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Carney Government Faces First Budget Confidence Test in Commons

                 Prime Minister Mark Carney's budget needs two opposition MPs to either support or abstain it to pass. The House of Commons is set to hold its first confidence vote tied to Prime Minister Mark Carney’s inaugural federal budget on Thursday evening. The vote will focus on a Conservative sub-amendment to a Bloc Québécois amendment, both of which challenge key elements of the government’s fiscal plan. The Liberal government has declared the votes to be matters of confidence , meaning defeat could trigger a federal election. While the stakes are high, the government is expected to survive this initial test thanks to support from the New Democratic Party (NDP) and the Bloc Québécois , who have both signaled they will vote against the Conservative motion. Interim NDP Leader Don Davies confirmed that his caucus of seven MPs will side with the Liberals, ensuring the defeat of the Conservative sub-amendment. However, Davies ...
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Banks face challenges as fiscal year ends

                                     

The fiscal year 2023 has been a tough one for Canada’s major banks, as they faced rising costs, regulatory pressures and credit risks. Analysts expect their fourth-quarter earnings, which will be reported this week, to show a decline from last year.

Some of the challenges that the banks encountered this year include:

  • Cost-cutting measures: Some banks, such as RBC and Scotiabank, have reduced their work force and real estate holdings to lower their expenses. Others, such as BMO, have completed or planned major integrations of their acquisitions.
  • Regulatory scrutiny: TD Bank is awaiting the outcome of investigations by U.S. authorities over its anti-money-laundering practices, which could result in fines or other penalties. RBC’s proposed takeover of HSBC’s Canadian unit has also faced opposition from political and environmental groups.
  • Credit risks: As interest rates rise and inflation persists, the banks have increased their provisions for potential loan losses, anticipating higher defaults from their borrowers. The banks are also required to hold more capital by the banking watchdog, OSFI, to cushion against an economic downturn.
  • Slow loan growth: The demand for lending has been dampened by the high cost of borrowing and the uncertainty over the economic recovery. The banks have also faced stiff competition from fintechs and other non-bank lenders, who offer more convenient and cheaper alternatives.

Despite these headwinds, the banks are still well-positioned to weather the storm, as they have strong capital ratios, diversified businesses and loyal customers. The banks are also investing in digital transformation, innovation and growth opportunities, especially in international markets. Analysts and investors will be looking for signs of resilience and optimism from the banks as they wrap up the fiscal year.

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