Customers are not pleased with Air Canada’s new baggage fees. Is Ottawa going to do anything about it?

Hello, readers! Welcome back to Business Cycle – a look at what The Globe and Mail’s business columnists are talking about this week. In the latest edition, we’re talking about the Bank of Canada’s latest half-point interest-rate cut, Air Canada’s latest baggage fees and TD Bank’s U.S. money-laundering saga. 

(Don’t forget - Subscribe to this newsletter from The Globe and Mail’s LinkedIn page to get a notification when the latest edition is published every Thursday.)

The latest Bank of Canada rate cut will drive these five personal finance trends in 2025

By Rob Carrick

The Bank of Canada has delivered its second half-point rate cut in a row, bringing the policy rate to 3.25 per cent from 3.75 per cent. The central bank also signalled that it will slow the pace of rate cuts going forward as the Canadian economy enters a period of economic uncertainty.

Personal finance columnist Rob Carrick points to new downside risks to Canada’s economic activity, specifically the threat of U.S. tariffs on Canadian goods, and what it means for borrowers, savers and investors in 2025. He writes that the financial uncertainties for 2025 are piling up, and these are the trends on interest rates, fixed-rate mortgages and the Canadian dollar to watch out for next year.

"Twelve months ago, we waited anxiously for interest rates to finally start falling and braced for the economy to lapse into recession. The view from here is more distinct – the Bank of Canada is firmly in rate-cutting mode, and the economy is, well, let’s just say it’s ducking a recession. A Donald Trump presidency could do some damage to your finances next year and beyond. Already, Mr. Trump’s threat of 25-per-cent tariffs on Canadian and Mexican goods has contributed to a weaker Canadian dollar and stalled declines for mortgage rates."

Are you worried about Canada’s economic future in 2025? Check out the full opinion piece here.

Airlines are nickel and diming travellers, but the real culprit is the government

By Ashley Nunes

Canadian passengers are not pleased with Air Canada’s new baggage fees. Starting in the new year, the airline will bar customers paying the lowest fare from bringing carry-on bags. The federal government isn’t happy either as Transport Minister Anita Anand noted her concern in a post on X: “I am extremely concerned. Canadians work hard and save up to travel. They rightly expect excellent service, not extra fees."

Contributing columnist Ashley Nunes argues that listening to Ottawa talk about fee creep is hypocrisy at its finest. He argues that the federal government imposes so many charges on the airline industry – for example, taxes on the airfare and security charges or “ground rent” from Canadian airports – and those fees eventually make their way to passengers in the form of higher ticket prices.

"Ottawa’s approach to aviation taxation should be singled out for what it is: A surefire way for the government to raise cash and a money-grubbing exercise that does nothing to improve the passenger experience while doing everything to fill government coffers. This needs to change."

What do you think needs to be done to bring down high airfare costs for Canadians? Check out the full opinion piece here.

Can TD Bank ever recover from its U.S. money-laundering saga?

By John Turley-Ewart PhD, MBA, CAMS

Last week, Toronto-Dominion Bank released disappointing fourth quarter results amid its U.S. anti-money laundering (AML) saga. Canada’s second-largest lender suspended its financial targets for 2025 and signalled that investors will have to wait until next year for updated growth expectations. TD’s share price tumbled 7 per cent when the news hit the markets. 

This week, contributing columnist John Turley-Ewart PhD, MBA, CAMS ponders whether TD Bank will ever recover from its money-laundering woes. He argues that the fourth-quarter results document the price TD is paying for its U.S. AML failures, and it’s a worrisome sight.

"TD Bank is on the regulatory clock. It has a five-year U.S. probationary period that will decide whether it can return to being a growth-orientated, North American bank or if it will have to make do with being a shadow of what generations of TD bankers dreamed it could be. To pass what will be annual tests to determine improvement, TD needs to remake itself from the inside out. And there is no guarantee it will succeed."

Do you have a changed opinion of TD Bank in the wake of its anti-money laundering saga? Check out the full opinion piece here.

More business headlines we’re following this week: 

• The 100 most livable cities in Canada for 2024
• It was once Europe’s biggest car factory. Today it’s an icon of Europe’s deindustrialization
• This AI replica of my dead mother has plenty to say about the rise of the digital grief industry

The Globe's business opinion pieces are commissioned and edited by Ethan Lou. If you would like to write in this section, please send pitches to elou@globeandmail.com. 

Thank you for reading our latest edition! We'll be back next Thursday with another Business Cycle roundup.

Until then, sign up for more great newsletters from The Globe and Mail and continue reading at www.theglobeandmail.com. And let us know what you think by sending an email to audience@globeandmail.com.