The Bank of Canada is seen Wednesday September 6, 2017 in Ottawa. A Bank of Canada deputy governor says the effects of U.S. trade unknowns, lower oil prices and weaker housing and consumer spending are behind the recent deceleration in the country’s economic growth. (Adrian Wyld/The Canadian Press)

Trade issues, oil slump and lower spending have slowed growth: BoC deputy

Timothy Lane says this slowdown in Canada’s economic expansion is temporary

A Bank of Canada deputy governor says the effects of U.S. trade unknowns, lower oil prices and weaker housing and consumer spending are behind the recent deceleration in economic growth.

In prepared remarks of a speech today in Washington, Timothy Lane says this slowdown in Canada’s economic expansion is temporary.

Lane says these factors along with the fiscal stimulus that has energized the American economy and, as a result, led the U.S. Federal Reserve to raise interest rates have been putting downward pressure on the Canadian dollar.

He says the lower loonie will help support the Canadian economy through this period.

Lane says uncertainty related to U.S. policies has kept business investment lower than where it should be at this point, given the overall strength in the Canadian economy.

Last month, Bank of Canada governor Stephen Poloz kept his benchmark interest rate unchanged at 1.75 per cent as the economy navigates what he described as a temporary period of softness created by a recent, sharp decline in world oil prices.

Lane’s speech to the Peterson Institute for International Economics focused on explaining how Canada manages its foreign reserves, which he noted are about US$85 billion or five per cent of the country’s gross domestic product.

He describes the size of Canada’s foreign reserves as modest yet adequate because the country has a freely floating exchange rate.

One relatively recent development, Lane noted, is that other central banks and monetary authorities started adding Canadian-dollar assets to their reserve portfolios following the global financial crisis about a decade ago. Reserves in Canadian dollars are now about $200 billion, he said.

READ MORE: Bank of Canada offers explanations for country’s ‘puzzling’ wage disappointment

READ MORE: Bank of Canada holds interest rate, views oil slump as temporary soft patch

The Canadian Press


Like us on Facebook and follow us on Twitter.

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Provincial COVID-19 data can now be used for B.C. to prepare for a second wave

In the past week, B.C. has seen a slight spike in daily test-positive case counts

Four air ambulance flights out of Terrace delayed or cancelled

Pandemic precautions caused nighttime closure of service station providing weather data to pilots

Skeena Resources, Tahltan prez excited by purchase of Eskay Creek

Skeena gets full control of mine, Barrick gets 12 per cent of Skeena and a one per cent royalty

VIA Rail lays off 1,000 unionized workers across the country

Northern B.C. route Jasper to Prince George to Prince Rupert is not affected by VIA Rail layoffs

Overall house sales drop in the northwest

COVID-19 pandemic slowed market activity

Sources say Canada, U.S. likely to extend mutual travel ban into late August

Prime Minister Justin Trudeau hinted at the possibility after a phone call with U.S. President

Windows broken, racist graffiti left on Okanagan home

Family says nothing like this has happened since they moved to Summerland in 1980s

B.C. man who went by ‘Doctor Ray Gaglardi’ charged with sex assault of teenage boys

The man, 75, is accused of assaulting teenage boys he met through Coquitlam-area churches

B.C.’s potential deficit $12.5 billion as spending spikes, taxes drop

Finance Minister Carole James gives COVID-19 outlook

Canadians torn on scaling back COVID-19 benefits to save money: poll

Of those surveyed, 78 per cent said they were worried about the size of the deficit

‘Trauma equals addiction’: Why some seek solace in illicit drugs

Part 2: Many pushed into addiction by ‘toxic stress,’ says White Rock psychologist

Hotel rooms for B.C. homeless too hasty, NDP government told

Businesses forced out, but crime goes down, minister says

Wage subsidy will be extended until December amid post-COVID reopening: Trudeau

Trudeau said the extension will ‘give greater certainty and support to businesses’

B.C. government prepares for COVID-19 economic recovery efforts

New measures after July consultation, Carole James says

Most Read