A person shops for produce at the Granville Island Market in Vancouver on July 20, 2022. Canada's inflation rate was up 8.1 per cent in June compared with a year ago, the largest yearly change since January, 1983.DARRYL DYCK/The Canadian Press
Getting caught up on a week that got away? Here’s your weekly digest of The Globe’s most essential business and investing stories, with insights and analysis from the pros, stock tips, portfolio strategies and more.
Canada’s inflation rate hits 8.1% but might be near its peak
June’s inflation, up from 7.7 per cent in May, was the highest rate in nearly four decades, Matt Lundy writes. The acceleration was mainly because of gas, as consumers paid 6.2 per cent more at the pump in June than May, and 55 per cent more on an annual basis. But the consumer price index (CPI) of 8.1 per cent was still shy of what financial analysts were expecting, signifying tentative signs that inflation is close to topping out.
Dust off those shoulder pads: lessons on inflation and interest rates from 1981
When the Bank of Canada raised its benchmark rate by a full percentage point on July 13, it was the biggest hike since 1998 and sent shockwaves across the country. But it’s the 1980s that seem most relevant to today’s high inflation and soaring rates – and a reminder of what happens when we don’t quickly get inflation under control. In 1981, the central bank’s trendsetting rate hit 21 per cent, and the prime rate used by major banks peaked at 22.75 per cent (by comparison, the current prime is 4.7 per cent). Rob Carrick dials back the clock to understand what history can teach us now.
But wait, there’s more – inflation is creeping into your Netflix subscription
After more than two years in which digital-economy prices fell on an annual basis, services like wireless, streaming and ride-hailing apps are now becoming more expensive. As Jason Kirby writes, while an increase of 1.5 per cent might seem small, especially in light of June’s 8.1-per-cent inflation rate, below the surface, consumers are facing steeper bills in some areas (audio and video subscription services like Spotify and Netflix, for example, rose 6.9 per cent from the year before).
Why Canadians with long COVID struggle to access financial aid
While Canada doesn’t yet have an official tally of COVID long-haulers, the World Health Organization estimates that up to 20 per cent of people who contract COVID-19 experience symptoms lasting for at least two months. Based on those estimates, Canada’s official 3.9 million COVID-19 case count to date puts the number of long-haulers in the hundreds of thousands. Some people with long COVID are unable to work completely, while others have been using vacation days or unpaid sick leave when their symptoms become unmanageable. As Erica Alini writes, long-haulers face a financial dilemma because, at least for now, public disability benefits are ill-equipped for a condition like long COVID.
Take a deep breath: you now need to make an extra $18,000 to pass the mortgage stress test
Canada’s housing market appears to be cooling, but that doesn’t mean it’s now more affordable to enter the market. In fact, because of rising interest rates, the average yearly income needed to buy a home on a fixed mortgage with 20 per cent down has climbed by $18,000 in the past four months. In Vancouver, first-time homebuyers must now make a minimum of $232,000 a year to afford a home, and in Toronto, people need a salary of $226,000. Ben Mussett looks at the stress test and why homeownership is even less attainable for many Canadians.
Rogers replaces its chief technology officer after the widespread outage
Just days before Rogers faces scrutiny in Ottawa over this month’s countrywide outage, the company has replaced its CTO, write Alexandra Posadzki and Andrew Willis. Veteran telecom executive Ron McKenzie will take over responsibility for the systems that support the 12 million customers of Canada’s largest cellphone company, replacing Jorge Fernandes. Meanwhile, Rogers president and CEO Tony Staffieri has been saying sorry a lot. But what Canadians need more than a public apology tour, Rita Trichur argues, is an explanation of what caused the outage in the first place.
Now that you’re all caught up, prepare for the week ahead with The Globe’s investing calendar.
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