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Inflation surprisingly rises, CRA announces legal action and Canada’s dysfunctional housing market: Must-read business and investing stories
![Inflation surprisingly rises, CRA announces legal action and Canada’s dysfunctional housing market: Must-read business and investing stories Inflation surprisingly rises, CRA announces legal action and Canada’s dysfunctional housing market: Must-read business and investing stories](https://www.theglobeandmail.com/resizer/v2/MKG2LZWLMBFSRCCQ23YVPKGTIQ.jpg?auth=d20c381a26b68f7226c356f34a2289ec640f4745392a2f36ce6e01250f1a1d29&width=1200&height=800&quality=80)
A housing development near the Jackson Heights area of Peterborough, Ont., on June 27.Laura Proctor/The Globe and Mail
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 accelerated to 2.9 per cent in May
In an unexpected move this week, Statistics Canada reported that Canada’s inflation rate climbed higher in May. The Consumer Price Index rose 2.9 per cent in May on a year-over-year basis, up from 2.7 per cent in April. Financial analysts had been expecting the inflation rate to ease to 2.6 per cent. This was the first time in 2024 that inflation came in higher than Bay Street estimates, with a variety of services – including plane tickets, rents and cellphone plans – contributing to the upturn, Matt Lundy reports. Core measures of inflation, which strips out the most volatile price movements, also picked up speed. Tuesday’s report casts some doubt over the timing of interest-rate cuts, weakening the case for the Bank of Canada to cut interest rates again in July.
BoC’s Macklem says Canadian economy appears to be on track for soft landing
In other economic news, Bank of Canada governor Tiff Macklem said earlier this week that the Canadian economy appears to be on track for a soft landing. However, he mentioned in a speech to the Winnipeg Chamber of Commerce that a slowdown in the labour market is hitting some groups harder than others – especially, new Canadians and young people. The unemployment rate in Canada has risen more than a percentage point over the past year, hitting 6.2 per cent in May, Mark Rendell reports. There has not been a large increase in layoffs, but businesses have pulled back on hiring, seeing that high interest rates have weighed on consumer spending and dulled corporate investment. Surprisingly though, one area of growth in Canada’s job market has been management jobs.
Decoder: Toronto is awash in new condo listings
Toronto is experiencing a flood of new condo listings. In fact, condo inventory in the city has nearly doubled in a year. According to Toronto Regional Real Estate Board figures, there were 6,350 active condo listings in the city at the end of May. That’s an increase of 94 per cent from the previous May. Realtor Scott Ingram said that investors are likely facing pressure from variable-rate mortgages that are poised to renew at higher interest rates. Matt Lundy takes a closer look at the figures in this week’s Decoder.
CRA announces legal action to recover COVID-19 benefit overpayments
The Canada Revenue Agency is ramping up efforts to recover outstanding COVID-19 benefit overpayments from individuals who have been unresponsive or uncooperative so far, yet who have the means to pay. The tax collection agency announced that it will begin sending warnings in July that could lead to legal action, Pippa Norman reports. It had already began sending letters in February, 2023 to people who had not made an effort to resolve their overpayment. The agency said $9.53-billion in outstanding COVID-19 benefit recovery-related debt remained as of April 30. Of that total, $5.4-billion is from the Canada Emergency Response Benefit (CERB).
Average down payment gift for first-time homebuyers soars into six digits: CIBC
The Bank of Mom and Dad is playing a key role in helping young Canadians afford a first home. Thirty-one per cent of recent first-time buyers received a gift for their down payment, up from 20 per cent in 2015, according to a new analysis by Canadian Imperial Bank of Commerce. The average size of the parental gift has soared to $115,000. In British Columbia, the average down payment gift sits slightly above $200,000. In Ontario, the average gift is now $128,000. “A generation of Canadians can only dream about owning a house without their parents, in many cases,” one of the report author Benjamin Tal said in an interview with Erica Alini.
Inside the crisis facing Canada’s dysfunctional housing market
From any angle you look at it, Canada’s housing market is badly broken. The problems can seem staggering, but they are the product of a multitude of accumulated decisions and events – many of which were frustratingly avoidable. Jason Kirby, Matt Lundy, Shane Dingman and Frances Bula explore five infuriating examples of the housing crisis from across the country, including outdated zoning rules in Vancouver, limited development for family-sized units in Peterborough, Ont., and the University of Guelph accepting far more first-year students than its residences can accommodate.
Canadian inflation surprised markets by jumping in May, according to figures published this week. Soaring rents were largely to blame. Where have rents surged the most over the past year?
a. Alberta
b. Ontario
c. Quebec
d. Nova Scotia
Get the rest of the questions from the weekly business and investing news quiz here, and prepare for the week ahead with The Globe’s investing calendar.