Canadians are benefiting from high oil and natural gas prices that are rescuing the economy from recession, the Bank of Canada says.
Even though drivers filling their tanks might disagree, the country's central bank said the ongoing commodities boom is a blessing because Canada's resources are in demand internationally at high prices.
After warning that rising inflation was a concern and keeping its key interest rate steady, bank governor Mark Carney said the economy "remains robust."
It bounced back from a first-quarter dip and will recover further — growing at a rate of 1.3 percent through September, 1.8 percent in the fourth quarter and 2.8 percent in the first half of next year, he predicted.
The banking system remains "very strong" despite turbulence in the United States and Europe as Canada's banks are "well capitalized" and at the leading edge of disclosure, Carney said.
Even so, Canadians are going through "turbulent times," said Finance Minister Jim Flaherty.
Canada is not immune to the global economic slowdown, but it has strong fundamentals," he said.
One way of assuring credit stability was a move by the government to tighten residential mortgage rules. It eliminated the 40-year amortization term with no down payment. Buyers must now put a down at least 5 percent of the purchase price, with mortgages of no more than 35 years.
Hudson Bay chain sold
Canada's iconic Hudson's Bay Co. has been bought by the owner of the upscale U.S. department store chain Lord and Taylor.
The Bay, established 338 years ago and now with 580 stores, was bought by New York-based NRDC Equity Partners for about $1.1-billion U.S.
This will expand the U.S. store brand into Canada while giving a fresh look to the Bay and its Zellers discount stores, the buyers said.
The Bay came under U.S. ownership in 2006 when it was bought by entrepreneur Jerry Zucker, who died in April.
News in brief
• A U.S. Army deserter who fled to Canada three years ago was ordered deported from British Columbia by the Federal Court of Canada. He was returned to his unit in Fort Knox, Ky., where the company commander will decide his punishment. He is the first Iraq war resister to be deported. Fifty other deserters are seeking refugee status to remain in Canada.
• The national crime rate in Canada fell by 7 percent in 2007, the third year of declines, Statistics Canada reported. There were 594 murders, down from 606 in 2006, while gun crimes fell by 12 percent. Irvin Waller of the Institute for Prevention of Crime at the University of Ottawa said the numbers might not tell the true story. He believes fewer people are reporting crimes because they are disillusioned with the justice system.
Facts and figures
Canada's dollar continued its climb in the past week to 99.47 cents U.S. on Friday while the U.S. greenback returned $1.0054 Canadian, before bank exchanges fees.
The Bank of Canada's key interest rate remains at 3 percent while the prime lending rate is 4.75 percent.
Stock markets continue lower, with Toronto's composite index at 13,562 points and the TSX Venture Exchange 2,291 points.
Lotto 6-49: (Wednesday) 3, 10, 16, 17, 25, 39; bonus 19. (July 12) 15, 18, 19, 21, 24, 35; bonus 37. Super 7: (July 11) 10, 17, 22, 26, 28, 46, 47; bonus 3.
• Ontario's battered automotive industry had another setback with the loss of 720 jobs at the Sterling Truck plant in St. Thomas, Ontario. Citing lower sales, the company will eliminate one of its two remaining shifts in November, increasing to 1,300 the number of workers on furlough.
• Downtown Vancouver was without full power for four days after a fire in an underground electrical vault melted 14 major circuits. British Columbia Hydro said the outage affected about 2,200 customers, ranging from houses to hotels and office buildings, for several hours to several days. It's not known what caused the fire.
• Some of 26 Johns Manville Canada plant workers in Innisfail, Alberta, are considering early retirement after splitting a $15-million (U.S.), tax-free Lotto Super 7 jackpot. Each of 28 shares in the jackpot was worth $535,714. One worker, Terry Bowes, held three shares.
• New Brunswickers reported a record 24 sightings of unidentified flying objects last year according to the Winnipeg-based Ufology Research Institute. Across Canada, there were 836 sightings with one of the most puzzling in Saint John, New Brunswick, of a hovering tube-shaped object that suddenly disappeared.
Jim Fox can be reached at firstname.lastname@example.org.