The Canadian dollar had its strongest day in nearly four weeks after Alberta’s referendum delivered a clear verdict for remaining in Canada, easing a political risk that had hung over the currency for months. The loonie rose as much as 0.55 per cent against the U.S. dollar as results showed roughly three-quarters of voters opting to stay.
Prime Minister Mark Carney responded to the result by saying Ottawa and Alberta should work together to bring immigration to sustainable levels rather than pursue constitutional change, and he pointed to federal efforts that have already reduced arrivals of international students, temporary foreign workers and asylum seekers. Elections Alberta’s unofficial count and CBC’s projection both pointed the same way: a decisive remain win, with official results scheduled for October 29.
Currency traders were also looking ahead to the Bank of Canada’s October 28 decision. September inflation rose to 3.1 per cent, and expectations have grown that the central bank could raise interest rates — a move that would lift borrowing costs, particularly for households holding variable-rate mortgages and loans.
For Alberta, the referendum also included four immigration questions, and early reporting suggested majority support for proposals giving the province more control over immigration and restricting some services for temporary residents. How Ottawa and Edmonton negotiate those issues will shape the next phase of the federal-provincial relationship.
