The Surrey Board of Trade is warning that interest rate hikes will take their toll on business investment and consumer spending.
Canada’s central bank — for a third time in 2018 — raised its benchmarch interest rate on Oct. 24 by a quarter point to 1.75 per cent.
“Surrey is comprised primarily of small and medium-sized businesses,” said Anita Huberman, CEO of the board. “The Surrey Board of Trade is concerned the interest rate increase will impact business investments and consumer spending. We remain concerned about slowing growth as we look ahead in 2018 and into 2019, especially in light of trade protectionist strategies, USMCA uncertainty and continued regulatory burden on companies.”
Huberman noted that people have more money to spend when they’re paying less interest, and this creates a “ripple effect” through the economy.
Businesses benefit from lower interest rates, she added, and with one-third of Surrey’s land base being agricultural, low interest rates encourage farmers to invest in equipment “and other critical investments.”
While the Bank of Canada anticipates economic growth to continue, Huberman said, the Surrey Board Trade “is not certain about this economic confidence.”