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Canada's falling mortgage rates rescinded after official complains

Some people call it meddling, but Finance Minister Jim Flaherty said that pressuring banks not to engage in a mortgage-rate war is in the best interest of Canadians.

Flaherty personally called Bank of Montreal executives to complain when its five-year mortgage rate was reduced to 2.99 percent this month.

Members of his staff then contacted Manulife Financial the next day to express displeasure after dropping its five-year rate to 2.98 percent.

There is a concern with current historically low rates "whether people can afford their mortgages when interest rates go up," Flaherty said.

Manulife quickly complied and put its rate back up to 3.09 percent, while Bank of Montreal's rate was restored to 3.09 percent.

Small Business Minister Maxime Bernier opposed Flaherty's action, saying he wouldn't dictate the rates the private sector should offer.

"It's supply and demand that decides the prices," he said.

"We want to ensure that mortgages remain affordable and stable and that the market stays stable and affordable in the long run for Canadian families," Prime Minister Stephen Harper said.

10-year plan tackles prescription abuse

A new national strategy is in place to help combat prescription drug abuse in Canada.

Health Minister Leona Aglukkaq said it is a "very complex process," as she gave details of a 10-year plan to revamp laws so doctors and pharmacists can no longer prescribe painkillers indiscriminately.

It will also ensure that drug addicts are able to get appropriate and timely help, she said.

The government believes it is a growing problem as a survey found that 8.2 percent of young smokers in Grades 6 to 12 reported using prescription and over-the-counter drugs in the previous year to get high.

News in brief

• The Canadian Food Inspection Agency said that potentially deadly E. coli bacteria detected at a Cargill meat processing plant in Alberta did not leave the facility. The bacteria was discovered in routine tests at the High River plant. Mike Martin of Cargil said this shows improved safety measures that followed last year's massive beef recall at the Alberta XL Foods plant are working.

• Manitoba provincial government's flood-watch forecast expects a "moderate to major risk" this spring. The risks have increased along the Red, Souris, Pembina, Saskatchewan, Qu'Appelle and Assiniboine rivers due to a recent heavy snowfall and above-average snowpack with a high water content. Communities in Southern Manitoba have started sandbagging and buying flood-prevention implements.

• Richard Kachkar, 46, who ran down and killed a Toronto police officer with a stolen snowplow was found not criminally responsible due to mental illness. A jury returned the verdict into the death last year of Sgt. Ryan Russell, 35. Kachkar will remain confined to a mental health facility for an indeterminate period.

Facts and figures

The Canadian dollar has advanced to 98.25 cents U.S. while the U.S. greenback is valued at $1.0177 in Canadian funds, before bank exchange fees.

The Bank of Canada's key interest rate is steady at 1 percent, while the prime-lending rate is 3 percent.

Stock markets are lower, with the Toronto exchange index at 12,749 points and the TSX Venture index 1,099 points.

Lotto 6-49: (March 27) 2, 8, 11, 26, 27 and 33; bonus 17. (March 23) 1, 2, 7, 10, 33 and 38; bonus 13. Lotto Max: (March 22) 7, 12, 16, 19, 21, 24 and 47; bonus 34.

Regional briefs

• Five more people were fined in Superior Court this month for conspiring to fix the price of gasoline across Quebec. A Competition Bureau investigation has so far led to fines totaling $3 million and jail terms of 54 months. To date, 39 people and 15 companies have been charged.

• British Columbia Auditor General John Doyle said the province's carbon offset program is a fraud. The government said it spent $6 million on projects to offset air pollution that would have been done anyway, so they shouldn't be claimed as achieving carbon neutrality, he said. Program officials said Doyle ignored the evidence and lacks the expertise to examine the system.

• Despite saying it wouldn't raise taxes, New Brunswick Finance Minister Blaine Higgs said there was no other option to battling the deficit. Personal income and corporate tax rates will rise in the $8.5 billion spending plan along with higher tobacco taxes. The government decided, however, not to increase sales taxes.

Jim Fox can be reached at canadareport@hotmail.com.

Canada's falling mortgage rates rescinded after official complains 03/30/13 [Last modified: Saturday, March 30, 2013 7:02pm]

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