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Why Interest Rates Matter for Canadians

Interest rates are the single most powerful lever in Canada's economy.  When the Bank of Canada adjusts its policy rate, the effects reach every household—from the cost of carrying a mortgage to the return on a savings account. With rates currently at 2.25% and significant uncertainty ahead, understanding how rates work has never been more important for your finances. What Is the Bank of Canada's Policy Rate? The Bank of Canada sets the overnight policy rate—the interest rate at which major banks lend money to each other. This rate serves as a benchmark that influences borrowing and lending costs across the entire economy. When the Bank raises or lowers this rate, commercial banks adjust their prime rates accordingly, which directly affects the rates you pay on mortgages, lines of credit, and other loans. The Bank's primary goal is to keep inflation near its 2% target. When inflation runs too hot, the Bank raises rates to cool spending. When the economy slows, it cuts rates...
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Private Donor Steps In: Pentagon Accepts $130M Gift to Fund Troop Pay Amid Shutdown

Government employees deemed essential are typically required to work without pay during a shutdown.

The Pentagon has confirmed it accepted an anonymous $130 million donation to help cover military salaries during the ongoing government shutdown. The contribution, described as highly unusual, was accepted under the Defense Department’s “general gift acceptance authority” and earmarked specifically for service members’ pay and benefits.

President Donald Trump revealed the donation during remarks at the White House, calling the donor a “patriot” and “friend of mine,” though the individual’s identity remains undisclosed. Pentagon spokesperson Sean Parnell emphasized that the funds would be directed solely toward offsetting the cost of troop compensation.

While the donation is significant, it represents only a fraction of the billions required to sustain military payrolls. The move has sparked debate in Washington, with some lawmakers raising ethical and procedural concerns about relying on private contributions to fund core government responsibilities.

The Pentagon has not indicated whether additional private donations will be sought or accepted as the shutdown continues.

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