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Bank of Canada once again faces the dilemma of a two-speed economy: Don Pittis





In some ways, it’s like Dutch disease all over again, and just like before, the current two-speed economy in Canada has the potential to exacerbate national divisions.

Dutch disease, famously diagnosed in this country by the NDP’s Thomas Mulcair in 2012 — and for which the Opposition leader was roundly attacked — set supporters of the booming oil and gas sector against those in the crumbling industrial parts of the country.

The difference is that now, the shoe is on the other foot.

“The impact of the decline in oil prices is at the heart of this update,” Bank of Canada governor Stephen Poloz said yesterday, as he explained to reporters why he was slowing the pace of interest rate increases, holding the Canadian headline rate at 1.75 per cent.

But that rate is to some degree a compromise. While rising wages and economic growth in some sectors and regions could sustain higher rates, the energy sector might be better off with interest rate cuts.

According to the Dutch disease scenario, surging oil exports drove the Canadian dollar higher, pricing Canadian industrial products out of their traditional markets. Jobs and wages in places like Alberta surged. In Canada’s former industrial heartland, unemployment grew as companies closed their doors.

Of course, energy wasn’t alone in leading Poloz to hold off on a rate hike. Fear of a shrinking global economy, caused to a large extent by fears of a growing trade war between the U.S. and China, also contributed to the decision.

The economy continues to be dogged by global uncertainties, including Brexit’s potential impact on Europe. There is also the unknown fate of the trade deal Canada negotiated with the U.S. and Mexico, which has Canadian businesses anxious and holding onto their money. 

While oil weakens, other parts of the Canadian economy are still powering ahead. (Kyle Bakx/CBC)

“Unfortunately there doesn’t seem to be any place to hide from uncertainty,” Poloz said.

A slowdown in the pace of interest rate hikes would also help over-borrowed Canadians facing rising rates on loans and mortgages, giving them longer to adjust. However, the bank has no plans to roll back the stress tests that ensure Canadians are able to handle any future rate increases.

In fact, while Poloz once again said the future path of interest rates would depend on the data — pointing to yesterday’s delay in further increases as evidence of the bank’s flexibility — he insisted that rates would eventually continue to rise.

Rates expected to keep rising

At 1.75 per cent, he says, rates are still low enough to add stimulus to the economy. They will continue to rise until they reach a neutral point where they neither stimulate nor slow the economy.

“The best estimates we have right now are sort of in the 2½ to 3½​ range,” he said. In effect, most mortgage holders must plan for a rate increase in the order of another whole percentage point.

One of the reasons for that expectation, Poloz said, is that gloom about the economy is overdone.

For one thing, while there is a risk of economic trouble due to the U.S.-China trade dispute, a resolution of that dispute could lead to a rebound in the world economy and increase demand for oil, which tends to rise and fall with economic expectations.

Wages in the software industry are rising well above inflation. (Mark Blinch/Reuters)

And despite trouble in the oil and automotive sectors, both sectors combined represent only about five per cent of the Canadian economy, and both have been shrinking. They just aren’t as big an influence on Canada’s industrial economy as they once were, and they are being upstaged by things such as information technology and the service industry.

“It’s important to understand that there are a lot of other things going on out there that are actually doing really well,” Poloz said. “Just in a sector such as IT services, which is growing at five, six or seven per cent a year, the leading growth job creator, the leading export category, leading in many respects.”

Ninety per cent of the economy, he says, is operating at capacity and having trouble finding workers. While oil sector wages are barely keeping up with inflation, wages in other sectors and regions are rising at close to three per cent.

Creative destruction

The Bank of Canada governor said the idea of creative destruction, proposed by economist Joseph Schumpeter in the 1940s, where young industries grow up to replace old ones that decline, is happening now in this country, including in the oil sector that so recently dominated the Canadian economy.

“The oil sector is a great example,” he said, citing an industry that grew faster than all others from 2008 to about 2014. “But what was happening in the rest of the economy? Many places were being crushed by exchange rates that were at parity or above.”

Poloz says the bank will have a better idea of where the economy is heading in the spring. One thing he will be watching for is whether the economy’s capacity — its ability to grow without inflation — is increasing. 

“What it could mean is that there is less capacity in the oil sector, and that’s all right because they are in the process of downsizing, essentially, from that extraordinary level.”

Follow Don on Twitter @don_pittis


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Future of Ottawa: Chefs with Kathryn Ferries





This week in the Future of Ottawa series, we’re taking a deep dive into the bar and restaurant industry—what it’s like now and where it’s headed. Read on for a guest post from Kat Ferries on the future of chefs, or read posts from Quinn Taylor on bars or Justin Champagne on fine dining.

Kat Ferries is Sous-Chef at Stofa Restaurant and a 2020 San Pellegrino North American Young Chef Social Responsibility Award Winner.

Apt613: What is the current landscape for chefs in Ottawa?

Kat Ferries: There is such great talent in Ottawa with so many chefs either being from here originally or have returned after traveling and have since opened some incredible restaurants. Many chefs have focused menus that really highlight their strengths, their heritage, and their passion for food. Dominique Dufour of Gray Jay, Marc Doiron of Town/Citizen, Steve Wall of Supply & Demand, Daniela Manrique Lucca of The Soca Kitchen, and so many more are all cooking up beautiful and delicious food in this city.

If you care to make a prediction… Where is the food industry in Ottawa going for chefs in 2021?

The industry right now is, unfortunately, in a really tough spot. The pandemic has been so devastating on mental, physical and emotional levels for so many and I know that many of my friends in this industry are burning out. There are many discussions happening on work/life balance and what is healthy for everyone. Some may never return to the long, hard hours we are expected to put in day after day and instead opt for a more flexible schedule or hire more staff to lighten the load on everyone, with some even leaving the industry indefinitely. Some may throw themselves back into this industry 10x as hard and create some of the best restaurants and concepts we’ve yet to see. I think all that will happen after the pandemic though.

For this year, it’s mostly about survival and finding happiness in creating what we can in the spaces we have while following all the laws and guidelines from public health officials. I think we will see more chefs creating experiences for guests that we otherwise wouldn’t have: think pop-ups, virtual dinner clubs, cocktail seminars, collabs, etc.

Where in your wildest dreams could the Ottawa culinary community grow in your lifetime?

I would love to see the Ottawa community support more small, local restaurants so our streets are bustling late into the nights like they are in Montreal, New York, or Europe. Having a local restaurant to frequent should be so much more commonplace, where you can enjoy a night out more often than just Friday or Saturday night. I would also love to see many more of our local chefs highlighted for the amazing food they create!

What is the best innovation to take place in your industry since the pandemic started affecting Ottawa?

Turning all our restaurants into mini-markets for customers to enjoy the food and wine of their favourite places at home. We have bottle shops for all your wine, beer and cocktail needs as well as menus that reflect what each restaurant does best. Some have even pivoted to a point where they are 100% a store and have paused any type of “service-style” dining.

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Future of Ottawa: Fine Dining with Justin Champagne





This week in the Future of Ottawa series, we’re taking a deep dive into the bar and restaurant industry—what it’s like now and where it’s headed. Read on for a guest post from Justin Champagne on the future of fine dining, or read posts from Kathryn Ferries on chefs or Quinn Taylor on bars.

Justin Champagne went to culinary school at Northwest Culinary Academy of Vancouver. He got his start in fine dining restaurants at C Restaurant under Chef Robert Clark, then at Hawksworth Restaurant under Chef Eligh. He staged at three-Michelin-starred Atelier Crenn under Chef Dominque Crenn before moving to Ottawa and spending five years at Atelier, working his way up to Sous-Chef. He’s now the Head Chef of Bar Lupulus.

Apt613: What is the current landscape of fine dining restaurants in Ottawa?

Justin Champagne: Ottawa punches well above its weight class when it comes to quality restaurants in general. Fine dining is no exception to that—we have some amazing chefs here that are doing really great things. We also have some phenomenal sommeliers in town that are a huge factor when it comes to a guest’s experience in a fine dining restaurant. While there are some fantastic fine dining restaurants in town I do believe there’s room for more, and definitely room for more creativity and unique styles of cooking! I think we’ll see more small fine dining restaurants opening up, “micro-restaurants” where there’s maybe 20 seats. This will be over the next few weeks as the industry did take a big hit financially with COVID-19, but we still have a lot of great young chefs who have the fire inside of them to open their own location!

If you care to make a prediction… Where is fine dining going in Ottawa in 2021?

I’m not sure it’ll be 2021 or 2022 with the way the vaccine rollout and stay-at-home order is going, but I do expect there to be a wave of people looking to go out to fine dining restaurants. We’ve been cooped up cooking for ourselves or ordering takeout for over a year now. People are getting antsy and ready to go out and have fantastic meals again with exceptional wine and not have to worry about doing all the dishes afterwards!

Where in your wildest dreams could fine dining go in Ottawa in your lifetime?

That’s the fun part about “fine dining,” it can go anywhere and it can mean many things. Fine dining is about amazing service and well thought out, unique food that the kitchen spent hours fussing over, being meticulous in execution. Outside of that, you can have a lot of fun and be creative in different ways. My wildest dream I guess is that fine dinning restaurants begin to thrive and are able to charge without backlash the kind of prices that they need to charge in order to keep the lights on and pay their staff a proper living wage!!

What is the best innovation to take place in your industry since the pandemic started affecting Ottawa?

I’m not sure if I would really say there’s been a best “innovation” in my industry during the pandemic, but I will say that seeing the “adaptability” by all the restaurants in Ottawa has been incredibly inspiring. Ottawa’s food scene has always been a tight-knit community, “everyone helping everyone” kind of mentality. And this pandemic has really helped show that—restaurants helping restaurants through all of this!

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Ottawa’s Giant Tiger chain celebrating 60 years in business





OTTAWA — An Ottawa staple, along with what might be the most famous cat in Canada, are celebrating a milestone Monday.

Giant Tiger is 60 years old.

“It all started with a very simple idea,” says Alison Scarlett, associate VP of communications at Giant Tiger. “Help Canadians save money every single day. Bring them products that they want and need. When you focus on those core principals, it really is quite simple to succeed.”

In 1961, Gordon Reid opened the first Giant Tiger in Ottawa’s ByWard Market. The company now has more than 260 locations across Canada and employs roughly 10,000 people.

“If you were at our store on opening day 60 years ago, the in store experience would be a little bit different from your local Giant Tiger store today. So that’s changed. A lot of our products and offerings have changed or expanded as Canadian consumers wants and needs have changed or expanded,” says Scarlett.

The homegrown department store continues to be a favourite for many shoppers looking to for the best deals on everyday products.

Helen Binda has been shopping here for decades.

“Many years. I can’t remember when. I’ve always loved Giant Tiger. It’s always been a good store for me.”

“I think its amazing and I think that we need more department stores,” says shopper Fay Ball. “And if it’s Canadian, all the better.”

The Canadian-owned family discount store carries everything from clothing to groceries, as well as everyday household needs. They’ve also expanded their online store and like most retailers provide curbside pickup during the pandemic.

“Doing what is right for our customers, associates, and communities. That has enabled us to be so successful for all of these years,” says Scarlett.

To celebrate, Giant Tiger is hosting a virtual birthday party at 7 p.m. Monday with live musical performances from some iconic Canadian artists.

You can visit their Facebook page to tune in. 

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