2022-03-25 12:00:00
Every week, you send your questions on the economy, finances, markets, etc. Our journalists try to answer them with the help of experts.
Zero population, zero economic growth?
Is it possible to have economic growth without having population growth? The world population should stabilize around 12 to 13 billion people, according to experts. Japan, whose population is stable, does not seem to have any more economic growth. Will countries with zero population growth experience zero economic growth?
Remi Simard, Jonquiere
What are the IMF and the World Bank for?
What is the difference between the World Bank and the International Monetary Fund? Are these two comparable or complementary organizations? How are they funded? Who lends to whom? According to what rules?
Martin Caron
Interest rates and recession risks…
I would like to know why interest rates on short-term loans are higher than long-term ones. I’m 66 and I don’t remember seeing this. Are we expecting a recession or are we expecting rates to come down soon?
R.Bilodeau
The growth of the railway industry
How much do you estimate the increase in rail traffic in Canada and the United States over the next ten years? Do railway companies pay the same taxes on petroleum fuels as other consumers?
John Perreault
Useful, a debt ceiling?
In Canada, is there a pre-established debt ceiling as is the case in the United States, a subject that seems to worry the stock markets and the entire American economic system? THANKS.
John Robitaille
Why is it important for a company to satisfy its shareholders?
Why is it important for a company to satisfy its shareholders? What difference does it make for a large company if shareholders are unhappy and sell their shares since they have already been issued and paid for? Similarly, when you buy a stock on the secondary market, the money goes to the person selling it, not to the company. Am I right ?
Yves Filiatrault
What is the relationship between GDP and the inflation rate?
I would like to understand how a country can have an economy with a GDP growth of less than 3%, while its inflation rate is more than 6%.
Chantal B.
Why do grocers give discounts on group purchases?
I want to know why grocery stores are forcing double purchase for more and more products. Why do traders use this practice?
Lyne Poupard
How does a bank manage the risk associated with rate changes?
I have a mortgage rate of 1.99% until June 2026. How does the bank make up the difference from today’s rates?
Michel Martel
Where will all this electricity come from?
Hydro-Québec is examining a project to build a 1,200 megawatt hydroelectric power station on the Petit Mécatina River. I am confused. According to Hydro-Quebec and Minister Pierre Fitzgibbon, Quebec needs 100 terawatt hours. Does that mean that it will be necessary to build a little less than 100,000 power stations like Petit Mécatina? I hope I am wrong in my calculations. Otherwise, we are very far from the mark.
Pierre Nadeau
Curb food inflation
Since the Bank of Canada seems to have only one tool to fight inflation, interest rates through its key rate, I am worried regarding the future if climate change were to cause price increases food (drought, floods, frosts, fires) and energy. How would raising interest rates actually help? I feel like it would just make life harder without affecting the price of food and energy. Have other means already been used in other countries to fight inflation?
Gilles Vinet, Blainville
What influences the 5-year fixed mortgage rate?
Hello, I would like to know if the increase in 5-year bond rates in the United States can influence 5-year fixed mortgage rates in Canada. THANKS.
Maia
Grant, say your name!
Do the federal and provincial governments subsidize oil companies in Canada?
John Perreault
Are our banks at risk?
Are our banks technically bankrupt? What would they do if we were all going to withdraw our money tomorrow morning? And what would our elected officials do in such a case?
Rene Masson, Quebec
What is the Registry of Lobbyists?
We often hear regarding the Registry of Lobbyists in the Business section. Recently in one of your articles, it was indicated that Ford had to update its registration in the register to take steps with various ministries in Quebec. What is the Registry of Lobbyists? Is it a kind of private club for companies? What is it used for ?
Luc Jeanson
Why is taxable income not identical in Quebec and Ottawa?
Hello, a question that has been bugging me for several years with the receipt of my tax slips. Why is the amount of employment income different on my federal T4 slip and on my provincial RL-1 slip? How come our governments can’t agree on the same definition of employment income? THANKS.
Francois Chouinard, La Prairie
Economics, a science?
How do we explain the weak evolution of knowledge in economics? The predictive models seem to us, for us from the outside, random, and appeal for a lot to intuition. During this time, the weather has made leaps and bounds, as well as our level of confidence in its predictions.
Michel Beauchemin, Metis-sur-Mer
How do banks report?
If my salary goes down, I consume less. If I consume less, the business around the corner sells less and might close. If it closes, the owner of the building no longer collects the rent and may not pay his [prêt hypothécaire]. If the bank no longer collects its [remboursements hypothécaires]to whom is she accountable?
Gilles Burns
Travel agency commissions
When we do business with a travel agent to book our flights and hotels during a trip, what is the remuneration of the travel agent? Does he charge us a commission? It’s never clear, it seems to me.
Denis Piche
What protection for Quebec travelers with a European carrier?
I would like to know, when traveling with a European company like Lufthansa, if a problem arises, whether European rules apply or Canadian rules because the ticket was purchased here.
Diane B.
The fate of foreign currencies
I would like to know what happens with our banknotes when we exchange them in other countries? When I go to Cuba for example and give a $20 bill to get the local currency, what do they do with those bills followingwards?
Stephane Loyer
Why is the Canadian dollar losing value?
I would like to know why the Canadian dollar is losing value once morest the American dollar when our economy is doing well.
M. Marion
Exchange Traded Fund Issuers and Possible Bankruptcy
I know exchange-traded funds aren’t guaranteed, but I wonder if the issuer of an exchange-traded fund goes bankrupt… what would happen to our money?
Jacques Larose
What is the impact of the “debt ratio” on a mortgage application?
Could you explain what is the “debt coverage ratio” used by mortgage lenders when analyzing a loan application? What importance does it have in the decision to grant or not a loan?
M. Villeneuve
Why is short selling allowed?
Spruce Point Capital is notorious for its short selling and negative reporting on the companies it targets. Why is this practice not considered market manipulation?
Martin Crete
Do variations in inflation add up?
When we talk regarding inflation, we hear that it is a 5% increase for June. In July, another 5%. Does that mean 10% in total?
denis caron
How is the federal government funded?
I would like to know how Canada’s debt works. When the federal government produces a deficit budget, the Bank of Canada lends it the missing money. But where does this money come from?
Jacques Robinson
How is the stock market dividend yield calculated?
I would like to know on what basis is the dividend yield per share calculated in the stock market news, day by day.
Michael Boisvert
Where do Loto-Québec’s jackpots come from?
I would like to know where Loto-Québec takes the money it distributes in all its lotteries? As far as I know, Loto-Québec is a government agency and since the government manages taxpayers’ money, does that mean that the government gives back money that is overpaid? If this is the case, Quebecers have every reason to complain regarding being overtaxed.
S. Paradis
Who benefits from high interest rates?
Apart from savers, who benefits from high interest rates?
C. Rivet
Diesel and natural gas, same fight
I would like to know why the price of diesel used to be cheaper than regular gasoline, before the recent price spike over the past few months, and now it is almost 50% more expensive than regular gasoline.
Gaetan Laberge, Montreal
How will raising interest rates slow down inflation?
I would like to understand how the increase in the interest rate might lower the price of carrots at the grocery store.
Georges Ledoux
Why do we say 75 basis points instead of 0.75%?
Why do we say that the Bank of Canada is raising its key rate by 75 basis points? This is confusing. Wouldn’t it be easier to say 0.75% or even 1% instead of 100 basis points?
Mario Courcy
How to prepare for a recession?
I’m 40 years old. I have never experienced a recession as a householder. Not even as an adult — except maybe for the short jitters of 2008! I see the recession as a big black cloud hovering over our heads. The reality is that I have no idea what it encompasses. What can we expect in terms of duration? How do you prepare for a recession?
Anne, Rigaud
Quantitative easing by central banks: what is it?
When we talk regarding central banks and the economy, what does the expression “quantitative easing” or “QE” mean in reference to the English term “quantitative easing”? What is this “quantitative easing” for a central bank like the American Fed? [Réserve fédérale]in addition to its interest rate decisions?
Mireille Dion, Montreal
How can they make a profit with a falling stock?
I still don’t understand the short selling actions. Buy a stock by betting on its fall and make a profit? How is it possible ?
André G.
But how the hell do they set the fixed rates
I wonder how the bond rates that dictate the fixed mortgage rates are influenced. Contrary to the publicized announcements of the central bank which inform us regarding the increases of the variable rates to come, the fixed rates remain a real mystery and their fluctuations seem to me impossible to predict. I’ve read regarding it, but haven’t quite figured out the mechanics. Be pedagogical, please.
Sophie B.
Stock markets: why post-closure transactions?
From one day to the next, I notice that trades in securities that I monitor as an investor are made following the stock market closes at 4:00 p.m. How do these post-closure transactions work? Why are they allowed? Which investors have access to it? Can they disadvantage investors who do not have access to them?
Normand Boisjoly
Why is Tesla’s stock worth more than Volkswagen’s?
Can you explain to me why there is such a disparity between a stock like Tesla which has been worth up to $900, when the company is making almost no profit, while a Volkswagen stock, which is a huge profit-making company worth regarding $200, that Ford is US$15.16 and GM is US$38?
Maurice Marier
Grants: electronic or in person?
At the Exchange, there are regular hours (9:30 a.m. to 4 p.m. on business days) and extended pre- and post-market hours. We understand that it works electronically. So what are brokers doing on the stock exchange floor?
Nicolas Clift
WTI, Brent and others
Every day, we are told regarding the price of oil and we use the terms “Brent” and “WTI”. To complicate matters, different prices per barrel are announced for each category. Could you give us an explanation of the nature of each of these terms?
Pierre Lemire
The S&P/TSX Composite Index: The Value of Points
When we say that the S&P/TSX has lost a point, what does that mean? What does the value of a point represent?
Minh Van Tran
The power of reserve currency
Why is the US dollar the reserve currency? What advantages does this bring to the United States?
Michael Jacques
Are rising interest rates affecting businesses?
Good morning. I would like to know if interest rate hikes will also affect companies, and how? I imagine they also have mortgages and loans to pay off.
Jean Courchesne
Who funds the International Monetary Fund?
I recently read an article in The Press whose title was “The IMF releases 1 billion dollars to support Ecuador”. Who provides the money to the IMF? Does this money earn interest? How are cash advance decisions made?
Normand Boisjoly
How does a commission-free broker generate their income?
Recently, online brokerage firms have offered to carry out transactions for the sale or purchase of securities free of charge. These companies are certainly not operating at a loss. It would be interesting to know where they get their income from when they offer this service free of charge.
Jacques Larose
What are the effects of monetary tightening on the financial and real estate markets?
Good morning. From what I understand, low interest rates and monetary easing by central banks have fueled the rise in stock markets and real estate. Interest rates are going up. What regarding monetary easing? What is the effect of monetary tightening on the market decline?
Gael Le Corre-Laliberte
Is the RESP still the best investment for a child?
My grandson turned 2 recently. Since he was born, on his birthdays and at Christmas, we put money in an RESP for him. For several years, we have heard that it was one of the best investments with the contribution of the government. But is this still the case? Given the economic situation, should we favor another investment for its future?
Lison Bouchard
Why so much volatility?
Financial advisors tell us to stay calm and consider the medium and long term for our actions. Why are the markets so nervous and volatile then?
Jocelyn Savoie
How is inflation calculated?
When it is announced that inflation is x % for the month of May, how is it calculated?
Lisette Provencher
Why is the price of gasoline displayed in tenths of a cent?
Gasoline is almost $2.22 a litre. I say almost, because in fact it is $2,219. I think it’s time to get rid of the insignificant tenth of a cent. I would be very curious to know how specialists in the field can explain to us how pumps can manage to calculate a measurement that does not even represent a drop.
Luc Desjarlais, Saint-Amable
Are seafood wholesalers filling their pockets?
Where are the huge profits of seafood wholesalers going? Or the difference between the price paid to fishermen and the price demanded from consumers, for example for crab and lobster?
Lucette Durand
Where do Hydro-Québec’s dividends go?
Are Hydro-Québec surpluses transferred to government coffers? If so, by what mechanism?
Patricia Goulet
Variations of the S&P/TSX and the S&P 500
How to explain that the daily variations of the S&P/TSX index are very often similar to those of the S&P 500, while their composition is different?
Jocelyn Montour
Unemployment and labor shortage
How can there be unemployment when there is a labor shortage?
Luc Bonin
At gold price
It is usually said that the price of gold rises during inflationary periods. It is also said to increase when there is a lot of uncertainty. However, despite the fact that these two factors come together, the price of gold has been fairly stable for two years and has even fallen recently. Is the above statement wrong or are there other factors?
Jacques L.
Why is the ruble not falling?
I would like to know why the ruble returned to its pre-war value despite the measures taken by NATO.
Bernard Fontaine
A look at GDP
How is the economy’s GDP calculated? Where does the data come from?
Yves Champagne
The Role of Gold in the Global Financial System
Would it be possible to have a fairly detailed article on the role of gold in the stability of Canadian, American or other currencies?
J. Damphousse
A CDPQ fund for everyone?
The performance of the Caisse de depot et placement du Québec is often praised. Why does it not offer the public an equivalent mutual fund, the investments of which would reproduce as automatically as possible the current investments of the Caisse? As a small private investor, I would love such a fund! Just a single fund sold without advice on the internet, intended mainly for retirees. It seems so obvious to me that there must be regulatory constraints that prevent it, but are they justified for the common good?
Luc Salomon
Is the government contributing to inflation with social housing?
Questions concerning the construction of housing, in particular social housing. How are they financed, ie how much money does the government put in and how much do the tenants pay? Moreover, is it true that the construction of this type of housing helps to slow down inflation? Or on the contrary, does it not contribute to inflation, with the demand for materials, land and workers to build these dwellings ?
Martin Frégeau
What use is the price/earnings multiple on the stock market?
I would like someone to explain to me the concept of the price/earnings multiple, which is frequently cited in various forms by analysts and managers of equity portfolios on the stock market. How is this price/earnings multiple calculated? Also, can the comparison of multiple prices/earnings between companies in the same sector be used to compare their level of high price or not on the stock market?
Andrée Nehma and Louise Voisard
A unique price all over the world
Hello, I would like to know if there are other products than oil whose price is fixed on the international market and why.
Marc Bourassa
The advantage of producing oil
Hello, I can understand that an oil importing country has no choice but to suffer the current market increases. But for a country like Canada, which is an oil exporter, why should the Canadian consumer pay such increases in the price per litre? The price at the pump should be related to Canadian production costs, plus a reasonable profit margin. How come the price at the pump increases so quickly with market speculation?
Real Meunier
The CELI
If we want to put money aside in a TFSA, can we add amounts regularly? Can we put in $1,000 a month instead of a single payment of $12,000 a year?
Chantal Desjardins
Interest rate and market value
My question stems from the context of anticipation of upcoming interest rate hikes by central banks in order to calm inflation in the economy. In the stock market, why do we say that higher interest rates can reduce the value of stocks?
Alain Wolff
What are the benefits of share buybacks?
Could you explain the ins and outs of corporate stock buybacks? What are the benefits, for the company, for the remaining shareholders, for the sellers, etc. ?
Alain Girard
What are the links between inflation and the key rate?
Could you explain the link between inflation, the key rate and bank interest rates?
Myriam Ariey-Jouglard
Who pays US taxes on Canadian softwood lumber?
Although I actively follow Canadian economic activity, I must confess that I do not quite understand how the application of the tax on softwood lumber crossing the border into the United States works. I would like to read an article that clearly explains the whole process, the application of the special taxes resulting from the American requirements, clearly showing the price differences. Why is it not only US customers (buyers of products) who bear the additional costs of products that cross borders?
Robert Raby
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