Good morning! In this week’s newsletter, prime rates are up again, a pension giant boosts its target for gender diversity on boards and why fixing Canada’s housing shortage may be easier said than done. Hope you enjoy.
— Joe Hood, Managing Editor, Financial Post
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Big banks follow Bank of Canada in hiking prime rate
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In March 2022, Canada’s biggest banks had their prime rates set at a paltry 2.45 per cent. On Wednesday, after eight consecutive interest rate hikes from the Bank of Canada, prime now stands at 6.7 per cent. It’s one of the most dramatic shifts in interest rates in history, with consequences for borrowers of all stripes. The good news yesterday was that the central bank signalled it would take a breather to allow the increases to percolate through the economy before gauging their effects. But it didn’t rule out future increases if inflation remains troublesome. So has prime peaked? Canadian households certainly hope that’s the case.
PRIME TIME
Carmichael: Bank of Canada hikes rate a quarter-point, but signals it may be the last increase
More: Chrystia Freeland finally offers plan to help Bank of Canada cover its losses
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Pension giant raises threshold for women on boards to 40 per cent
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Canadian companies have improved when it comes to diversity on boards, but for many the progress has not been fast enough. The Ontario Teachers’ Pension Plan has been a leader in calling for increased representation for women and has been pushing large-cap companies on developed market indices in which in invests to maintain 30 per cent gender diversity since 2013. Last week, they upped that figure to 40 per cent. “We’re raising the threshold to challenge public companies in developed markets to keep improving as we strive for truly diverse and representative boards,” a Teachers’ official told Barbara Shecter. The pension giant is also calling for more disclosure on board diversity overall.
KEEPING UP THE PRESSURE
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Why there’s no quick fix to Canada’s housing supply woes
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Housing supply has emerged as a major issue over the past year, becoming the go-to scapegoat for the country’s lack of housing affordability. But anyone expecting a quick fix to a shortage of homes is going to be disappointed. As Shantaé Campbell reported last week, Canadian housing starts actually ticked down in 2022, though they remain elevated against the longer-term trend. Given that the CMHC has projected that the pace of construction would have to more than double to achieve affordability targets, that is hardly reassuring. Among the main culprits: the shortage of skilled labour, which makes scaling up construction a tall order.
‘WORSE BEFORE IT GETS BETTER’
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Royal Bank of Canada pressed by U.S. pension plans to redefine and disclose emission targets for 2030
Investor activism may surge in Canada as slowdown takes a toll
Remote work ‘doesn’t work’ for younger staff, management, Jaime Dimon says
Sun Life nears deal with banking group Dah Sing that will boost insurer’s presence in Hong Kong
Recession or soft landing? Economists divided as economy, labour market prove resilient
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