Every week we bring you the world’s biggest business, currency, and travel stories. This week: Toronto foreign buyers tax; Canadians forgo fruit because of prices; Twitter shares rise; Canada has low inflation; Fed rates could rise; Canada’s EU trade deal will stand.
Toronto home tax
After the government of British Columbia introduced a 15% foreign home buyers tax on house purchases earlier in the year, house purchases declined by 26%. Now some groups are calling for a similar tax in Canada’s second hottest real estate market: Toronto. However the heads of the Toronto Real Estate Board, and the Ontario Real Estate Association have described the potential tax as “a knee-jerk reaction to a problem which we do not fully understand.”
Forgoing fresh fruit
Fresh fruit and vegetable prices have increased 11 and 11.7% respectively year on year as of April, according to Statistics Canada. The price increase has come as a result of the low Canadian dollar increasing the price of imports, as well as drought conditions this past year in California and other produce producing areas. The price increase has resulted in 25% of Canadians eating fewer fruits and vegetables. The University of Guelph predicts a further increase this year of 2.5% to 4.5%
Twitter shares soar
News that Twitter is considering selling itself has boosted the company’s shares by more than 21%. Alphabet, the parent company that owns Google, is being touted as the most likely suitor. Twitter has struggled to meet revenue expectations, and is lagging behind social media competitors like Snapchat and Instagram.
Low-inflation nation
Canada’s inflation rate fell to 1.1% in August, lower than the 1.4% that had been predicted by economists polled by Reuters. Food prices rose at a pace of 1.1%, lower than July’s 1.6% rate. Lower grocery prices are the result of the strengthening loonie, which makes the cost of importing them from the US much cheaper.
CETA stands
The European Commision has determined that the controversial EU-Canada free trade deal will not be renegotiated. The deal has dragged on for about 5 years, but CETA remains highly controversial in Europe over fears that the agreement will erode European standards, workers rights, and the environment. CETA also creates special courts (Investment Court Systems) which allow business owners to sue European or Canadian governments that enact legislation which unfairly discriminated against their business. CETA will eliminate 98% of tariffs between Canada and the EU.
Fed Rate rise on the cards?
The Federal Reserve held interest rates between 0.25% and 0.5%, but minutes from September’s meeting reveal that the central bank expects to raise interest rates before the end of the year. Solid job gains and continued economic progress have encouraged the bank, but the bank wants to see even greater progress, and remains concerned about the impact of low energy prices.
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