BANK OF CANADA HOLDS RATE STEADY
FOR NOW!

Canadian inflation is down to about 6% in January; however, it remains well above the Bank of Canada’s target of 2%. It takes months maybe even years to see the impact of higher interest rates on the economy. Personally, I feel the impact and I know the farming community has experienced this for some time.

 
I believe reducing inflation down to 2% is nearly impossible. Maybe the new bar will be set at 3%...who knows. But I do know further rate hikes could cause major economic damage. Supply chains in my opinion are one of the main components impacting inflation. They are improving but until these supply chains are back to normal this battle of rising interest rates will continue. I see this not as an economist but as an observer of the farming community. We all know that groceries have taken a huge hit. When inputs on the farm double or triple you bet farm gate prices will increase yet their margins have moved very little. In the world of perishable goods, mistakes can be very damaging. Rising interest rates, like perishable goods, need to be handled with extreme due care.

 
There is a pot of gold at the end of the rainbow. Alberta’s economy, I believe, is on the upswing. There is momentum in the energy sector, farmers are preparing to seed the next harvest and spring calving is around the corner.

 
The next Bank of Canada’s announcement on interest rates is scheduled to be on April 12, 2023. The decision to increase or not increase interest rates needs to be carefully analyzed because the health of our future, both personally and professionally, will be the result of this decision.

 
Our team has begun our harvest tax season and this will be my last blog until May at which time I shall continue my writings. I wish you all a safe (on your pocketbook) tax season.

Your thoughts are always appreciated
Take care
Fred