Gas prices have never been higher — but Canadians still aren't jumping on public transit - CBC News

For several years, Luis Virla would hop on a bus and then transfer to a train as part his commute to work in Calgary. But like many, once the pandemic began, he hit the brakes on using transit.

Even now with pandemic restrictions nearly gone and his anxiety about catching the virus easing, the 36-year-old still isn't shuttling through Calgary on transit for his job at a technology startup. Instead, he spends most work days at home.

If he needs to go into the office, he'll either drive or catch a ride.

"I have taken transit very little since the pandemic," said Virla.

• Have a question or something to say? Email: ask@cbc.ca 

As part of a family of four, including two young kids, he realizes he'll have to get back into the habit of using the bus and train eventually because of his one-car household.

"I would definitely take transit again, but I probably wouldn't want to be commuting everyday," he said, preferring more flexibility.

Transit ridership across the country is still noticeably down compared to pre-pandemic levels, even as more people return to the office and gas prices hit record-setting highs.

Ridership is increasing at Calgary Transit, but it's still only about half of what it was before the pandemic. (Geneviève Normand/Radio-Canada)

Long recovery ahead

While vehicle use and air travel have nearly fully recovered from the pandemic, transit use may still take a few years to return to normal levels, observers said.

The most recent ridership figures from Statistics Canada come from March 2022. This was the twelfth straight month of year-over-year growth in urban transit. Still, ridership is only 52 per cent of what it was at the beginning of the pandemic in March 2020.

"The nature of work and work-related travel has changed significantly post-pandemic," said Raktim Mitra, an associate professor at Toronto Metropolitan University's school of urban and regional planning.

More people are walking and biking when they can, he said, and it can be tough to break the habit of driving. Some commuters are still space-conscious and worried about COVID-19, after being told to physically distance for much of the last two years, he added.

"My assumption is that it'll take at least two, three, four years for us to go back to where we were, if we ever go back," he said.

The need for commuting has declined and could remain that way for five years or more, says Raktim Mitra with Toronto Metropolitan University. (Craig Chivers/CBC)

The most recent employment numbers show about 19 per cent of employed Canadians are still working from home, compared to 30 per cent during much of the pandemic. About five per cent have a hybrid arrangement where they split their time between the office and working from home.

Calgary has experienced among the highest recovery of downtown weekday foot traffic compared to pre-pandemic levels in North America, according to an index by commercial real estate services firm Avison Young, which uses aggregated cellphone location data.

Still, the influx of workers to the city's core is driven mainly by car and truck. Calgary Transit's overall ridership has increased recently, reaching about 55 per cent of pre-pandemic levels.

"Calgary is heavily influenced by people who like to drive. And our downtown market has a lot of people that historically have always wanted to drive work. So that has allowed people to feel more comfortable with regards to how they go back to the office," said Todd Throndson, Avison Young's managing director in Calgary.

WATCH | Calgary and Edmonton are leaders in North America with a rebound in downtown activity :

Financial sector not as quick to bring workers back to the office compared to energy industry

14 hours ago

Duration 2:29

There are different trends emerging about the return to the office across the country, says Todd Throndson, Avison Young's managing director in Calgary.

Many commuters in the city are noticing the trains and busses can be spacious on Mondays and Fridays, while full the other days of the week; many companies only require workers to be in the office from Tuesday to Thursday.

"There are some interesting things happening with ridership in terms of that return to the office," said Stephen Tauro, a Calgary Transit spokesperson. "We are in a transition."

Ridership in the city is slowing picking up and is expected to gradually increase over the summer, Tauro said, with an anticipated jump in September with the return of school and more people back to the office. Still, he's unsure when ridership will fully recover.

Uneven recovery

Transit use varies across the country, with some Ontario cities like Brampton and London reporting ridership recovering to more than 70 per cent of pre-pandemic levels. In some small cities, however, ridership is down 80 per cent compared to 2019 levels. 

"I think a lot of people are returning back to work and because of that, it's getting busier and busier by the day," said Zain Mazhar, before he boarded a bus as part of his commute from Mississauga to Ajax, Ont.

For most of the last year, Tina Huang would usually have empty seats beside her on the bus in Toronto, but "now it's packed in there."

Fewer riders meant a sharp drop in transit revenues over the last few years, which was offset by billions of dollars in temporary government support. Many transit agencies are still juggling providing more routes and services to entice customers back, while trying to keep costs in check.

WATCH | How ridership is returning even with many people not fully back to the office:

Public transit demand could reach inflection point as immigration picks up and more workers return to the office

14 hours ago

Duration 1:35

Transit agencies should prepare for increased ridership, says Josipa Petrunic, president of the Canadian Urban Transit Research & Innovation Consortium.

Some in the industry are optimistic about ridership quickly picking up across the country, especially in major cities.

This is the time when transit agencies should be planning for demand to increase, said Josipa Petrunic, president of the Canadian Urban Transit Research & Innovation Consortium, a Toronto-based non-profit group.

She anticipates hitting an inflection point as more people continue to return to the office, combined with rising immigration and population levels.

"Suddenly people are going to get really upset about a transit service that is not fast, not convenient, not on time, not getting them to where they need to get to," she said. "Meanwhile, the gasoline price is through the roof and it's breaking the bank."

Overall, Petrunic expects it will take two years for transit ridership across the country to overcome the pandemic and return to 2019 ridership levels.

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2022-05-31 19:51:09Z
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Interest Rate Increases Would Have “Tremendous Impact” on Provincial Budget: Coady - VOCM

Rising interest rates will have a “tremendous impact” on the province’s overall budget.

Finance Minister Siobhan Coady was reacting to word that the Bank of Canada will increase its benchmark interest rate by half a percentage point to 1.5 per cent tomorrow.

The measure, being taken to cool an overheated Canadian economy, will have an impact on those who carry mortgages and debt.

(Bank of Canada via Google Maps.)

That includes the provincial government, which is $17-billion in debt. The province is borrowing $2.7 billion dollars this year. Minister Coady says government has been doing what it can to leverage the lowest borrowing costs. The province set aside $1-billion in borrowing costs in this year’s budget.

The province is borrowing at “well over” 3 per cent in the 30-year range, but exact overall impact is difficult to say, says Coady.

“We borrow in different tranches,” says the Minister, “sometimes we borrow at 60-90 days, sometimes we borrow at 5 year, 10 year, and 30 year intervals.” She says that is done so that they aren’t stuck with all their debt in either long-term or short-term rates. The latest interest rate increase however will have “a tremendous impact on our overall budget.”

Minerals Boom and Labour Demand Among Factors that Could Prevent Recession in NL, says Investment Advisor

A local investment advisor says there are a number of key factors that could prevent the province from tipping into recession once interest rates increase again on Wednesday.

The Bank of Canada is expected to increase its benchmark rate by half a percentage point, and the major banks will likely follow suit with increases to their lending rates.

Larry Short, Senior Investment Advisor with Short Financial, a branch of IA Private Wealth in St. John’s, says while there are concerns the rate hike could tip the country into an economic recession, a number of factors are working in our favour.

He cites the current minerals boom and the demand for labour as examples that differ from previous recession periods.

He says recessions tend to be a year-and-a-half to two years out from when the central bank starts to raise its key interest rate, “so I wouldn’t be yet as alarmed as some commentators have been.”

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2022-05-31 17:23:00Z
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Hepatitis A outbreak in the US, Canada: What we know so far - Al Jazeera English

The virus is likely to have spread due to contaminated organic strawberries sold between March 5 and April 25.

The United States and Canada have reported an outbreak of hepatitis A, which is likely to have spread due to contaminated organic strawberries.

The strawberries, which were distributed nationwide, were sold under the brand name FreshKampo or HEB between March 5 and April 25, the US Food and Drug Administration said in a statement late on Saturday.

There have been 17 infections reported in the US with 12 hospitalisations, while 10 infections have been reported in Canada. In the US, at least 15 cases were reported in California, while in Canada four cases were reported in Alberta and six in Saskatchewan.

The FDA said the fruit was sold nationwide in at least nine grocery chains including Trader Joe’s and Walmart, while the Public Health Agency of Canada (PHAC) said berries were sold between March 5 and 9 at stores in Saskatchewan and Alberta, and are no longer available for purchase in Canada.

“People who purchased the fresh strawberries and then froze those strawberries for later consumption should not eat them. They should be thrown away,” the FDA said.

Here is what we know about the outbreak:

What is hepatitis A?

According to the FDA, hepatitis A is a contagious virus that causes inflammation of the liver.

It is primarily spread when an uninfected and unvaccinated person ingests food or water contaminated with the faeces of an infected person. The disease is closely associated with poor sanitation or hygiene.

The WHO estimates that in 2016, 7,134 people died from the disease (accounting for 0.5 percent of the mortality due to viral hepatitis).

However, unlike other types of hepatitis, hepatitis A does not lead to chronic disease. But, on rare occasions, a small proportion of people infected could die from an acute liver failure.

The World Health Organization says that the spread of this virus occurs “sporadically and in epidemics worldwide, with a tendency for cyclic recurrences”. Epidemics related to contaminated food can spread rapidly.

What are the most common symptoms?

The FDA says that the most common symptoms include loss of appetite, diarrhoea, fatigue, nausea, vomiting, stomach cramps or abdominal pain, dark urine, and yellowing of the eyes and skin.

In some cases, especially with children under the age of six, they might not show any symptoms.

Symptoms typically show after 14 to 28 days of exposure to the virus, and they usually last less than two months. According to Canadian health authorities, mild symptoms might last only one or two weeks, while severe symptoms might last up to nine months.

What are the treatments available?

According to health authorities, there is no treatment available for hepatitis A.

Experts advise infected people to rest, drink fluids and eat well.

The NHS in the UK also advises avoiding alcohol consumption to reduce the strain on the liver, and to practise good hygiene such as washing hands with soap and water regularly.

According to Canadian health authorities, the best way to prevent it is by getting vaccinated. The risk can also be reduced by washing your hands, having safe food and sex practices, and precautions with food and water.

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2022-05-31 09:36:03Z
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Canadian merchants may see rebates after fee settlement with Visa, MasterCard deal - CBC News

Businesses in Canada may be eligible to claim credit card processing fee rebates following a multimillion-dollar class action settlement with Visa and MasterCard.

Merchants can now apply for rebates on so-called swipe fees charged on credit card transactions dating back two decades, the Canadian Federation of Independent Business (CFIB) said Monday.

The settlement for the class action, launched in 2011, comes after the pandemic quickened a shift towards digital payments as more consumers shopped online.

"During COVID, cash disappeared and everyone started paying with plastic," said Corinne Pohlmann, senior vice-president of national affairs and partnerships at CFIB.

"Credit cards became much more prevalent so the amount of fees merchants are paying has also increased."

Fee charged every time card is used

Credit cards charge merchants so-called interchange rates on purchases, a fee shared between credit card companies, payment processors and banks.

Those fees can range from as low as around one per cent for basic cards to nearly three per cent for cards that offer rewards such as cash back or loyalty points.

"The more perks on a card, the more expensive it is for a merchant to accept," Pohlmann said. "I don't think consumers understand how big a cost it could be for a merchant."

While the settlement doesn't change the fees, it does allow businesses to apply for a rebate of some of the fees paid since 2021.

Any Canadian merchant that accepted MasterCard and Visa credit cards between 2001 and 2021 and incurred merchant discount fees is eligible for a rebate, ranging from $30 a year or up to $600 total for small merchants, to $250 a year or $5,000 for larger merchants.

Customers can soon be charged fees directly

The settlement also gives merchants the power to pass credit card fees on to customers, starting this fall.

While very few merchants are expected to add surcharges for accepting credit cards, Pohlmann said giving businesses the ability to recoup those fees will help them push back against future fee hikes.

Meanwhile, the federal government has repeatedly pledged to lower credit card processing fees for small businesses.

"They've promised to reduce fees for small- and medium-sized businesses to rates that are similar to what ... big businesses enjoy," said Gary Sands, senior vice-president of public policy and advocacy with the Canadian Federation of Independent Grocers.

"But there's been a deafening silence from Ottawa."

Sands said the amount being reimbursed by Visa and MasterCard represents a tiny fraction of fees paid. He also expressed concern that the settlement could be used by credit card companies as "camouflage in their battle to resist lowering their credit card fees."

"The surcharge isn't a solution," he said. "What business is going to deliberately put themselves at a competitive disadvantage by passing those fees on to customers?"

When approached for comment by CBC News, MasterCard Canada and Visa Canada did not immediately respond.

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2022-05-30 22:34:20Z
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Bank of Canada all but certain to raise lending rates this week — with more hikes to come - CBC News

The Bank of Canada is expected to raise its benchmark interest rate by half a percentage point on Wednesday, a move designed to rein in inflation, running at its highest level in decades.

There's a virtually unanimous view among economists that the bank will move its benchmark lending rate to 1.5 per cent on Wednesday, the second such hike in a row and a crystal clear signal that the pandemic-induced era of cheap money has come to an end.

While that's bad news for anyone who owes money or wants to borrow some, it's not hard to see why the bank feels compelled to act.

The price of everything from food to gasoline and housing has exploded during the pandemic, as supply and demand imbalances brought about because of COVID-19 have coupled with record-setting amounts of stimulus cash to fuel inflation.

Officially, Canada's inflation rate sits at 6.8 per cent, its highest level in 30 years. Costs for basic necessities, like putting food on the table and keeping a roof over one's head, have gone up by even more, with food and shelter rising 9.7 and 7.4 per cent, respectively, in the past year.

The current inflation rate for necessities is two to three times higher than what the bank likes to see. While low interest rates aren't the only factor driving up inflation, the central bank is feeling the pressure to move swiftly to cool things down.

Nathan Janzen, an economist with RBC, thinks Canada's central bank is on track for a series of larger-than-normal hikes in a row, until its rate gets to roughly three per cent. Canada's benchmark interest rate hasn't hit that level since the 2008 financial crisis. 

"The looming question is whether rates need to rise above that neutral range to get inflation back under control," Janzen said.

Housing market impact

It's hard to overstate the impact that interest rates more than twice as high as they were before the pandemic would have on the broader economy. The most obvious impact would be in the housing market.

After increasing at a torrid pace for most of the pandemic, Canadian house prices have started to cool down ever since the central bank made its first tiny rate hike in March. Sales are down sharply just about everywhere, and selling prices have inched lower too, down from an all-time high average of $816,000 in February to $746,000 in April. 

May's numbers are expected to show that downward pace quickening, and that's before the impact of this week's expected hike is factored in.

WATCH | Here's what a central bank rate hike could do to the housing market:

How the Bank of Canada rate hike could impact house prices

2 months ago

Duration 5:58

Personal finance expert and Credit Canada CEO Bruce Sellery answers questions about the latest Bank of Canada interest rate hike and what it could mean for house prices.

Sung Lee, a mortgage broker with rate comparison website Rates.ca, said some buyers are already getting cold feet. And many of those who are still willing to jump in are finding themselves able to afford less than they anticipated.

"We've seen a slight dip in mortgage inquiries after the Bank of Canada first raised rates, which seems to be in line with the recent slowdown in the real estate market," Lee said in a recent commentary.

Anyone wishing to get a mortgage to buy a home must have their finances stress tested in order to discern if they can handle higher rates. And even the relatively small rate hikes that have happened so far have many would-be buyers failing to meet the new, higher bar. They are then compelled to buy something more affordable — or hold off entirely.

Currently, most borrowers have their finances tested as if mortgage rates were 5.25 per cent; that's quite a bit higher than the level many Canadians would get from a lender right now.

But as those real lending rates inch higher, the bar for the stress test gets raised too. This causes some prospective buyers "to either hold off on purchasing or turn to alternative methods to raise the amount of mortgage they can afford, such as credit unions or private lenders," Lee said. 

Analyst urges 'aggressive' rate hikes

Canada is far from the only central bank trying to battle inflation with higher lending rates, but strategists at Dutch bank ING say the Bank of Canada has a harder job than some because its economy is so heavily impacted by what its neighbour to the south does.

"To generate the same degree of monetary tightening, the Bank of Canada tends to need to be more aggressive on policy rate increases," James Knightley and Francesco Pesole wrote in a commentary last week.

"We would argue that you cannot dismiss the possibility of a 75-point hike given the current macro environment."

A hike of that size would take lending rates to where they were before the pandemic started — when the central bankers around the world were cautiously trying to get interest rates back up to something approaching normal.

More than two years into a pandemic, what "normal" means now is anyone's guess, but bank watchers agree that the old rules will likely no longer apply.

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2022-05-30 08:00:00Z
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Asia-Pacific stocks rise ahead of major economic data this week - CNBC

SINGAPORE — Shares in Asia-Pacific rose in Monday morning trade as investors look ahead to major economic data releases later in the week.

In Japan, the Nikkei 225 rose 1.21% in early trade as shares of robot maker Fanuc jumped more than 2%. The Topix index traded 1.01% higher.

The Kospi in South Korea also climbed 1.07%, while Australia's S&P/ASX 200 edged 0.31% higher.

MSCI's broadest index of Asia-Pacific stocks outside Japan traded 0.28% higher.

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Several major data releases are expected later in the week. China is set to announce its official manufacturing Purchasing Managers' Index for May on Tuesday, with investors looking for clues on the economic impact of Covid-related lockdowns on the mainland.

U.S. jobs data is expected Friday. Markets in the U.S. are closed on Monday for a holiday.

Currencies

The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 101.708 following a recent drop from levels above 102.

The Japanese yen traded at 127.27 per dollar, stronger as compared with levels above 127.8 seen against the greenback last week. The Australian dollar was at $0.7158 after a climb last week from below $0.71.

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2022-05-29 23:39:47Z
CAIiEEZKgmLjyPSVzZKDumopHoEqGQgEKhAIACoHCAow2Nb3CjDivdcCMLvrngY

Air travellers face cancellations over Memorial Day weekend - The Globe and Mail

Travelers queue up move through the north security checkpoint in the main terminal of Denver International Airport, Thursday, May 26, 2022, in Denver.David Zalubowski/The Associated Press

Airline travellers are not only facing sticker shock this Memorial Day weekend, the kickoff to the summer travel season. They’re also dealing with a pileup of flight cancellations.

More than 1,500 flights were cancelled as of 9:50 p.m. EDT Saturday, according to flight tracking website FlightAware. That followed more than 2,300 cancellations on Friday.

Delta Air Lines suffered the most among U.S. airlines, with more than 250 flights, or 9 per cent of its operations, eliminated on Saturday. Hartsfield-Jackson International Airport in Atlanta, where Delta is based and has its largest hub, experienced heavy travel delays. On Saturday, 5 per cent of the flights there were cancelled, while 16 per cent were delayed.

Delta noted in an e-mail to The Associated Press that Saturday’s cancellations were due to bad weather and “air traffic control actions,” noting it’s trying to cancel flights at least 24 hours in advance this Memorial Day weekend.

Delta announced on its website on Thursday that from July 1 to Aug. 7, it would reduce service by about 100 daily departures, primarily in parts of the U.S. and Latin America that Delta frequently serves.

“More than any time in our history, the various factors currently impacting our operation – weather and air traffic control, vendor staffing, increased COVID-19 case rates contributing to higher-than-planned unscheduled absences in some work groups – are resulting in an operation that isn’t consistently up to the standards Delta has set for the industry in recent years,” said Delta’s Chief Customer Experience Officer Allison Ausband in a post.

Airlines and tourist destinations are anticipating monster crowds this summer as travel restrictions ease and pandemic fatigue overcomes lingering fear of contracting COVID-19 during travel.

Many forecasters believe the number of travellers will match or even surpass levels in the good-old, pre-pandemic days. However, airlines have thousands fewer employees than they did in 2019, and that has at times contributed to widespread flight cancellations.

People who are only now booking travel for the summer are experiencing the sticker shock.

Domestic airline fares for summer are averaging more than $400 for a round trip, 24 per cent higher than this time in 2019, before the pandemic, and a robust 45 per cent higher than a year ago, according to travel-data firm Hopper.

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2022-05-29 02:15:22Z
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Elon Musk Attempts To Lower $44B Twitter Price Tag, Shareholders Sue Him In Response - HotNewHipHop

Just when we thought that Elon Musk would have bragging rights as the proud new owner of Twitter, the tables have completely turned, and now the South African is being sued by the website's shareholders, according to Deadline.

A class-action lawsuit has reportedly been filed against Musk, which accuses him of "unjust enrichment, false statements, and stock manipulation in an attempt to reduce or not pay the $44 billion" which they had previously settled on.

Scott Olson/Getty Images

While getting the funds together, the Tesla Motors CEO secured a bank loan after promising billions of dollars in Tesla stock, but in the month after his acquisition was announced the company's stock took a dive.

The lawsuit alleges that, at the same time, Musk began "[making] false statements and [engaging] in market manipulation of Twitter stock, publicly declaring that the agreement had been put "on hold." 

Elsewhere, it's noted that the engineer failed to reveal his 9.2 percent stake in Twitter when obligated to do so, prompting an SEC investigation. "Musk first agreed to join the Twitter board as an ally, then reversed that decision in favour of a takeover bid and threatened to go hostile if Twitter wouldn’t accept," Deadline's report claims.

Shareholders have yet to authorize Musk's purchase – this will take place at a special meeting that hasn't been set.

As he navigates the dire straits he's gotten himself into with Twitter, the 50-year-old has been making more positive headlines thanks to The Kid Laroi, who revealed some financial advice he got from Mr. Musk at a Saturday Night Live afterparty – read more about that here, and let us know if you think that Elon will still make his big purchase in the comment section below. 

[Via] [Via]

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2022-05-28 18:17:00Z
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Elon Musk’s Twitter stock purchase catches the SEC’s attention - Teslarati

By Joey Klender

Posted on May 28, 2022

Tesla CEO Elon Musk’s Twitter stock purchase has caught the attention of the Securities and Exchange Commission. The agency sent Musk a letter in April, which has now been released.

The letter asks Musk why he did not file the required paperwork, which would disclose he has accumulated a 5 percent stake in the social media network, in the required 10-day period. Additionally, the agency is requesting information on his statements regarding Twitter’s ability to adhere to free speech, which Musk has challenged and cited as his primary reason for acquiring the platform.

“Dear Mr. Musk,” the letter begins. “We have reviewed the above-captioned filing and have the following comments. Our comments ask for additional information so that we may better understand your disclosure. Please respond to this letter by providing the requested information. If you do not believe our comments apply to your facts and circumstances, please advise us why in your response. After reviewing any information provided in response to these comments, we may have additional comments.”

The letter then outlines four basic questions regarding Musk’s acquisition of Twitter shares. “Please advise us why the Schedule 13G does not appear to have been made within the required 10 days from the date of acquisition as required by Rule 13d-1(c), the rule upon which you represented that you relied to make the submission,” one of the questions asks. 13G forms are meant for investors who plan to hold their shares passively, the New York Post reported. 13D forms are for activist investors, which, based on Musk’s comments and plans for Twitter, would be the more appropriate form.

RELATED:

Elon Musk eliminates margin loan from Twitter deal funding, Tesla stock responds

The fourth question dives into this a little deeper, as it states, “Please provide us with a brief analysis of the bases upon which you determined that you were eligible to rely upon Rule 13d-1(c) to make the filing on Schedule 13G. Your response should address, among other things, your recent public statements on the Twitter platform regarding Twitter (the issuer), including statements questioning whether Twitter (the issuer) ‘rigorously adheres to’ ‘free speech principles.’”

It is just another page in the long story of Musk vs. the SEC. The Tesla frontman and the agency have sparred back and forth for several years, starting when Musk hinted he may take Tesla private at $420 per share in 2018. “Funding secured,” Musk famously said. That Tweet is still the subject of a major lawsuit between Musk and Tesla shareholders and is set to hit a federal courtroom in January 2023.

I’d love to hear from you! If you have any comments, concerns, or questions, please email me at [email protected]. You can also reach me on Twitter @KlenderJoey, or if you have news tips, you can email us at [email protected]

Elon Musk’s Twitter stock purchase catches the SEC’s attention

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2022-05-28 15:29:33Z
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Canada's big banks grapple with rising expenses as inflation climbs - The Globe and Mail

Bank towers are shown from Bay Street in Toronto's financial district, on Wednesday, June 16, 2010.Adrien Veczan/The Canadian Press

Canada’s big banks are battling to keep a lid on rising costs that could eat into profits as they face pressure to keep growing revenue in the midst of mounting economic unease over the impact of inflation and rising interest rates.

On Friday, National Bank of Canada wrapped up a solid second-quarter earnings season for the country’s major banks with an 11-per-cent increase in profit, year over year. The Montreal-based bank’s revenue was up 9 per cent for the quarter ended April 30, with higher loan balances and fees as consumers and businesses spend and borrow more.

But the bank’s expenses were up 8 per cent as it hired staff, increased salaries and invested in technology.

Surging expenses leave banks with little margin for error if revenue growth slows. Though banks have churned out higher profits through most of the COVID-19 pandemic, and fared better than many companies in other sectors, they are not immune to the high inflation driving up prices.

Expenses spiked by 13 per cent at Canadian Imperial Bank of Commerce in the quarter, compared with a year earlier, and by 5 per cent at Toronto-Dominion Bank, which included a 9-per-cent increase in costs in its Canadian retail banking unit.

Salaries are a major force pushing up expenses, as tight labour markets that have kept many consumers financially stable also create intense competition for talent. Investments by banks in technology to improve customer experiences and automate routine tasks, as well as resurgent travel and marketing spending as economies reopen, have also made it harder to restrain spending.

The impact from inflation “is fairly broad,” Hratch Panossian, CIBC’s chief financial officer, said in an interview. “You’re seeing impacts across various categories across the bank,” and the recent pressure that has put on the bank’s costs has “been a little bit higher than what we expected.”

The fight to retain employees is adding hundreds of millions of dollars to banks’ expenses, and the pressure is felt everywhere, from executive and technology roles to staff in branches, call centres and back offices.

In mid-April, TD announced it will give most of its non-executive employees a 3-per-cent pay raise in July, and RBC soon followed suit, boosting base pay for low-salaried staff. Last week, Bank of Montreal matched those raises, promising a 3-per-cent pay increase for certain salary tiers, according to CFO Tayfun Tuzun.

For TD, the base salary increases will cost an extra $290-million a year, CFO Kelvin Tran said Thursday.

“Salaries and benefits will go up, inflation is high. There are certain expenses that will go up naturally because of what’s happening around us,” said Raj Viswanathan, CFO of Bank of Nova Scotia, which reported a 3-per-cent rise in second-quarter costs. He predicted those costs will increase more rapidly in the coming quarters, “but we have a number of levers that we use in this bank” to control them.

Mr. Panossian said CIBC has “paced” some of its planned investments, “so we’ve already been reacting and we have the ability to react through the rest of the year.”

For now, loan balances are increasing at healthy rates even as demand for mortgages is expected to cool, credit-card spending is picking up, commercial lending is strong and central bank interest-rate increases are boosting profit margins on loans. “That is a good combination to be able to absorb this,” Ebrahim Poonawala, an analyst at Bank of America Securities Inc., said in an interview.

But if the economy falls into a downturn, as economists increasingly fear it could, “I don’t think … these banks have a lot of levers to pull in terms of absolute cost cuts,” Mr. Poonawala said.

“These are like giant ships. … None of this happens overnight,” he said. “When you’re doing these across-the-board [salary] increases, there is very little room to flex lower on expenses.”

On a call with analysts on Friday, National Bank CFO Marie Chantal Gingras said cost increases are “tied to our business growth.” But she said the bank is looking for areas to cut back as it has raised salaries to keep pace in “a highly competitive environment” and has boosted spending in an array of areas that include automation, cybersecurity and regulatory compliance.

“The team constantly works on identifying and realizing efficiencies in our expense base, especially in an inflationary context,” she said.

National Bank earned $893-million, or $2.55 a share, in the second quarter. That compared to $801-million, or $2.25 a share, in the same period last year. On average, analysts were expecting earnings of $2.27 a share, according to Refinitiv.

The bank raised its quarterly dividend by 5 cents, or 6 per cent, to 92 cents a share.

Profits rose across the banking sector in the fiscal second quarter, with four of six major banks beating analysts’ expectations by comfortable margins.

Royal Bank of Canada had the most success at containing costs in the quarter, reporting an increase of just 1 per cent, year over year. Yet the bank’s salaries rose 7 per cent from a year earlier, “representing nearly 40 per cent of the increase in our more controllable costs,” CFO Nadine Ahn said. Higher professional fees and technology costs accounted for another 30 per cent of increases, and marketing and travel for 20 per cent, she said.

One reason RBC was able to rein in second-quarter costs was the weaker performance of its capital markets division, where revenue fell 14 per cent from high levels last year. That provides a “natural, built-in hedge” because it means the bank is doling out less bonus pay to traders and investment bankers, chief executive officer Dave McKay said.

For the past two years, soaring capital markets revenues were “a big boon for positive operating leverage,” which is the industry term for revenue outpacing expenses, Mr. Poonawala said. But as frenzied activity in trading, IPOs and equity issuances has fallen off this year – with quarterly profit from capital markets falling 26 per cent at RBC and 20 per cent at BMO, for example – “you see that pain,” he said.

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2022-05-27 23:07:02Z
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Twitter shareholders sue Elon Musk, alleging his antics have deflated stock price - CBC News

Twitter shareholders have filed a lawsuit accusing Elon Musk of engaging in "unlawful conduct" aimed at sowing doubt about his bid to buy the social media company.

The lawsuit filed late Wednesday in the U.S. District Court for the Northern District of California claims the billionaire Tesla CEO has sought to drive down Twitter's stock price because he wants to walk away from the deal or negotiate a substantially lower purchase price.

San Francisco-based Twitter is also named as a defendant in the lawsuit, which seeks class action status as well as compensation for damages.

A representative for Musk did not immediately respond to a message for comment on Thursday. Twitter declined to comment.

'Take it or leave it' offer

Musk last month offered to buy Twitter for $44 billion US, but later said the deal can't go forward until the company provides information about how many accounts on the platform are spam or bots.

The lawsuit notes, however, that Musk waived due diligence for his "take it or leave it" offer to buy Twitter. That means he waived his right to look at the company's non-public finances.

WATCH | Twitter deal 'temporarily on hold,' Musk says:

Elon Musk says $44B Twitter deal 'temporarily on hold'

14 days ago

Duration 4:09

Elon Musk says his planned $44 billion US purchase of Twitter is 'temporarily on hold' pending details on spam and fake accounts on the social media platform, but he is 'still committed to acquisition.'

In addition, the problem of bots and fake accounts on Twitter is nothing new. The company paid $809.5 million last year to settle claims it was overstating its growth rate and monthly user figures. Twitter has also disclosed its bot estimates to the Securities and Exchange Commission for years, while also cautioning that its estimate might be too low.

To fund some of the acquisition, Musk has been selling Tesla stock and shares in the electric carmaker have lost nearly a third of their value since the deal was announced on April 25.

In response to the plunging value of Tesla's shares, the Twitter shareholders' lawsuit claims Musk has been denigrating Twitter, violating both the non-disparagement and non-disclosure clauses of his contract with the company.

"In doing so, Musk hoped to drive down Twitter's stock price and then use that as a pretext to attempt to re-negotiate the buyout," according to the lawsuit.

Twitter's shares closed Thursday at $39.54, 27 per cent below Musk's $54.20 offer price.

High profile saga

Before announcing his bid to buy Twitter, Musk disclosed in early April that he had bought a nine per cent stake in the company. But the lawsuit says Musk did not disclose the stake within the timeframe required by the Securities and Exchange Commission.

And the lawsuit says his eventual disclosure of the stake to the SEC was "false and misleading" because he used a form meant for "passive investors" — which Musk at the time was not, because he had been offered a position on Twitter's board and was interested in buying the company.

Musk benefited by more than $156 million US from his failure to disclose his increased stake on time, since Twitter's stock price could have been higher had investors known Musk was increasing his holdings, the lawsuit claims.

"By delaying his disclosure of his stake in Twitter, Musk engaged in market manipulation and bought Twitter stock at an artificially low price," the lawsuit says.

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2022-05-27 14:48:33Z
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TD Bank's second-quarter profit tops estimates, boosted by real estate lending and better loan margins - The Globe and Mail

Toronto-Dominion Bank’s second quarter profit beat analyst estimates thanks to growth in Canadian personal and commercial banking, improving loan margins and lower loan losses — all of which are common themes across the Big Six banks this earnings season.

TD TD-T reported net income of $3.8-billion, or $2.07 per share, up three per cent from the year prior. However, the bank’s total profit included a one-time boost of $224-million stemming from a lawsuit settlement. After adjusting for one-time items, TD’s earnings amounted to $2.02 per share, down slightly from the year prior, but beating analyst estimates of $1.93 per share.

Like many of its Big Six rivals, TD delivered strong revenues in its Canadian personal and commercial banking arm, with loan growth rising nine per cent from the year prior, driven by residential real estate and commercial lending.

TD’s residential real estate lending business in Canada grew by nine per cent relative to the year prior, while its commercial lending division grew by 16 per cent. Net interest margins, or the spread between the rates at which TD borrows money and then lends it out to clients, also grew, allowing the bank to make more money per loan.

However, TD’s expenses in this division also grew nine per cent which offset some of these gains, as the bank spends to upgrade its technology and increases employee pay.

In the U.S., TD’s retail segment also reported profit growth, albeit at a slower rate than in Canada. The U.S. division includes TD’s stake in Charles Schwab Corp., and the investment hurt the division’s earnings this quarter because profit from it fell nine per cent from the year prior.

The second quarter of 2021 was an unusually busy period for discount brokerages because retail traders were piling into the stock market. Many of these traders have since retreated now that the market is correcting, which lowers trading revenues.

Better earnings from TD’s traditional banking divisions helped to offset weaker profits from wholesale banking.

Heading into earnings season, capital markets profits across the Canadian banks were expected to fall because of a steep drop in dealmaking in recent months. The rocky stock market has made it tough for companies to raise money because investors are timid to support financings, and merger and acquisition activity has slowed significantly because it is difficult to know how to appropriately value a potential acquisition.

TD, however, is partially insulated from this slowdown because its capital markets division typically delivers a slower portion of its total profit relative to some major rivals. TD was also able to partially offset lower advisory fees with strong trading revenues. TD’s wholesale banking profit dropped six per cent from the year prior.

TD’s one-time $224-million gain, reported as part of its U.S. retail profit, is a recovery of losses tied to an alleged Ponzi scheme at Commerce Bank, which TD acquired in 2008. TD previously paid hundreds of millions of dollars to settle lawsuits, and it was seeking partial repayment stemming from insurance policies it had taken out.

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2022-05-26 14:01:00Z
1445302499

​TD holds off on dividend hike; Beats Q2 profit estimates - BNN

The Toronto-Dominion Bank beat profit expectations in its latest quarter despite muted performances across its major divisions. It also became the only major bank thus far this earnings season to not raise its quarterly dividend.

TD said its net income in the fiscal second quarter, which ended April 30, rose three per cent year-over-year to $3.81 billion. On an adjusted basis, its profit fell to $2.02 per share from $2.04 a year earlier. Analysts, on average, expected $1.93 in adjusted earnings per share. Overall credit quality improved sequentially, as TD set aside $27 million for loans that could go bad, compared to $72 million in the prior quarter.

Revenue and expenses in TD's Canadian retail banking unit both rose nine per cent year-over-year, while profit inched up two per cent to $2.24 billion. Lending activity ramped up in the quarter, with the total personal loan book hitting an average of $402.7 billion, compared to $373.3 billion a year earlier, while business loans jumped 16 per cent to almost $101 billion.

A number of one-time items affected profit in TD's U.S. retail banking unit. On an adjusted basis, net income in that business fell 10 per cent year-over-year to $769 million. TD said the downturn was caused in part by a much more moderate release of funds from loan loss provisions (US$15 million, compared to US$173 million a year earlier).

TD is awaiting final regulatory approvals to proceed with its US$13.4-billion takeover of Memphis, Tenn.-based First Horizon Corp. That transaction was announced in February; at the time, TD said the deal would make it a top-six bank in the United States thanks to the addition of First Horizon's 412 branches and more than 1 million customers. It also said it hoped to close the deal in the first quarter of fiscal 2023, which is a period that ends Jan. 31, 2023.

Meanwhile, similar to many of its peers that reported earlier this week, TD's wholesale banking unit (which includes capital markets activity) suffered profit erosion as net income fell six per cent year-over-year to $359 million.

"As we continue to emerge from the COVID-19 pandemic we face new economic uncertainties and growing geopolitical tensions. TD has proven its ability to adapt to changing circumstances and deliver performance and progress," said Bharat Masrani, TD's president and chief executive officer, in a release.

TD most recently announced a dividend hike (to $0.89 per share) in December; before that, the last hike was announced in February 2020. Shortly thereafter, Canada’s banks were told by their regulator (the Office of the Superintendent of Financial Institutions) to hold off on dividend hikes and share buybacks due to the pandemic. That guidance was lifted in November.  

Prior to OSFI’s intervention, TD regularly raised its dividend on an annual basis. However, Masrani has indicated dividend hikes aren’t on a pre-set schedule.

“It's not a bad assumption that we like to look at this on an annual basis, and then hopefully we get into that cycle. But it doesn't mean that we will not periodically look at it on a different cycle based on circumstance and the environment we might be in,” he said during a conference call with analysts on Dec. 2.

“Generally, our cycle has been annual and that has worked out reasonably well for us, but it will depend on the environment going forward.”

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2022-05-26 11:10:06Z
1445302499

​Scotia hikes dividend, smashes Q2 profit estimates - BNN

Bank of Nova Scotia opened earnings season for Canada's Big Six on Wednesday with a beat and a dividend hike as profit climbed in all its major divisions other than capital markets.

Scotia said its net income in the fiscal second quarter, which ended April 30, rose to $2.75 billion from $2.46 billion a year earlier. On an adjusted basis, Scotia earned $2.18 per share; the average estimate among analysts tracked by Bloomberg was for $1.97 in adjusted per-share earnings.

The bank also announced its quarterly dividend will rise to $1.03 per share from $1.00, effective July 27.

"Continued loan growth of 13 per cent, an improving net interest margin, strong customer balance sheets, combined with prudent expense management, positions the Bank well to grow its earnings," said Brian Porter, Scotia's president and chief executive officer, in a release.

Profit in Scotia's core Canadian banking division soared 27 per cent year-over-year to $1.18 billion in the latest quarter. Credit quality was a swing factor compared to a year earlier, as Scotia released $12 million from the unit's provisions for loan losses in the most recent quarter; a year earlier, it booked $145 million in new provisions for loans that could go bad.

Scotia said it had an average of $271.8 billion in residential mortgages on its Canadian loan book during the fiscal second quarter, up almost three per cent from the prior quarter.

Growth in Scotia's international division was even more pronounced, as net income surged 44 per cent year-over-year to $605 million as provisions for loan losses fell and revenue climbed.

Scotia's Global Banking and Markets division was a profit drag, as net income slumped six per cent year-over-year to $488 million, which the bank attributed to higher non-interest expenses and lower non-interest income.

In a report to clients after the results were released, Barclays Analyst John Aiken said he doesn’t think Scotia will be an outlier with the profit slump in its capital markets business.

However, Aiken did flag that the drop in Scotia’s Common Equity Tier 1 capital ratio to 11.6 per cent from 12.0 per cent in the previous quarter might not sit well with investors.

“The only real knock on the results will likely be Scotia’s lower-than-peer regulatory ratio, which was drawn down again from share repurchases. While we believe that [Scotia] is heading towards a much more efficient capital level, the market does not like outliers, particularly where capital and an uncertain outlook is concerned.”

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2022-05-25 10:23:06Z
1445302499

Social media stocks sink to erase US$165B on snap warning - BNN

Social media stocks lost more than US$160 billion in market value Tuesday after Snap Inc.’s profit warning, adding to woes for a sector that is already reeling from stalling user growth and rate-hike fears. 

Shares in digital ad-dependent Snap tumbled as much as 41 per cent, their biggest intraday decline ever to trade below its 2017 initial public offering price of US$17. The selloff erased about US$15 billion in market value. Added to the value of declines for peers including Facebook-owner Meta Platforms Inc., Google-owner Alphabet Inc., Twitter Inc. and Pinterest Inc., the group saw as much as US$201.8 billion wiped out at their session lows, before paring some losses. 

The news spurred widespread selling across the advertising and ad-tech space. Among notable decliners, Trade Desk Inc. sank 20 per cent, fuboTV Inc. lost eight per cent, Magnite Inc. lost 14 per cent, LiveRamp Holdings Inc. slid nine per cent, Roku Inc. dropped 17 per cent, and Vizio Holding Corp. was down 8.1 per cent. In addition, Omnicom Group Inc. fell 6.4 per cent and Interpublic Group of Cos lost 4.9 per cent.

“At this point, our sense is this is more macro and industry-driven versus Snap specific,” Piper Sandler analyst Tom Champion wrote in a note. 

Others on Wall Street agreed, with Citi analyst Ronald Josey saying “a slowing macro is likely impacting advertising results across the broader Internet sector, although we believe platforms more exposed to brand advertising—like Twitter, Google’s YouTube, and Pinterest—are likely experiencing a greater impact overall.”

The owner of the Snapchat app, which sends disappearing messages and adds special effects to videos, reported quarterly user growth in April that topped estimates. But with the company saying just a month later that it won’t meet prior forecasts for revenue and profit, analysts noted a rapid deterioration of the economic environment.

Snap and platforms like Facebook and Google are competing for advertising dollars at a challenging time. Spiraling inflation is putting pressure on companies and consumer spending, while recent privacy changes, such as Apple Inc.’s tracking restrictions, have slowed businesses that were booming during much of the pandemic.

User growth is another a big focus for social media firms as they vie to attract new customers to target ads in an already saturated market. In February, Facebook-parent Meta posted the biggest one-day wipeout in market value for any U.S. company ever after saying that user additions stalled.

And broader concerns for the tech sector have also been hitting social media stocks, with the Federal Reserve’s path of rate hikes particularly weighing on technology stocks that are valued on future growth expectations.

Nasdaq 100 Index declined more than 3.2 per cent on Tuesday, set to reverse Monday’s advance for the gauge. The tech-heavy index is down 29 per cent this year, wiping out several hundred billions in value from the likes of Apple to other so-called growth peers like Netflix Inc.

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2022-05-24 16:05:36Z
1442809684

Social media stocks set to erase US$100B on snap warning - BNN

Social media stocks lost about US$165 billion in market value Tuesday after Snap Inc.’s profit warning, adding to woes for a sector that is already reeling from stalling user growth and rate-hike fears.

Shares in digital ad-dependent Snap tumbled as much as 40 per cent, their biggest intraday decline ever, erasing about US$15 billion in market value. Added to the value of declines for peers including Facebook-owner Meta Platforms Inc., Google-owner Alphabet Inc., Twitter Inc. and Pinterest Inc., the group has seen US$165.6 billion billion wiped out. 

Snap was trading at US$13.60 as of 9:50 a.m. in New York, below its 2017 initial public offering price of US$17. 

“At this point, our sense is this is more macro and industry-driven versus Snap specific,” Piper Sandler analyst Tom Champion wrote in a note. 

Others on Wall Street agreed, with Citi analyst Ronald Josey saying “a slowing macro is likely impacting advertising results across the broader Internet sector, although we believe platforms more exposed to brand advertising—like Twitter, Google’s YouTube, and Pinterest—are likely experiencing a greater impact overall.”

The owner of the Snapchat app, which sends disappearing messages and adds special effects to videos, reported quarterly user growth in April that topped estimates. But with the company saying just a month later that it won’t meet prior forecasts for revenue and profit, analysts noted a rapid deterioration of the economic environment.

The news spurred widespread selling across the advertising and ad-tech space. Among notable decliners, Trade Desk Inc. sank 18 per cent, fuboTV Inc. lost 7.7 per cent, Magnite Inc. lost 10 per cent, LiveRamp Holdings Inc. slid 7.4 per cent, Roku Inc. dropped 13 per cent, and Vizio Holding Corp. was down 5.5 per cent. In addition, Omnicom Group Inc. fell 6.4 per cent and Interpublic Group of Cos lost 4.9 per cent.

Snap and platforms like Facebook and Google are competing for advertising dollars at a challenging time. Spiraling inflation is putting pressure on companies and consumer spending, while recent privacy changes, such as Apple Inc.’s tracking restrictions, have slowed businesses that were booming during much of the pandemic.

User growth is another a big focus for social media firms as they vie to attract new customers to target ads in an already saturated market. In February, Facebook-parent Meta posted the biggest one-day wipeout in market value for any U.S. company ever after saying that user additions stalled.

And broader concerns for the tech sector have also been hitting social media stocks, with the Federal Reserve’s path of rate hikes particularly weighing on technology stocks that are valued on future growth expectations.

Nasdaq 100 Index declined more than 2.7 per cent on Tuesday, set to reverse Monday’s advance for the gauge. The tech-heavy index is down 28 per cent this year, wiping out several hundred billions in value from the likes of Apple to other so-called growth peers like Netflix Inc.

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2022-05-24 08:42:37Z
1442809684

Snap wars on Q2 guidance - CNBC Television

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2022-05-24 01:20:15Z
1442809684

BlackburnNews.com - Some Jif Peanut Butter products recalled - BlackburnNews.com

Some Jif Peanut Butter products recalled

JIF Creamy Peanut Butter 500g (Image courtesy of the Canadian Food Inspection Agency)

By Tamara Thornton May 22, 2022 9:14pm

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The Canadian division of Smucker Foods has issued a recall of certain Jif Peanut Butter products due to possible Salmonella contamination.

The recalled products have codes that range from 1274 425 to 2140 425 and include:

• Squeeze Creamy Peanut Butter 375 g, UPC: 0 51500 24556 9

• Creamy Peanut Butter 200 Cups, UPC: 0 51500 40200 9

• TO GO Creamy Peanut Butter 8 Individual Cups 250 g, UPC: 0 51500 75007 0

• Dark Roast Creamy Peanut Butter 500 g, UPC: 0 51500 45163 2

• Dark Roast Creamy Peanut Butter 1 kg, UPC: 0 51500 45736 8

• Light Creamy Peanut Butter 500 g, UPC: 0 51500 70037 2

• Light Creamy Peanut Butter 1 kg, UPC: 0 51500 70038 9

• Creamy Peanut Butter 500 g, UPC: 0 51500 75002 5

• Creamy Peanut Butter 1 kg, UPC: 0 51500 75005 6

• Crunchy Peanut Butter 500 g, UPC: 0 51500 75004 9

• Crunchy Peanut Butter 1 kg, UPC: 0 51500 75006 3

Food contaminated with Salmonella can cause symptoms like fever, headache, vomiting, nausea, abdominal cramps, and diarrhea. For people with weakened immune systems, Salmonella can even cause deadly infections.

Currently, no illnesses have been reported due to the products in Canada.

The Canadian Food Inspection Agency (CFIA) is investigating the contamination, which may lead to the recall of other products.

CFIA said that the recalled products have been sold nationally and online.

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2022-05-23 01:14:00Z
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