Standing back and looking at today’s global trading picture, one can see that it’s not pretty – destabilized by the wars in Ukraine and Gaza, by the unsettled multilateral situation at the World Trade Organization and by innumerable regional trade disputes.
Most important among the issues, though, is the looming clash between the West and China over electric vehicles (EVs), which is set to dominate this year’s trade agenda.
This fight is shaping up to be an epic battle, covering a wide swath of minerals critical to EV production and with implications reaching deep into national decarbonization policies and supply chains, not only for the Canadian automotive industry but for a large array of businesses…
The old bank and the Red Sea: Bank of Canada must address threat of geopolitics - Globe and Mail
The Bank of Canada again held its target for the overnight rate at 5 per cent on Wednesday, as expected.
The clamoring had begun for the bank to consider dropping rates in hopes that inflation is headed back to 2 per cent. However, the latest numbers (for December) disappointed, with headline inflation ticking back up to 3.4 per cent (from 3.1 per cent), and core measures flat or, in the case of CPI-Trim, slightly higher. On Wednesday, the bank stressed upside risks to inflation coming from greater-than-expected persistence.
However, the announcement did not mention geopolitical risks, particularly the effect of the disruption of maritime traffic in the Red Sea, its impact on shipping costs, and the knock-on effects on…
Support for Canada’s federal carbon tax for the control of greenhouse gas emissions appears to be crumbling after Ottawa’s decision in the fall to exempt home heating oil from the tax until 2027. Polling by the Angus Reid Institute indicates that two-thirds of Canadians support a further exemption for all home heating fuels, including natural gas, and many (42 per cent) want the carbon tax abolished altogether.
Yet exempting natural gas from the carbon tax, or eliminating the tax altogether, would actually harm most of the households who support the idea. That is because the proceeds from the tax are pooled and then rebated to households in the jurisdiction in which they are collected (the federal carbon tax applies…
