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    The Key Interest Rate Hasn’t Moved…

    (And What This Means for You!)

    The Bank of Canada (BoC) has opted to keep the target interest rate at 1.75%, indicating a shift in the overall outlook of the Canadian economy in 2020.

    Remind me – What’s the BoC?

    The BoC is the non-political body in charge of monetary policy for the Canadian economy – it controls the ‘key interest rate’ which influences how banks set interest rates for things like mortgages, line-of-credits, and student loans.

    Whether the BoC changes the key interest rate has a huge impact on borrowers. For example, if the rate is increased 0.25% (a typical hike) your $1000 student loan payment is now $3 more expensive a month. While this doesn’t seem like much, it does add up and will mean your loan takes longer to pay off.

    Why didn’t the rate increase or decrease?

    The BoC’s decision seems to be based on mixed market conditions in Canada right now, such as consumer spending slowing down, while unemployment remains at record lows. It’s likely the BoC is looking to keep the rate stable in case of an economic slowdown, in which case the Bank would have more flexibility to reduce interest rates to help stimulate the economy.

    Stephen Poloz, the Bank’s Governor, forecasted what the next year will look like for Canadians  in his official statement: 

    “Canadian business investment and exports are expected to contribute modestly to growth, supported by stronger global activity and demand. The Bank is also projecting a pickup in household spending, supported by population and income growth, as well as by the recent federal income tax cut”. While the consistent rate is unsettling for analysts hoping for increased growth, overall, the move is consistent with a prudent outlook on 2020.

    Goldman Sachs Won’t List Companies Only Directed by White Dudes

    Goldman Sachs, the American investment bank, announced a new policy at Davos this week aimed at promoting more diversity on boards.

    Goldman, which is the world’s second-largest bank for bookrunning IPOs,  will no longer assist companies in going public if their Board of Directors is entirely composed of white men.

    Beginning on June 30th, companies must have at least one “diverse” Director in order to receive Goldman’s IPO assistance services. By 2021, companies will be required to have at least two “diverse” Directors. The restriction is limited to companies based in Europe and the United States, however.

    Commentators have noted this announcement comes shortly after the failure of WeWork’s IPO, of which Goldman was an underwriter. WeWork was criticized by many industry watchers for not having any women on its Board at the time it went public. They did, however, have kombucha on tap.

    New Yorker cartoons, always on point.


    Ride Sharing Is (Finally) Available in Vancouver

    After eight years of lobbying for licensing in Canada’s third-largest city, ride-sharing apps Uber and Lyft got the go-ahead to operate in Vancouver on Thursday.

    While Vancouver was initially targeted as a premier location for Uber to trial their expansion outside of the United States, provincial and municipal authorities consistently denied ride-sharing apps licenses to operate.

    Part of the grounds for denial came from strong opposition from the taxi lobby, which emphasized their stronger worker protections and lack of ‘predatory’ pricing – referring to surge-pricing.

    Ultimately, the province approved ride-sharing licenses on Thursday on the grounds that each driver pay the province $100 annually, and hold a Class 4 license, which requires additional testing and training. The province did not impose limits on surge-pricing and the number of vehicles a ride-sharing app can have on the road at any given time.

    However, ride-sharing apps will still have to go through municipal authorities. While Vancouver and Whistler have given Uber and Lyft the go-ahead, Surrey is still not convinced.

    Coronavirus: The Debrief

    Remember the SARS outbreak in 2002? Well, this is similar, but scientists are still figuring out whether coronavirus is as severe or lethal.

    Coronavirus began in December in Wuhan, China, and is believed to have started from a local market selling live animals. Strains of coronavirus are generally transmitted through animals, however this recent strain has become rapidly contagious between people.

    The virus is fatal, and has killed nearly 56 people to date. Large areas in China are under quarantine to avoid the spread of the virus, however there are now nearly 2,000 cases across China, as well as cases in 15 countries including Canada.

    Unfortunately, people are contagious even before they show symptoms. This is worrying because it’s a lot harder to figure out who the carriers are and who needs to be quarantined.

    The World Health Organization (WHO) met on Thursday and declared that the virus is not a ‘public health emergency of international concern’ (PHEIC, for you health buffs), but will be continuing to monitor the situation closely

    Am I at risk?

    Right now, the risk in Canada is quite low. Just like the flu, coronavirus is transmitted through close contact, particularly coughing and sneezing within 3-6 feet. The symptoms are flu-like, with fever, cough, and difficulty breathing. Unless you have recently been to China or been in contact with someone carrying the virus, you are advised to treat cold and cough symptoms as normal, and don’t need to go to the doctor unless you have chest pain or difficulty breathing.

    What are the economic implications of Coronavirus?

    While this story is primarily important because people’s lives and safety are at risk, the virus has interesting economic implications. Given that coronavirus is transmitted through animals, China implemented a ban on wildlife trade that went into effect on Sunday. While it may have larger implications for trade, it is too soon to tell.

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