Understanding rate shocks from the Bank of Canada It was a busy week for Canada’s economy as most experts and households were caught off guard by a supersized rate hike. Let’s break down what happened and what it means for you. The Bank of Canada raised its benchmark interest rate by a full percentage point, beating expectations for a 75-basis-point hike. Governor Tiff Macklem said Wednesday that the central bank went with the oversized step because it was “front-loading” interest rate hikes, arguing going higher faster would help to tame rampant inflation while skirting a recession. But economists who spoke to Global News said that as the odds of hitting that “soft landing” narrow, a recession might not be the worst-case scenario. A recession could be painful, but what would be harder on households is a spiral of higher wages leading to higher prices in turn, entrenching inflation for the long term. That might be cold comfort for some Canadians who are feeling the pinch of higher interest rates and surging inflation. Variable mortgage rate holders are among those feeling the heat of rising rates upfront, as monthly costs have ballooned by nearly $200 overnight for one homeowner who spoke to Global News. Read more about the impact and fallout from the Bank of Canada’s big rate hike this week.  Rents heat up as housing activity cools One of the most immediate impacts of rising interest rates has been a cooling in the Canadian housing sector, with June figures showing a 24 per cent decline in year-over-year home sales in Canada. But rents have only heated up as Canadians priced out of home ownership stick to rental units, putting pressure on an already tight market. The average rent for all Canadian properties was $1,885 monthly in June, according to Rentals.ca, an increase of 9.5 per cent annually. The average one-bedroom apartment in Vancouver hit $2,418 in June, an increase of nearly 20 per cent year over year. Paul Danison, content director at Rentals.ca, told Global News that with ownership increasingly out of reach for Canadians, the rental market is left to accommodate more and more people. And with interest rates still on a rising path, relief for renters could still be a long way off. "I think we're in for a little bit more pain. I don't see rental rates going down any time in the near future,” Danison said. Read more about how economists say this complicates the Bank of Canada’s efforts to tame inflation.  What are you owed for the Rogers outage? The July 8 Rogers Communications outage affected a wide swath of businesses and consumers alike, but the company’s CEO has promised to “do the right thing” and compensate affected users. Details crystallized this week about what the telecom giant feels “the right thing” is, promising its customers that they would be compensated for five days’ worth of service charges for the single-day disruption. While that’s more than the single day’s worth of compensation the company offered for an outage last year, some advocates felt that wasn’t enough for small businesses that lost a day of revenue in some cases or scrambled to find workarounds. Read more about how Rogers’ compensation will work in our explainer. ________________________ – THE QUESTION – “I’m an employee of a small business that offers private shares as part of compensation. Is there any way to sell them publicly? Or to another investor? I would like to be able to cash out instead of being stuck with this stock.“ — A Money123 reader “The short answer to this question is most likely no. Technically speaking, a transfer of shares (sale) in a privately held corporation is possible, however, this cannot occur without a director's resolution approving the transfer, meaning the majority shareholders of the company would need to approve your sale to another investor/holder. I would assume in most cases, the shares are granted to employees to give a stake in the future potential of the company — to give you ‘skin in the game,’ so to speak. It is unlikely that the owners of the company would want individuals who are not employees holding shares. In addition, restrictions on who can buy or sell the company shares would most likely be set out in a shareholder's agreement or the articles of incorporation of the company. To put it simply, even if you were able to find a willing buyer for these small business shares, you would require approval from the owner(s) of the company before the sale would be allowed. That is if the sale is not already specifically prohibited via restrictions in a shareholder's agreement. It is also worth noting that transfer/sale of private shares involves a lot more than with buying/selling shares in a public company (stocks). Transfers of public company shares take place according to the rules set out by the provincial Securities Transfer Acts and most often are openly traded on a stock exchange (e.g. Toronto Stock Exchange). The transfer of private shares involves share purchase agreements, directors' resolutions and other legal documents. So, even if the share sale was allowed and agreed upon, the legal costs to draw all of this up may cut into any financial incentive to do so.“ -Derek Dedman, vice-president, portfolio manager, WDS Investment Management ___________________________ Want your money question answered by an expert? Get in touch! | 
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