OTTAWA — Canadians have amassed a $2-trillion mountain of household debt that’s casting a big shadow over the timing of the Bank of Canada’s next interest rate hike, governor Stephen Poloz said in a speech Tuesday in Yellowknife.

To Poloz, the “sheer size” of debt burden also means its associated risks to endure for a while, although he’s optimistic the economy can navigate them.

The debt pile, he said, has been growing for three decades in both absolute terms and when compared to the size of the economy — and about $1.5 trillion of it currently consists of mortgage debt.

The central bank has concerns about the ability of households to keep paying down their high levels of debt when interest rates continue their rise, as is widely expected over the coming months.

“This debt has increasing implications for monetary policy,” he said in his address to the Yellowknife Chamber of Commerce.

Poloz has introduced three rate hikes since last July following an impressive economic run for Canada that began in late 2016.

But the central bank stuck with its benchmark rate of 1.25 per cent last month as it continued its careful process of determining the best juncture for its next hike. The bank’s next announcement is May 30, but many experts only expect Poloz’s next increase to come at July’s meeting.

Poloz said Tuesday that the volume of what Canadians owe is one of the key reasons why the bank has been taking a cautious approach to raising its trend-setting rate. He called it an important vulnerability for individuals and leaves the entire economy exposed to shocks.

“This debt still poses risks to the economy and financial stability, and its sheer size means that its risks will be with us for some time,” Poloz said.

“But there is good reason to think that we can continue to manage these risks successfully. The economic progress we have seen makes us more confident that higher interest rates will be warranted over time, although some monetary policy accommodation will still be needed.”

Poloz said debt is a natural consequence of several factors, including the combination of a strong demand for housing and the prolonged period of low interest rates maintained in recent years to stimulate the economy.

Next hike must be well-timed

The governor also provided detail on issues the bank is examining as it considers the timing of its next rate increase.

If it raises rates too quickly, the bank risks choking off economic growth, falling short of its ideal inflation target of two per cent and could lead to the type of financial stability risk it’s trying to avoid, he said.

But if the governing council lifts the rate too slowly, Poloz said it could intensify inflationary pressures to the point it overshoots the bank’s bull’s-eye. Poloz added that moving too gradually could also entice Canadians to add even more debt and further boost vulnerabilities.

In his speech, he also noted several other areas of concern the bank is monitoring closely as it considers future hikes. They include the economic impacts of stricter mortgage rules, the ongoing uncertainty about U.S. trade policy, the renegotiation of the North American Free Trade Agreement and a number of competitiveness challenges faced by Canadian exporters.

“These forces will not last forever,” Poloz said.

Previously On HuffPost:

TORONTO — Ontario residents will be able to smoke recreational cannabis wherever the smoking of tobacco is permitted, the Progressive Conservative government said Wednesday, loosening rules established by the previous Liberal regime.

The government will also not put a cap on pot shops when it starts licensing and regulating the province’s private cannabis retail marketplace, and municipalities will have until January to opt out of hosting the stores.

The details were announced by Ontario Attorney General Caroline Mulroney and Finance Minister Vic Fedeli a day before new legislation on pot rules was set to be tabled.

Under previous consumption rules, those over 19 would have only been able to smoke cannabis in a private Ontario residence when pot becomes legal Oct. 17. The proposed legislation eases the regulations to allow marijuana to be smoked in the same places as cigarettes.

“We’re aligning with the Smoke-Free Ontario Act,” Mulroney said, referencing the provincial set of rules on tobacco use. “If you’re able to smoke tobacco in your home then you’ll be able to use cannabis as well.”

Smoking pot in vehicles or boats that are being operated will be prohibited. Breaking the rules would see people subjected to fines ranging from $1,000 to $5,000 upon conviction.

The government announced last month that it would sell recreational cannabis online when it is legalized next month, with private retail stores set to be in place by April next year.

On Wednesday, the province said the Alcohol and Gaming Commission of Ontario will regulate the marketplace, giving it the power to grant — and potentially revoke — licences as well as enforce provincial rules on cannabis sales.

The province said that anyone looking to open a pot shop will have to apply for both a retail-operator licence and a retail store authorization for each potential location.

“We want to make sure the consumers are protected but we want to open up the marketplace,” Fedeli said. “This is an opportunity for small business to get involved. We want to have as many participants as possible be involved.”

Breaching provincial rules on cannabis sales would preclude someone from ever obtaining a licence in the future, the government said.

“Any engagement with organized crime, any record of providing youth cannabis, any of that would bar you from participating in the private cannabis market,” Fedeli said. “If you are still operating an illegal retail operation after Oct. 17, you would not be able to get a licence in Ontario.”

A government agency called the Ontario Cannabis Retail Corp. is slated to handle the online cannabis sales and will also be the wholesaler to private retail stores.

Ontario municipalities that want to opt out of hosting pot shops will have until Jan. 22, 2019 to do so under the new legislation. The province would also have the ability to set a distance buffer between pot shops and schools.

The previous Liberal government had planned to give the Liquor Control Board of Ontario a monopoly on the sale of recreational cannabis, opening as many as 150 retail stores by 2020. Opposition critics have said they prefer a public sale model because LCBO staff have the experience and training to ensure socially responsible access.

Market may ‘flood’ Ontario, MPP says

Liberal legislator Nathalie Des Rosier said the Tories’ new model could result in a large number of pot shops springing up that will be a challenge to regulate.

“It certainly is a complete free market that may flood Ontario,” she said. “The cautious approach that we had used is a little bit undermined here.”

Green Party Leader Mike Schreiner lauded the Tory plan, but cautioned the government to keep its focus on small business and not large corporations in the pot market.

“The cannabis market should not be a windfall for large corporate players with inside access to the premier’s office,” Schreiner said in a statement. “I will be standing up for small, Ontario-owned businesses and job creators. I will also be standing up for Indigenous communities to be involved in the cannabis market.”

Robert Schwartz, a University of Toronto professor specializing in cannabis distribution and public health, said the government’s move to align consumption rules around the laws that already apply to tobacco consumption make sense.

“It’s going to create challenges for people who live in multi-unit dwellings, but it’s already a challenge,” he said. “There are already a lot of people in these dwellings who are complaining about second-hand smoke from cannabis and therefore there are some condominiums that are going smoke-free completely which is a good thing.”

Schwartz, who is also the executive director of the Ontario Tobacco Research Unit, said the government needs to stress to people that smoking cannabis is not healthy.

“It’s really important to communicate to people that they should not be smoking,” he said. “They should be using it in another ways. Preferably, you’d have a distinction between smoking and vaping, not that vaping is benign but it’s undoubtedly better than smoking.”

WINNIPEG — A Winnipeg city councillor has been charged with sexual assaulting a woman six months ago.

Russ Wyatt, 48, was arrested Tuesday after lab results came back, and has been released pending a future court date, a city police spokesman said.

Const. Rob Carver would not reveal details of the allegations on Wednesday, other than to say the alleged crime is a “serious sexual assault” that occurred in a home that was not Wyatt’s on Jan. 14.

The alleged victim is a woman known to Wyatt, but who is not his wife, and is not believed to be a city employee, Carver added.

Wyatt was interviewed in January and the charge is only being laid now because of standard investigative procedures, he said.

“Witnesses are interviewed and then suspects are interviewed,” Carver said.

“The delay in sexual assault charges is almost always based on getting lab results back … and it takes a long time.”

Wyatt said he is innocent.

“I have no comment to make regarding the allegation against me other than to say that I am innocent of any wrongdoing,” he said in an email.

“I will defend myself in a court of law and will only respond further to the allegation in a court room.”

Mayor shocked to learn of charge

Wyatt took a leave of absence from city council in January and revealed in March that he had entered a rehab program for substance abuse. He returned to council in May.

In June, he told media he was not ruling out running for mayor in the municipal election slated for October.

Under the city’s charter, councillors are only removed from office for criminal offences after a conviction.

Mayor Brian Bowman said he was shocked to learn of the charge.

“At no time until today did I learn that there was a criminal investigation that was ongoing,” Bowman said Wednesday.

The charge facing Wyatt is very serious, he added.

“This matter is now before a court of law. There is an independent process and we’ll obviously respect that process going forward,” he said.

“My immediate thoughts, as we learn that there is an alleged victim, is to think about her.”

Also On HuffPost:

Ontario will face electricity shortages in the coming years, as the loss of supply from a planned shutdown of a major nuclear power plant is made worse by the provincial government’s cancellation of renewable energy projects.

In a recent forecast, the Independent Electricity System Operator (IESO) — the Crown corporation that runs the province’s electric grid — predicted that, if nothing changes, Ontario will start seeing electricity shortages during peak summer periods starting in 2023 and continuing thereafter. The report also forecasts shortages during peak winter usage from 2025 to 2028.

The province will be short about 1,400 megawatts of capacity by 2023. That’s the equivalent of roughly half the output of Ontario’s Pickering nuclear power plant, which serves 1.5 million people.

Watch: Two-thirds of Canada’s energy comes from renewable sources (story continues below)

The IESO says the plant’s shutdown, which will take places in stages from 2022 to 2024, is the principal reason for the looming shortage. The plant is coming to the end of its life cycle. Long-running refurbishments at other nuclear power plants will also limit the province’s electricity supply.

But the cancellation of 758 renewable energy projects, which the government of Premier Doug Ford announced as one of its first moves, widens the gap even further. Ontario will forgo the production of some 443 megawatts of energy, according to earlier reports.

The government argues the projects were too expensive, and cancelling them will save taxpayers some $790 million. Industry insiders disputed that estimate, noting that the cancellations themselves could end up costing taxpayers money. They said the cancellations would mean job losses.

In an email to HuffPost Canada, the IESO stressed that there is time to address the problem.

“There is no immediate need to act to fill the gap now,” a spokesperson wrote, adding that “the potential gap emerging in the next five years is proportionally very small.”

The spokesperson said the best approach “is to wait until we have more certainty about the size of the capacity gap. There are enough lower cost resources that can be developed with a three year lead time to meet a 2023 resource gap.”

Carbon emissions on the rise again

The shutdown of the Pickering plant, combined with fewer planned renewable energy sources in the mix, means that Ontario will rely more on natural gas plants to generate electricity in the coming years, the IESO report showed.

That means carbon emissions from electricity generation will begin to rise again in the coming years — though not to the high levels seen before the previous provincial Liberal government eliminated the use of coal-fired plants.

In its long-term forecast, the IESO sees carbon emissions from electricity rising from less than 3 megatonnes per year today, to more than 10 megatonnes by 2035. However, that is still far less than the 35 megatonnes recorded in 2005, before coal plants began to be phased out.

— With a file from The Canadian Press

TORONTO — Ontario Premier Doug Ford’s demand that the federal government pay Toronto $72 million to cover housing costs for asylum seekers hasn’t gone over well in Ottawa.

Federal Immigration Minister Ahmed Hussen’s office insists Ford’s government needs to stop “playing politics with asylum seekers” and take an active role in helping to find a solution to Toronto’s looming shelter crisis.

“It’s very disappointing to see the Ontario government use this as a way to score political points on the backs of asylum seekers who are seeking our protection,” Hussen’s spokesman Mathieu Genest told HuffPost Canada.

He said Canada’s international obligations aren’t limited to the federal government. “It’s something that all levels of government have to work together to live up to,” Genest said.

Watch: Trudeau says he explained asylum-seeking system to Doug Ford

Genest told HuffPost the federal government wants to recreate Quebec’s “well-managed” system of triaging refugees, but headway on that plan requires provincial participation.

Ontario’s legislature resumed Wednesday with a new Progressive Conservative government in power. Ford’s government is expected to bring increased pressure over the federal handling of an influx of irregular migrants crossing into Canada.

Ford echoed Toronto Mayor John Tory’s request for $72 million in federal funds to cover the costs from supporting the increase of asylum seekers entering the city’s crowded shelter system.

“They created this mess and we’re expecting them to pitch in and help,” the premier said in a statement.

Situation ‘urgent’ in Toronto

Toronto Mayor John Tory appealed to the federal government in June for funding to help accommodate the influx of asylum seekers.

Unanticipated costs — related to food, accommodation, and staffing — set Toronto back $64.5 million for 2017 and 2018, according to city data.

The city has spent $19.2 million on food in the first quarter of 2018, compared to $7 million in 2017. The cost of housing newcomers have also gone up from $6.4 million last year to $17.5 so far this year.

Support services, including accounting, staffing, and communications has also gone up from $2.3 million last year to $6.3 million this year.

City documents call the situation “urgent,” noting the average number of refugee claimants in Toronto shelters each night has increased from 459 in 2016 to 2,683 as of May 2018.

“We need help. We cannot continue to do this alone. We just don’t have the resources to do it alone,” Tory said at the time. He added the municipality is working under an Aug. 9 deadline to find a solution before students return to Centennial College and Humber Colleges, two campuses that contributed 800 emergency contingency shelter spaces while dormitories were empty during summer.

Ontario cabinet minister says feds should ‘know better’

The federal government has so far pledged an initial $173 million to increase border security and an additional $50 million to help three provinces (Quebec, Ontario, and Manitoba) with immediate housing costs to accommodate asylum seekers.

Of that $50 million, $36 million has been earmarked for Quebec; $3 million for Manitoba; and $11 million for Ontario. It has yet to be confirmed how much of the $11 million will be allocated for Toronto.

Ontario cabinet minister Lisa MacLeod, who’s been tapped to lead the province’s immigration file, denied reports last week that the province is pulling co-operation with the federal government on the Canada-Ontario Immigration Agreement signed in November.

“There are very clear rules. There are illegal ports of entry for those seeking asylum against persecution. We will always welcome people who follow that process,” MacLeod said in a news conference.

“It’s disturbing that the prime minister and others are deliberately confusing these legitimate refugees with these illegal border crossers. Frankly, they know better,” she said.

Calling asylum seekers “illegal border crossers,” MacLeod said refugee claims are supposed to be processed within 60 days, but a backlog has pushed that timeframe to two years.

Having refugee claimants in temporary housing for an extended period of time strains provincial resources and threatens “the services that Ontario families depend upon,” she said.

Tories and NDP want emergency meeting

Frustration is also building at the federal level with both the Conservatives and NDP pressing the government Wednesday to hold an emergency committee meeting to address the swell of asylum seekers crossing irregularly over the Canada-U.S. border.

NDP immigration critic Jenny Kwan criticized the government for being slow to condemn U.S. President Donald Trump’s “anti-immigrant and racist policies,” which she suggested is bringing a summer rush of asylum seekers to the Canadian border.

In a statement, Kwan accused the Liberal government of dragging its heels and took a swipe at the Conservatives’ tact on the issue, which she likened to taking a “page from Trump” to “shut down the border to asylum seekers.”

Conservative immigration critic Michelle Rempel said the federal government’s response so far has been limited to spend “hundreds of millions of taxpayer dollars on temporary, band-aid solutions.”

Stretching Canada’s immigration system without “concrete policy solutions” will undermine its integrity, she said in a statement.

“The time to act is now, before this situation gets any worse. We know that shelters are at capacity, and deadlines at university dormitories are looming.”

OTTAWA — The federal government will not appeal the court decision that tore up cabinet approval for the Trans Mountain pipeline expansion and is appointing former Supreme Court justice Frank Iacobucci to oversee a new round of consultations with Indigenous communities.

Prime Minister Justin Trudeau said his government will follow the “blueprint” laid out by the Federal Court of Appeal in August, which said Ottawa had not properly consulted with Indigenous Peoples because it listened without trying to accommodate concerns.

“If we were to appeal it would take another few years before we could begin construction and we feel the blueprint the court laid out for TMX will allow us to get things done quicker and get our resources to new markets other than the United States in a more rapid fashion,” Trudeau said Wednesday.

More from HuffPost Canada:

Natural Resources Minister Amarjeet Sohi said the government does not intend to restart Indigenous consultations from the beginning, but will use them to address the weaknesses the court identified.

He said the government will make “a sincere effort to listen, consult and offer accommodation where those accommodations are possible,” but accommodation does not mean Indigenous communities opposed to the project will have authority to halt it.

“We also understand there are still groups that will still oppose this project,” Sohi said. “That’s fine. That’s their right to do so. But that does not mean that if we fulfil our constitutional obligation that those groups may have a veto to stop this project.”

The Trans Mountain expansion would triple capacity of the existing pipeline between Edmonton and Burnaby, B.C.

Some Indigenous communities on the coast of British Columbia are adamantly opposed to new energy projects that affect their traditional territory, with concerns about higher risk of oil spills, limited knowledge of how the diluted bitumen the pipeline will carry behaves when spilled in water and further stress for the Southern resident killer whales from more oil tankers in the Salish Sea.

Also On HuffPost:

The court decision also said the federal project approval was invalid because the National Energy Board failed to properly assess and take into account the environmental impact of having 35 tankers a month in the sea, up from about five now. The risks to orcas were a particular concern.

Last month, Sohi ordered the board to redo an environmental review of the project’s risk of oil spills and the effect on marine life due to increased tanker traffic. The board has until the end of February to report.

Iacobucci’s first task will be to work with the federal government, First Nations and Metis leaders to design the new consultation on Indigenous issues. Then he will oversee the process to ensure each step is in keeping with the court’s ruling.

The new round will involve consultations with 117 Indigenous communities affected by the project. The government is allotting twice the resources of the last consultation, but Sohi’s office could not say Wednesday what the budget would be or how many people would be assisting Iacobucci.

Sohi said he there is no deadline for the process because that could hinder truly meaningful consultation.

Iacobucci served on the Supreme Court from 1991 until his retirement in 2004. He recently served as Ontario’s chief negotiator with the Chiefs of the Matawa Tribal Council on the Ring of Fire, a proposed mining and smelting project in Northern Ontario. He resigned from that role when the Doug Ford government was elected in Ontario.

Prior to that he spent two years consulting for the provincial government on how to get more Indigenous people on juries in Ontario.