adjustment, adding that it wasn’t necessarily the start of a “long cutting cycle.”
The global growth and trade outlook has deteriorated since July. U.S. government bond yields dropped sharply after President Trump’s decision to increase tariffs on Chinese imports last month. Beijing responded with retaliatory measures, prompting Mr. Trump to announce further increases in tariffs.
Yields on the 10-year Treasury note, which stood at 2.02% after the Fed announced its rate cut on July 31, have fallen to 1.46%, while yields on the two-year Treasury note have dropped to 1.44% from 1.89%.
Global manufacturing data have been soft, and revisions to U.S. economic output and employment data suggested the economy is on a slower track than previously thought.
Officials are set to release new economic and interest-rate projections at the meeting. Officials have stressed that shifts in economic conditions will guide policy changes, meaning they are likely to be open to more stimulus after the next rate cut—just as they were in their postmeeting statement in July.
Mr. Powell has weathered unusual and sustained criticism from Mr. Trump for not moving more aggressively to lower rates. The president last month suggested the central bank leader was a bigger enemy to the U.S. than Chinese President
Xi Jinping.
The Fed chief is weighing mixed advice inside his own institution.
In July, several regional Fed bank presidents were reluctant to cut rates at all, and two formally dissented against the decision.
St. Louis Fed President
James Bullard,
on the other hand, wants the Fed to move rates down more aggressively with a half-point move.
“We have seen a big inter-meeting move in bonds. Markets are expecting a lot less inflation and a lot less growth than the Fed is,” said Mr. Bullard in an interview Wednesday.
“We should take some signal” from bond markets that indicate “our rate is too high,” he said. “I’m nervous that our policy rate is above every other rate. It is not a good place for the Fed to be.”
Because markets have largely priced in an additional quarter-point cut at the Fed’s meeting in late October, Mr. Bullard said he saw little reason to delay, if officials concur with investors’ dimmer growth outlook. “Why not just align that now?” he asked.
Other officials have said the Fed shouldn’t overreact to market signals absent stronger evidence that weakness from the global economy or the manufacturing sector is spreading to the services sector or consumer spending.
Risks facing the U.S. economy are elevated, and it would be appropriate to cut rates aggressively if those risks become reality, said Boston Fed President
Eric Rosengren
in a speech Tuesday.
Federal Reserve chairman Jerome Powell is facing fears of an economic downturn, volatile markets and criticism from President Trump. WSJ's Nick Timiraos explains what pressures weighed on the Fed chief as he headed to this year's annual central bank conference in Jackson Hole, Wyo. Photo: DAVID PAUL MORRIS/BLOOMBERG NEWS
“To date, these elevated risks have not become reality—at least not for the U.S. economy,” said Mr. Rosengren, who was one of the two regional bank presidents who dissented against the July decision to cut rates.
Many analysts see economic output growing at a rate a little above 2% in the third quarter.
Dallas Fed President
Robert Kaplan,
in an August interview, said broad declines in market-determined rates suggested the Fed’s policy stance might be too tight but cautioned against overreacting to those signals by making a half-point cut.
“Monetary policy, in my judgment, did not cause this,” said Mr. Kaplan.
Officials have said the trade fight is complicating policy because it involves making assumptions about hard-to-predict geopolitical risks.
Though there is an argument for the Fed to move aggressively to fight any economic slowdown risk quickly, Mr. Kaplan said the fast-changing trade landscape instead makes him cautious.
“When you have this amount of uncertainty and this frequency of changes, my reaction as a business person is not to speed up—it’s actually a little bit to slow down the cadence of it and maybe take a little bit more time,” said Mr. Kaplan.
Even those who have pushed for more-aggressive moves concede there are limits to how much the Fed may be able to stimulate an economy suffering from weaker business investment related to trade uncertainty.
“Monetary policy is a poor tool to undo the harm of trade war,” said Minneapolis Fed President
Neel Kashkari
in public remarks Wednesday, though he said officials needed to be ready to use that tool anyway.
TOKYO (Kyodo) -- Former Nissan Motor Co. Chairman Carlos Ghosn's first court hearing will take place as early as March, his lawyer said Thursday.
Ghosn was arrested last November and is facing a trial for allegedly underreporting his remuneration and diverting company funds to an investment firm he effectively owns.
