Bank of Canada holds rate, suggests more hikes likely at more cautious pace

By Andy Blatchford

THE CANADIAN PRESS

OTTAWA _ The Bank of Canada left its benchmark interest rate unchanged Wednesday following two straight hikes but suggested future increases are still likely, albeit at a more gradual pace.

In its scheduled announcement, the central bank said it held off this time in part because it expects the recent strength of the Canadian dollar to slow the rise in the pace of inflation.

To make its case, the bank also pointed to the substantial, persistent unknowns around geopolitical developments as well as U.S.-related fiscal and trade policies, such as the renegotiation of the North American Free Trade Agreement.

Governor Stephen Poloz has introduced two rate hikes since July at consecutive policy meetings in response to the economy’s impressive run over the last four quarters. The increases removed the two rate cuts introduced in 2015 as insurance following the collapse in oil prices.

The bank suggested Wednesday that it will stick to its rate-hiking trajectory, although at perhaps a more-tentative pace.

“While less monetary policy stimulus will likely be required over time, governing council will be cautious in making future adjustments to the policy rate,” the bank said in a statement.

The bank stressed it will pay particular attention to incoming data to assess four areas: the unfolding impact of higher interest rates on indebted households, the evolution of the economy’s capacity, wage growth and inflation. Its next rate announcement is set for Dec. 6.

Later Wednesday, Poloz told reporters that almost any departure from the bank’s projections on these four issues would be fodder for deeper discussion about the trend-setting rate.

“We must be open. We can be surprised in either direction relative to our forecast,” Poloz said. “But we need to be extremely interpretive of those movements.”

Poloz reiterated his recent comments that each policy meeting is “live.”

The central bank also released updated projections Wednesday that forecast economic growth to moderate after Canada’s powerful performance, particularly since the start of the year.

It now expects real gross domestic product to slow from its robust annual pace of 3.1 per cent this year to 2.1 per cent in 2018 and 1.5 per cent in 2019.

The economy expanded at an annual rate of 3.7 per cent in the first three months of 2017 and 4.5 per cent in the second quarter. The bank’s latest outlook now predicts real GDP to grow at an annual rate of 1.8 per cent in the third quarter and 2.5 per cent in the final three months of 2017.

“Real GDP growth is expected to moderate to a still-solid pace close to two per cent … over the second half of the year,” the bank said.

The bank forecasts declining contributions from residential investment and consumption, which largely fuelled Canada’s recent growth spurt. These changes will largely be consequences of higher borrowing rates, higher household indebtedness and policy measures aimed at cooling hot real estate markets, the report said.

The bank provided an estimate for the economic impact of incoming guidelines to reinforce mortgage underwriting practices, which were announced recently by the Office of the Superintendent of Financial Institutions. The changes, which will take effect next year, are expected to trim 0.2 per cent from GDP by the end of 2019, the bank said.

Moving forward, the bank said economic activity will advance on a “more-sustainable” trajectory led by rising foreign demand, recent increases in commodity prices, still-low borrowing rates and government infrastructure spending. It also projects steady growth in business investment, which rebounded in early 2017.

The weaker-than-expected rollout of federal infrastructure spending will provide a smaller boost for the economy in 2017 than the bank had anticipated. The commitments, however, are expected to lift growth over the coming quarters, the report said.

Poloz was asked Wednesday about the potential economic impacts of the Trudeau government’s announcement this week that it would enhance its child-benefit program so payments to families with kids start rising with the cost of living next July, two years earlier than Ottawa had initially promised.

The change will lower government revenues by $5.6 billion over five years, the government estimates.

Poloz declined to comment on the specifics of the government’s announcement, but he did credit the introduction of the original program last year as a “significant contributor” to the economy. He said the child benefit lifted GDP growth for a year by 0.5 per cent.

“As for the change, at the moment, it doesn’t sound anywhere near as large as what was done last year,” said Poloz, who added the bump in growth from the child benefit was likely only felt in the program’s first year.

“In real terms, it’s maintaining it.”

When the weather outside is frightful: safe driving tips for winter conditions

SGI: News Release – Nov. 1, 2017

Winter is coming, but winter driving conditions are already here. When roads are icy and swirling snow reduces visibility, it can be intimidating for drivers. Here are some tips to keep you and yours safe out on the roads this winter:

  • Clear snow from your vehicle, including headlights and taillights, and be sure your windows are completely defrosted before you drive.
  • Slow down. Posted speed limits are for ideal driving conditions. Adjust your speed accordingly when conditions are less than favourable, like when roads are icy or there is low visibility.
  • Leave more distance between your vehicle and the one in front of you, so you have more time to stop. SGI recommends at least a four-second following distance.
  • Give yourself extra time to get to your destination so you’re not tempted to drive too fast for road conditions.
  • Turn on your headlights at night and any time visibility is poor, since some vehicles do not have taillights on when daytime running lights are being used.
  • Don’t use cruise control in slippery conditions.
  • Invest in a set of winter tires, which provide improved traction on winter road surfaces.
  • Buckle up. Every time.

Lastly, be sure to check the weather forecast and the Highway Hotline (1-888-335-7623) before you set off on your travels. If travel isn’t recommended, stay off the roads.

Driving in a blizzard

Keep an emergency travel kit in your vehicle in case you get stranded. The kit can include warm clothes, a shovel, blankets, a snow brush, ice scraper, booster cables, flashlight, flares, matches, a candle and a tin cup (to melt snow for water) and food like chocolate, granola bars, dried fruit, nuts or soup mixes that can be added to water.

Unfortunately, taking precautions against blizzard conditions doesn’t mean you can prevent them. If conditions deteriorate while you’re on the road, stop at the nearest town or rest area and wait until it’s safe to drive.

If you find yourself stranded with your vehicle:

  • Remain inside your vehicle because it will offer you protection from the harsh winter elements.
  • Run your engine sporadically to get some heat but be careful not to run out of gas. In that case, the blankets, candles and matches you packed in your roadside emergency kit will serve you well.
  • When running your engine, ensure that your vehicle’s exhaust pipe is clear of snow and ice. If it’s plugged, fumes will seep into your vehicle, resulting in possible carbon monoxide poisoning.
  • If you find you need fresh air, your best option is to slightly lower the windows facing opposite the wind direction and open your vehicle’s heater vent.

Slow to 60

If an emergency vehicle (police, fire, ambulance) is stopped on the side of the road with its lights flashing, you must slow to 60 km/h, unless you’re driving on the opposite side of a divided highway. The same rule applies for tow trucks at the side of the highway with amber or amber and blue lights flashing.

Failing to slow down puts emergency workers and other motorists at risk of serious injury or even death. What’s more, you’ll face a fine of $140, plus $2 for every kilometre over the 60 km/h speed limit. If a driver is over 90 km/h, the fine increases to $4 for every kilometre over the 60 km/h speed limit.

If snow plows are working the roads, give them room to work, and stay back when you approach the mini-blizzard they create. They travel slower than the average vehicle, so be patient. Snow plows will pull over at regular intervals (every 10 km or so) to allow vehicles to pass.

Car seat safety

Have a little one travelling with you? SGI recommends you dress your child in thin, warm layers or a light jacket with a blanket overtop, instead of a bulky snowsuit or winter gear. If there is anything thick between the straps and the child – for example winter clothes, a bunting bag, a pad or blanket – the seat stops working like it’s designed and crash tested to work.

A good test to determine if the child’s winter jacket is too bulky is to buckle your child in the car seat with the jacket on. Then, take your child out of the car seat, take off their jacket, and see how loose the straps are. Remember that you should only be able to fit one finger between the strap and the child’s chest.

No matter what season it is, every driver and passenger should always wear a seatbelt, avoid driver fatigue, and never drive impaired. SGI reminds drivers to refrain from habits that cause distracted driving like using a hand-held cellphone, eating or grooming.

Ed Dubrovsky appointed Managing Director of Cyber Breach Response by Cytelligence Inc.

Ed Dubrovsky, a 24-year veteran of information security, has been appointed Managing Director, Cyber Breach Response, by Cytelligence CEO Daniel Tobok.

Mr. Dubrovsky will manage Cytelligence’s cyber security teams assigned to respond to client emergencies, to deal with the range of cyber threat actors from independent hackers, to industrial spies, to organized crime rings, and state-sponsored threat actors. Read Mr. Dubrovsky’s bio here.

“Cyber security is now one of the top risks for all organizations. I believe that cyber security must be strategic, resilient, scalable, and cost-effective for organizations to achieve their business goals,” said Mr. Dubrovsky.

His areas of expertise include: incident response; strategic information security planning; securing enterprise infrastructure; application security; penetration and vulnerability testing; and research and education.

Cytelligence, the elite force of global cyber security, now employs over 60 cyber security experts including investigators, security specialists, forensic specialists, and ransomware specialists. Cytelligence also has a number of “white hat” hackers with very advanced cyber skills that help companies to proactively test their security using so-called “penetration testing.”

“Cyber security has exploded as a critical service, both as an emergency service and a proactive service for companies to secure their information and web infrastructure, for one very simple reason: the number of cyber criminals has exploded, too,” said Mr. Tobok.

“Ransomware and phishing are the attack vector of choice for cyber criminals. Ransomware is the perfect crime. It is anonymous, decentralized, digital, scalable, and uses cryptocurrency which is heavily encrypted,” said Mr. Tobok. Read his bio here.

The range of Cytelligence clients in critical industries includes:  financial institutions, including banks, brokerage, and insurance firms; law firms; oil & gas facilities; refineries & petrochemical industry; power generation and transmission; research and development; software and technology companies; telecommunications; airports, seaports, trucking and transportation hubs; defense & homeland security; and water utilities.

Cytelligence is headquartered in Toronto and serves clients in Canada, the U.S., and Europe.

SOURCE Cytelligence Inc.

Social media a top priority for P&C brokers Economical survey reveals

Canadian P&C insurance brokerages prefer Facebook to communicate with customers and prospects, say 90% of respondents to a social media survey conducted this summer by Economical Insurance. 61% of respondents use LinkedIn and just over half share over Twitter.

These are some of the learnings from responses from nearly 300 insurance professionals in P&C brokerages across Canada about the use of social media in their companies.

The majority of brokerages surveyed acknowledge the value of social media in creating an engaging customer experience, and 85% of respondents agree that organizations with an engaging social media presence have a competitive advantage over those that don’t.

A key insight from the survey is an indication of the business objectives that drive social media activities by brokerages in Canada:

“Social media is helping change the way Canadian P&C insurance brokers engage with customers,” said Michael Shostak, Senior Vice-President and Chief Marketing Officer at Economical Insurance. “Brokers are using social media in a variety of ways, from generating new leads and sales, to providing customer service. But it’s early days and as an industry, we haven’t yet fully realized the potential of the medium. Our survey tells a story of an industry that desires change, yet lacks the time, resources, and knowledge to implement an effective social media strategy.”

“Most brokers recognize there’s value in having a strong social media presence,” said Naheed Somji, Senior Social Media Specialist at Economical Insurance. “The top spenders agree that an engaging social presence gives an organization a greater competitive advantage.”

To download the report of the survey results, go to 2017 Pulse Check: Social Media Usage in the Canadian Insurance Industry.

About Economical Insurance
Founded in 1871, Economical is one of Canada’s leading property and casualty insurers, with more than $2.2 billion in annualized premium volume and more than $5.5 billion in assets as at June 30, 2017. Based in Waterloo, this Canadian-owned and operated company services the insurance needs of more than one million customers across the country. Economical conducts business under the following brands: Economical Insurance, Economical, Western General, Economical Select, Perth Insurance, Sonnet, Petsecure, Economical Financial, and Family Insurance Solutions.

SOURCE Economical Insurance

For further information: Doug Maybee, Manager, Public and Media Relations, Economical Insurance, (T) 519-570-8249, (C) 519-404-0989

Related Links

www.economical.com

Abandoning a boat in Canadian waters will no longer be legal

By Mia Rabson

THE CANADIAN PRESS

OTTAWA _ There will be no more free passes for boat owners who dump dirty, old hulks in Canadian harbours and waterways.

Transport Minister Marc Garneau’s new Wrecked, Abandoned or Hazardous Vessels Act, introduced Monday in the House of Commons, would make it illegal to abandon boats, while empowering the government to go after the owners of the 600 derelict vessels already polluting the country’s waterways.

Individuals who abandon a boat can face fines up to $300,000 and a six-month jail term, while corporations can be fined as much as $6 million.

Now, owners who dump and run from decrepit vessels are not subject to any penalties and some see abandonment as the cheapest, easiest route when a boat is no longer operational, Garneau told a news conference.

“This has to stop,” he said.

Abandoned boats are an environmental hazard, sometimes sitting for years in harbours or abandoned along coast lines with fuel still in their tanks _ “a blight on the countryside,” as Garneau put it.

The legislation, which was promised as part of the federal government’s Oceans Protections Plan, brings into Canadian law the Nairobi International Convention on the Removal of Wrecks, a 10-year-old international agreement that establishes uniform rules for removing abandoned and derelict vessels from international waters.

Canada will also require owners of large commercial vessels to carry insurance to cover the potential cost of disposing of the ships and there will also be significant penalties in place to go after those who do abandon vessels.

Garneau acknowledged that while the bill gives the government new powers to try and force owners of existing derelicts to remove them safely, it packs a less powerful punch for those boats.

There will be no fines or penalties imposed on the owner of a boat which has already been abandoned, said Garneau. The ownership of some of them can’t even be determined, he noted, which is why Canada is also working with the provinces and territories to establish better rules for identifying boats.

The government is going to establish an inventory of the existing derelicts with the goal of trying to remove them all.

B.C. New Democrat MP Sheila Malcolmson said the number of abandoned boats is actually “in the thousands,” according to her unofficial conversations with coast guard officials. After 15 years of urging federal governments to do something, it’s nice to see some action, she added.

“This is absolutely a breakthrough for coastal communities,” Malcolmson said.

She said she needs some time to go through the 120-page bill to see if it fills all the gaps she believes have been identified by the communities affected. Garneau has committed to working with provinces to establish better licensing and registration systems for pleasure craft and launch a study to find the gaps in federal commercial vessel registration systems.

Malcolmson said the system for registering boats has become so lax it is fairly easy for someone to abandon a boat without it being traced.

Her hometown of Ladysmith, B.C., is dealing with the effects of an abandoned vessel that sank in the harbour Oct. 21, spewing oil and gas into the water. The coast guard managed to contain the leaks, but Malcolmson said the federal government identified the boat as a risk three years ago.

It would have been a lot easier and cheaper to remove it before it sank, she said.

Removing old boats can be prohibitively expensive. Last year it cost more than $1 million to remove the Viki Lyne II from Ladysmith’s harbour, four years after it was abandoned nearby.

The government of Nova Scotia spent nearly $20 million to remove the MV Miner, which ran aground in Nova Scotia in 2011 while it was being towed to a scrap yard in Turkey.

Average driver will pay $130 more per year for insurance once all the increases come into effect

Read more

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