Canada's economy loses momentum as rate hikes take hold - The Globe and Mail

Shoppers at the Toronto Eaton Centre are seen in this file photo. Statistics Canada says GDP grew by 0.1 per cent November. The agency is forecasting flat growth for December.Fred Lum/the Globe and Mail

The Canadian economy is slowing quickly as the Bank of Canada hikes interest rates to tamp down excessive inflation, the prelude to a potential recession this year.

Real gross domestic product rose 0.1 per cent in November, according to figures published Tuesday by Statistics Canada, with a preliminary estimate showing little change in December. All told, the economy grew at an annualized rate of 1.6 per cent in the fourth quarter, based on that estimate, which will be updated near the end of February.

Despite the slowdown, the economy is showing resilience as it faces mounting headwinds. Growth in the final months of 2022 was stronger than what the Bank of Canada and several financial analysts had predicted. Notably, employers continued to hire workers in droves, which kept the unemployment rate near an all-time low.

Separately, the International Monetary Fund delivered a hopeful message on Tuesday, projecting the global economy would grow by 2.9 per cent in 2023, an upward revision from its previous estimate of 2.7 per cent. The IMF said its outlook was “less gloomy” than in October, citing “surprisingly resilient” demand in the U.S. and Europe, along with China’s reopening from strict COVID-19 measures. Global growth should accelerate next year, the IMF said.

In the interim, countries such as Canada are experiencing a loss of momentum. The Canadian economy grew at annualized rates of 3.2 per cent in the second quarter and 2.9 per cent in the third quarter, before its slide to an estimated 1.6 per cent in the final three months of 2022. That trend of slowing growth should continue.

The Bank of Canada expects the economy to stall during the first half of 2023. It has not ruled out a mild recession, an outcome that many analysts on Bay Street are expecting.

“It’s just as likely that we’ll have two or three quarters of slightly negative growth as slightly positive growth,” Bank of Canada Tiff Macklem said at a press conference last week. “So yes, it could be a mild recession. It’s not a major contraction.”

In November, 14 of 20 industrial sectors managed to post growth. Transportation and warehousing rose 1 per cent for the month, boosted by a 4.6-per-cent surge for air transportation. The finance and insurance sector jumped by 0.5 per cent, following three consecutive monthly declines. The public sector expanded by 0.3 per cent.

At the same time, there was contraction in rate-sensitive industries. Construction fell 0.7 per cent in November as residential building and repairs hit a weak spot.

Retailers fared poorly in November as the industry dropped 0.6 per cent. The declines were particularly large at stores selling food, building materials and general merchandise.

Restaurants and bars also had a rough month, posting a 2.9-per-cent contraction.

“While the Canadian economy hasn’t cooled as quickly as we (and others) previously expected given the rapid rise in interest rates, there are growing signs of fragility,” Andrew Grantham, senior economist at CIBC Capital Markets, said in a note to clients.

He added: “The recovery in many services has slowed even with activity still well below pre-pandemic levels, and a dip in restaurant activity could be an early sign of consumers changing their behaviour in the face of inflationary pressures and rising interest rates.”

The Bank of Canada has raised interest rates at the fastest pace in a generation, taking its benchmark rate to 4.5 per cent from a pandemic low of 0.25 per cent in March, 2022. The central bank is intentionally trying to slow the economy and bring supply and demand into better balance to quell soaring rates of consumer price growth.

On that front, there has been recent progress. The annual rate of inflation has slowed to 6.3 per cent in December from a near four-decade high of 8.1 per cent in June. The central bank’s target is 2 per cent.

“Six-per-cent inflation is still way too high. Canadians are still feeling the pain of rapid increases in the cost of living,” Mr. Macklem said last week. “Economic developments have reinforced our confidence [that] inflation is coming down. But it’s going to take us a while to get there and the economy is going to be soft.”

Following last week’s rate hike, the Bank of Canada is tentatively holding its benchmark rate at 4.5 per cent to assess whether its policies are restrictive enough to bring inflation back to target. It can take months, or even longer, for the full effects of higher interest rates to be felt. The bank cautioned that it would raise rates again if needed.

While growth could be sluggish to start the year, the Bank of Canada projects real GDP to expand 1 per cent in 2023. The IMF is projecting Canadian growth of 1.5 per cent, about the same as the United States.

With a report from Reuters

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2023-01-31 15:09:38Z
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What every Canadian investor needs to know today - The Globe and Mail

Equities

Canada’s main stock index edged higher at Tuesday’s opening bell, helped by gains in tech shares. On Wall Street, key indexes were also positive in morning trading ahead of tomorrow’s Federal Reserve interest rate decision.

At 9:31 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was up 33.52 points, or 0.16 per cent, at 20,605.63.

The Dow Jones Industrial Average rose 86.47 points, or 0.26 per cent, at the open to 33,803.56.

The S&P 500 opened higher by 3.08 points, or 0.08 per cent, at 4,020.85, while the Nasdaq Composite gained 4.76 points, or 0.04 per cent, to 11,398.58 at the opening bell.

On Tuesday, U.S. markets got quarterly earnings from McDonald’s, General Motors, Caterpillar and Pfizer. Snap reports after the close.

GM shares jumped more than 9 per cent in early trading in New York after the auto maker posted adjusted earnings per share of US2.12 in the fourth quarter, topping analysts’ forecasts of US$1.69. Quarterly revenue came in at US$43.11-billion, also beating market expectations.

In Canada, Imperial Oil reported this morning while Canadian Pacific Railway posts results after the close of trading.

Calgary-based Imperial Oil reported higher fourth-quarter profit helped by higher prices and tighter supply. Imperial reported net income of $1.7-billion, or $2.86 per share, for the three months ended Dec. 31, up from $813-million or $1.18 per share, a year earlier.

On the economic side, Canadian investors got a reading on November gross domestic product from Statistics Canada before the start of trading. Statscan says the economy grew by 0.1 per cent in the quarter, in line with market forecasts. A preliminary estimate from the agency also suggests real gross domestic product grew by an annualized rate of 1.6 per cent in the fourth quarter, above the Bank of Canada’s forecast of 1.3 per cent.

“This report isn’t likely to cause the BoC to have any second thoughts regarding its recent pause,” TD senior economist James Orlando said. “The economy hasn’t yet absorbed the impact of past rate hikes. Though we are seeing the beginning of this, there is more to come, with GDP and employment growth set to stall in the coming months.”

Elsewhere, The Globe’s Niall McGee reports this morning that Lithium Americas Corp. has landed a US$650-million financing and supply agreement with General Motors that paves the way for the Canadian lithium development company to build the Thacker Pass lithium mine in Nevada. The equity financing is contingent on Vancouver-based Lithium Americas winning legal approval to build the mine.

Overseas, the pan-European STOXX 600 was down 0.68 per cent by midday. Britain’s FTSE 100 slid 0.73 per cent. Germany’s DAX and France’s CAC 40 were off 0.46 per cent and 0.37 per cent, respectively. New figures released Tuesday showed GDP in the euro zone expanded by 0.1 per cent in the fourth quarter. Markets had been expecting a contraction of 0.1 per cent.

In Asia, Japan’s Nikkei closed down 0.39 per cent. Hong Kong’s Hang Seng lost 1.03 per cent.

Commodities

Crude prices were weaker as markets remain cautious ahead of Wednesday’s Fed rate decision and traders weigh oil outflows from Russia.

The day range on Brent was US$85.73 to US$85.25 in the early premarket period. The range on West Texas Intermediate was US$76.63 to US$78.14.

“Oil prices remain soggy despite Asia’s unquenching thirst for all things oil,” Stephen Innes, managing partner with SPI Asset Management, said in a note.

“The problem for the oil bull is that thirst is getting satiated by discount Russian barrels.”

Reuters reports that Russia’s oil loadings from its Ust-Luga port are expected to rise at the beginning of February, despite western sanctions imposed over its invasion of Ukraine.

As well, traders remain wary of the midweek policy announcement from the Federal Reserve and a rate decision Thursday by the European Central Bank. Concerns remain that rising rates will temper economic growth and weigh on global demand.

However, the International Monetary Fund (IMF) has raised its 2023 global growth outlook slightly due to “surprisingly resilient” demand in the United States and Europe, an easing of energy costs and the reopening of China’s economy after Beijing abandoned its strict COVID-19 restrictions, according to Reuters.

Gold prices hit a one-week low as the U.S. dollar firmed ahead of tomorrow’s Fed decision.

Spot gold was down 0.8 per cent at US$1,906.51 per ounce by early Tuesday morning, its lowest level since Jan. 19. Still, gold is up more than 4 per cent on the month and remains headed for its third consecutive monthly increase.

U.S. gold futures were down 0.9 per cent at $1,922.00.

“Gold’s main kryptonite is if the Fed can’t control inflation and they need to tighten much more than markets are expecting,” OANDA’s Ed Moya said.

“Gold could enter the ‘danger zone’ if we get a couple more hotter-than-expected inflation reports and a robust [U.S. non-farm payrolls] report that suggests wage pressures will be here for a while.”

Currencies

The Canadian dollar was down while its U.S. counterpart advanced against a group of currencies but still looked set for its fourth monthly decline in a row.

The day range on the loonie was 74.30 US cents to 74.76 US cents in the early hours. The loonie pared some early losses after the release of the latest GDP report.

“The CAD gains are hard to come by but are easily conceded still, it seems, even if movement is driven mainly by external factors,” Shaun Osborne, chief FX strategist with Scotiabank, said, noting risk aversion and a strong U.S. dollar are both weighing on the loonie this morning.

On world markets, the U.S. dollar index, which weighs the currency against a group of peers, was up 0.31 per cent at 102.56 early Tuesday morning.

However, the index was down nearly 1 per cent for the month. A January decline would mark the fourth straight down month.

Elsewhere, the euro slid in early trading in Europe and was last down 0.41 per cent at US$1.081, according to figures from Reuters.

Britain’s pound was down 0.29 per cent at US$1.231, but was on track for its fourth monthly increase. The yen gained 0.1% at 130.34 per U.S. dollar and was set for its third monthly gain.

In bonds, the yield on the U.S. 10-year note was lower at 3.531 per cent in the predawn period.

More company news

Caterpillar Inc on Tuesday reported a lower-than-expected quarterly profit as increasing manufacturing costs related to materials and freight pressured the heavy machinery maker’s margins. Adjusted profit for the quarter ended December rose to $3.86 share from $2.69 a year earlier. Analysts on average had expected a profit of $4.02 per share, according to Refinitiv IBES data. -Reuters

Exxon Mobil Corp posted $59-billion in adjusted profit for 2022, the company said on Tuesday, taking home more than $6.7-million per hour last year, and setting not only a company record but a historic high for the Western oil industry. Oil majors are expected to break their own annual records on high prices and soaring demand, pushing their combined take to near $200-billion. The scale has renewed criticism of the oil industry and sparked calls for more countries to levy windfall profit taxes on the companies. Exxon’s results far exceeded the then-record $45.2 billion net profit it reported in 2008, when oil hit $142 per barrel, 30% above last year’s average price. Deep cost cuts during the pandemic helped supercharge last year’s earnings. -Reuters

Volkswagen is looking at setting up a battery cell factory in Ontario, the Handelsblatt business daily reported on Tuesday, adding that the province had offered investments and other incentives. Five entries from this month are listed in a lobby register of the province for Volkswagen, including one that mentions Chief Executive Oliver Blume by name, the report said, citing the documents. -Reuters

Pfizer Inc. forecast 2023 sales of its COVID-19 products of $21.5-billion that fell short of Wall Street expectations, hit by lower demand in international markets and slower uptake of booster vaccines. The U.S. drugmaker said it expects sales of $13.5-billion from the vaccine for 2023, below Refinitiv estimates of $14.39-billion, and projected $8-billion in sales of its antiviral pill, Paxlovid, short of $10.33-billion the Street expects. -Reuters

McDonald’s Corp beat Wall Street estimates for quarterly comparable sales on Tuesday, boosted by higher menu prices, increased restaurant traffic and gains in most major markets. The burger chain’s global same-store sales increased 12.6% in the fourth quarter ended Dec. 31, compared with estimates for an 8.6% rise, according to IBES data from Refinitiv. Sales in the UK, Germany and France rose despite fears of a recession in Europe. -Reuters

Economic news

(8:30 a.m. ET) Canada’s monthly real GDP for November.

(8:30 a.m. ET) U.S. employment cost index for Q4.

(9 a.m. ET) S&P CoreLogic Case-Shiller Home Price Index (20 city) for November.

(9 a.m. ET) U.S. FHFA House Price Index.

(9:45 a.m. ET) U.S. Chicago PMI for January.

(10 a.m. ET) U.S. Conference Board Consumer Confidence for January.

Also: U.S. Fed meeting begins.

With Reuters and The Canadian Press

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2023-01-31 10:36:16Z
1753302700

U.S. stops granting export licenses for China's Huawei, sources say - CNBC

A Huawei logo is displayed at a retail store in Beijing, China on May 27, 2019.

Fred Dufour | AFP | Getty Images

The Biden administration has stopped approving licenses for U.S. companies to export most items to China's Huawei, according to three people familiar with the matter.

Huawei has faced U.S. export restrictions around items for 5G and other technologies for several years, but officials in the U.S. Department of Commerce have granted licenses for some American firms to sell certain goods and technologies to the company. Qualcomm in 2020 received permission to sell 4G smartphone chips to Huawei.

A Commerce Department spokesperson said officials "continually assess our policies and regulations" but do not comment on talks with specific companies. Huawei and Qualcomm declined to comment. Bloomberg and the Financial Times earlier reported the move.

One person familiar with the matter said U.S. officials are creating a new formal policy of denial for shipping items to Huawei that would include items below the 5G level, including 4G items, Wi-Fi 6 and 7, artificial intelligence, and high-performance computing and cloud items.

Another person said the move was expected to reflect the Biden administration's tightening of policy on Huawei over the past year. Licenses for 4G chips that could not be used for 5G, which might have been approved earlier, were being denied, the person said. Toward the end of the Trump administration and early in the Biden administration, officials had still granted licenses for items specific to 4G applications.

American officials placed Huawei on a trade blacklist in 2019 restricting most U.S. suppliers from shipping goods and technology to the company unless they were granted licenses. Officials continued to tighten the controls to cut off Huawei's ability to buy or design the semiconductor chips that power most of its products.

But U.S. officials granted licenses that allowed Huawei to receive some products. For example, suppliers to Huawei got licenses worth $61 billion to sell to the telecoms equipment giant from April through November 2021.

In December, Huawei said its overall revenue was about $91.53 billion, down only slightly from 2021 when U.S. sanctions caused its sales to fall by nearly a third.

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2023-01-31 03:13:00Z
1759374568

Fraud cannot be obfuscated by nationalism: Hindenburg on Adani Group’s rebuttal to its report - The Tribune India

PTI

New Delhi, January 30

US short seller Hindenburg Research has rejected the Adani Group's charge that its report was an attack on India, saying a "fraud" cannot be obfuscated by nationalism or a bloated response that ignored response to key allegations.

Commenting on the 413-page response the Adani Group released late on Sunday evening in response to its report, Hindenburg said it believed India is a vibrant democracy and an emerging superpower with an exciting future and it was Adani Group which is holding it back through "systematic loot".

Hindenburg stood by its last week's report that said its two-year investigation found the Adani Group "engaged in a brazen stock manipulation and accounting fraud scheme over the course of decades".

Hindenburg said the response by the conglomerate run by Asia's richest man Gautam Adani "opened with the sensationalistic claim that we are the 'Madoffs of Manhattan'."

It said Adani claimed that they had committed a "flagrant breach of applicable securities and foreign exchange laws". "Despite Adani's failure to identify any such laws, this is another serious accusation that we categorically deny," it said.

The Adani Group had on Sunday evening likened the damning allegations levelled by Hindenburg to a "calculated attack" on India, its institutions and growth story, saying the allegations are "nothing but a lie".

It said the report was driven by "an ulterior motive" to "create a false market" to allow the US firm make financial gains by dragging stock prices down. The document is "a malicious combination of selective misinformation and concealed facts relating to baseless and discredited allegations to drive an ulterior motive", it said.   

"This is rife with conflict of interest and intended only to create a false market in securities to enable Hindenburg, an admitted short seller, to book massive financial gain through wrongful means at the cost of countless investors," it had said questioning the credibility and ethics of Hindenburg.

Hindenburg responded saying the Adani Group "predictably tried to lead the focus away from substantive issues and instead stoked a nationalist narrative".

"The Adani Group has attempted to conflate its meteoric rise and the wealth of its chairman, Gautam Adani, with the success of India itself," it said.

"We disagree. To be clear, we believe India is a vibrant democracy and an emerging superpower with an exciting future. We also believe India's future is being held back by the Adani Group, which has draped itself in the Indian flag while systematically looting the nation."       Stating that a "fraud is fraud even when it's perpetrated by one of the wealthiest individuals in the world", it said Adani's '413-page' response included only about 30 pages focused on issues related to the report.

"The remainder of the response consisted of 330 pages of court records, along with 53 pages of high-level financials, general information, and details on irrelevant corporate initiatives, such as how it encourages female entrepreneurship and the production of safe vegetables," it said.

"Our report asked 88 specific questions of Adani Group. In its response, Adani failed to specifically answer 62 of them. Instead, it mainly grouped questions together in categories and provided generalised deflections." 

It thereafter went on to reiterate its allegations and how the Adani Group had failed to respond to them.

The report by the tiny New York firm that specialises in short selling led to the Adani Group losing more than USD 50 billion in market value in just two trading sessions last week and Adani himself losing in excess of USD 20 billion, or about one-fifth of his total fortune.

In the report, Hindenburg called out the conglomerate's "substantial debt", which includes pledging shares for loans; that Adani's brother Vinod "manages a vast labyrinth of offshore shell entities" that move billions into group companies without required disclosure; and that its auditor "hardly seems capable of complex audit work". 

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2023-01-30 05:11:00Z
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Title fraud a one-in-a-million threat in B.C., officials say - Times Colonist

Homeowners in B.C. should rest easy: the chance they will ever have their homes stolen out from under them is literally one in a million.

While there have been a flurry of media reports in recent weeks about title fraud in Greater Toronto, there is no indication homeowners in B.C. are vulnerable to having their homes fraudulently sold by someone else, according to real estate professionals.

“It’s such an exaggerated possibility,” said Mike Holmes, a lawyer and owner of Pemberton Holmes Real Estate.

Holmes said given the safeguards in place in this province — what he called a world-class land-title registry system and a number of gatekeepers keeping watch — it would take an incredible set of circumstances to pull it off.

“It was tried in Victoria last year,” he said. “It was stopped by the various gatekeepers that protect the system — the realtors, the banks, the lawyers and the land-title system.”

The numbers back him up. According to the the province’s Land Title and Survey Authority, in the past three years there have been three reported attempts at title fraud. Two are now before the courts, and the third was thwarted by identification safeguards.

The authority typically sees more than 800,000 real estate transactions in a year, but last year it dealt with over one million.

“I don’t want to say it’s a one-in-a-million thing, because there may be frauds out there that we’re not aware of, but we certainly haven’t seen a huge proliferation in fraud claims,” said Carlos MacDonald, director of land titles for the Land Title and Survey Authority.

In most instances of title fraud, the scam artists look for homes that are vacant or have absentee owners and have clear title, which means no mortgage or charges against the title. The fraudsters, who will often rent the property, may impersonate the owners using false identification, quickly list the property for sale and take an early, reasonable offer.

Holmes said in the Victoria case, real estate agents and lawyers thwarted the attempt when they went to verify the identification.

The fraudster “may have gotten to the first base of 20, [but] it was never going anywhere,” he said.

“We have an extremely good land-title system in British Columbia, and by and large the lawyers and notaries operating here are well trained in identifying people and to look for suspicious activity and to report it,” added Kate Roome, a Duncan-based notary public.

Roome said fraudsters tend to avoid properties that have any kind of charge against them, such as a line of credit or mortgage.

“When there is a lender on title already, it makes committing that fraud just that much more complicated,” she said.

When a fraud does happen, MacDonald said, it’s typically because there have been a series of mistakes. He notes one of the cases currently before the courts alleges some of the real estate professionals did not live up to the required standard of care.

Property owners being around and involved also tends to put off the scam artists, he said.

“Absentee owners are more vulnerable to all sorts of things. If you’re a landlord and you’re checking on your place on a regular basis, you’re less likely to end up with a marijuana grow-op in your house and you’re probably less likely to end up with this type of issue,” he said.

For homeowners concerned about title fraud, there are several things they can do — including buying title insurance, which will help recover legal fees if they do experience a fraud.

MacDonald said there are two assurance funds, one run by the province and the other by the Land Title and Survey Authority.

“If an innocent homeowner loses their home or loses an interest in their title as a result of either fraud or a mistake of the registrar or his staff, the assurance fund is there to compensate the victim,” he said.

The LTSA also offers Parcel Activity Notifier subscriptions, which provide alerts if any application is submitted against a title.

“It’s a very effective way of preventing land-title fraud,” he said.

Holmes said another old-school method is also effective — the duplicate certificate of title.

“It’s hardly ever used today, but still is available where a person takes a duplicate certificate of title and lodges it with a lawyer or a bank,” he said. “Every title has a duplicate that is normally just lodged with the land-title system, but an owner can apply to take out that duplicate certificate of title. The title cannot be touched until that duplicate certificate title is put back into the land-title system.”

The downside is that reinstating a lost duplicate is not a straightforward process.

Mortgage broker Scott Travelbea advises clients with clear titles to take out a secured line of credit on their homes.

“Once it’s set up, if they ever want to borrow funds, they’ve got access to them and they generally pay nothing for it,” he said. “And it creates that layer of security because to discharge the mortgage, the lawyer has to remove it from the title of the home.”

MacDonald said since the recent media reports, the LTSA has been fielding a lot of of calls about people concerned about fraud.

“For them it’s absolutely scary, but it is uncommon,” he said.

aduffy@timescolonist.com

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2023-01-29 13:15:00Z
CBMiamh0dHBzOi8vd3d3LnRpbWVzY29sb25pc3QuY29tL2xvY2FsLW5ld3MvdGl0bGUtZnJhdWQtYS1vbmUtaW4tYS1taWxsaW9uLXRocmVhdC1pbi1iYy1vZmZpY2lhbHMtc2F5LTY0NTA4NjfSAQA

FTX founder Bankman-Fried objects to tighter bail, says prosecutors 'sandbagged' him - Reuters

NEW YORK, Jan 28 (Reuters) - Lawyers for Sam Bankman-Fried on Saturday urged a U.S. judge not to ban the indicted FTX cryptocurrency executive from communicating with former colleagues as part of his bail, saying prosecutors "sandbagged" the process to put their client in the "worst possible light."

The lawyers were responding to a Friday night request by federal prosecutors that Bankman-Fried not be allowed to talk with most employees of FTX or his Alameda Research hedge fund without lawyers present, or use the encrypted messaging apps Signal or Slack and potentially delete messages automatically.

Bankman-Fried, 30, has been free on $250 million bond since pleading not guilty to charges of fraud in the looting of billions of dollars from the now-bankrupt FTX.

Prosecutors said their request was in response to Bankman-Fried's recent effort to contact a potential witness against him, the general counsel of an FTX affiliate, and was needed to prevent witness tampering and other obstruction of justice.

But in a letter to U.S. District Judge Lewis Kaplan in Manhattan, Bankman-Fried's lawyers said prosecutors sprung the "overbroad" bail conditions without revealing that both sides had been discussing bail over the last week.

"Rather than wait for any response from the defense, the government sandbagged the process, filing this letter at 6:00 p.m. on Friday evening," Bankman-Fried's lawyers wrote. "The government apparently believes that a one-sided presentation - spun to put our client in the worst possible light - is the best way to get the outcome it seeks."

Bankman-Fried's lawyers also said their client's efforts to contact the general counsel and John Ray, installed as FTX's chief executive during the bankruptcy, were attempts to offer "assistance" and not to interfere.

A spokesman for U.S. Attorney Damian Williams in Manhattan declined to comment.

Bankman-Fried's lawyers proposed that their client have access to some colleagues, including his therapist, but not be allowed to talk with Caroline Ellison and Zixiao "Gary" Wang, who have pleaded guilty and are cooperating with prosecutors.

They said a Signal ban isn't necessary because Bankman-Fried is not using the auto-delete feature, and concern he might is "unfounded."

The lawyers also asked to remove a bail condition preventing Bankman-Fried from accessing FTX, Alameda or cryptocurrency assets, saying there was "no evidence" he was responsible for earlier alleged unauthorized transactions.

In an order on Saturday, Kaplan gave prosecutors until Monday to address Bankman-Fried's concerns.

"The court expects all counsel to abstain from pejorative characterizations of the actions and motives of their adversaries," the judge added.

Reporting by Jonathan Stempel in New York; Editing by Andrea Ricci

Our Standards: The Thomson Reuters Trust Principles.

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2023-01-28 20:16:00Z
1755632114

Afraid to check a bag? Canada's missing baggage woes explained - CBC News

Deborah Cleary was exasperated.

When she landed in Montreal on Dec. 19, following a trip to Italy, she discovered her suitcase was missing. More than a month later, Air Canada still hadn't found her bag. 

"I've spent so much time thinking about it, worrying about it, checking online, calling Air Canada," said Cleary from her home in Plattsburg, N.Y., on Tuesday. "I'm just sort of desperate to get my bag back."

The return to travel since the worst of the COVID crisis has been turbulent, plagued by mass flight disruptions and missing baggage piling up at airports. That has led to calls for airlines to improve their baggage delivery systems.

"It's broken, so I think they need to fix that," said Cleary, who visited the Montreal airport two weeks ago to search for her bag amidst a sea of unclaimed luggage. She didn't find it.

However, following a CBC News inquiry to Air Canada, Cleary learned on Friday that her suitcase is being shipped to her home. 

"I'm very, very happy," she said. "I had almost resigned myself, I was never going to see it again."

Deborah Cleary and Dan Albert of Plattsburgh, N.Y., are still waiting to be reunited with their missing baggage that disappeared on their return flight from Milan to Montreal. (submitted by Deborah Cleary)

Canada's first round of missing baggage chaos erupted in the summer, largely sparked by staffing shortages as airports and airlines scrambled to ramp up operations. 

• Have a question or something to say? Email: ask@cbc.ca or join us live in the comments now.

There were high hopes the holiday travel season would go more smoothly -- until severe winter storms hit much of Canada, causing hundreds of delayed and cancelled flights, plus a backlog of lost luggage.

"In the airline industry, a delay of greater than 15 minutes generally results in missed connections," said former Air Canada executive Duncan Dee. "Delays equal missing bags."

Former Air Canada executive Duncan Dee says airports need more infastrucutre funding to keep operations running smoothly during bad weather. (CBC)

Dee said airlines need to do a better job keeping track of luggage, and the federal government also needs to invest more in airports.

In late December, cold weather caused a baggage belt to freeze at Toronto's international airport; a fierce snow storm caused widespread flight delays and cancellations at Vancouver's international airport.

"There's obviously a need for better infrastructure, better resources for airports … to make them more resilient to these weather events," said Dee.

What about the airlines?

When asked this week about recent travel chaos, Transport Minister Omar Alghabra said airports will get the tools they need, but did not elaborate. 

On the baggage issue, he pointed the finger at airlines. 

"I find it extremely frustrating when I hear stories of people not having their luggage for days on end," he said during an event in Hamilton. "Airlines should be doing more."

His comments follow several recent media reports about air passengers' struggles to find their missing luggage

They include the saga of Nakita Rees and Tom Wilson of Cambridge, Ont., who battled with Air Canada for more than four months to retrieve Wilson's missing suitcase. 

WATCH |Ontario couple told their luggage was lost — but it wasn't: 

Air Canada said this couple’s luggage was lost. AirTags showed otherwise

5 days ago

Duration 2:18

A couple says Air Canada donated their luggage to charity just a month after it got lost en route to Toronto's Pearson Airport. They tracked it to a storage locker.

The bag vanished during their flight home from Greece in September. Because the couple had put an air tag tracker inside the suitcase, they were able to track its journey to a storage facility in nearby Etobicoke, Ont. 

Even though Rees shared with Air Canada the whereabouts of the bag, the airline deemed it lost. 

"The most frustrating thing about it was we had no way of getting it, even though we knew the location and we told the airline so many times," said Rees. "Because the air tags are newer, I just don't think airlines know how to even use that information."

The couple finally got the suitcase back this week — after their story was picked up by the media.

Airlines respond

Other passengers have also complained about similar experiences when tracking their lost luggage with air tags. 

Former Air Canada executive Dee said airlines typically track luggage by scanning their baggage tags and that their systems currently can't accommodate air tracking technology.

"That's something where airline processes have not caught up to the technology that's available," he said. "No airline in the world has the ability right now to accept information from travellers."

Alghabra suggested airlines need to change with the times. 

"We hear about how Amazon is able to identify where their items [are at] every moment," he said. "It's frustrating that airlines still have not modernized their luggage handling system."

Air Canada told CBC News it's constantly exploring new technologies. The airline added that its baggage delivery rate has returned to normal, following the stormy holiday weather. 

Air Canada said that in Rees' case, the baggage tag had fallen off the suitcase. The airline didn't say how it eventually located the couple's bag, but did indicate that they get to keep the $2,300 in compensation they received for lost luggage. 

WestJet said it has launched a strategic review to fine-tune its baggage systems. "[We] are committed to working together with our third-party service partners … to ensure we improve in this area," said spokesperson Madison Kruger in an email. 

Baggage compensation

Travellers can claim up to approximately $2,350 for luggage that is lost or delayed on an international flight. For delayed baggage on domestic flights, the airlines design their own rules. 

Alghabra's office told CBC News this week the government is exploring ways to strengthen rights for air passengers, including for delayed and lost baggage.

As for passenger Cleary, she had applied for compensation for a lost bag, but said getting it back is a better outcome. 

"I would much prefer to have my bag back than any money from Air Canada."

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2023-01-28 18:56:27Z
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City, RTG settle their light rail contract dispute - CBC.ca

The City of Ottawa and Rideau Transit Group (RTG) have reached an out-of-court settlement over the contract to maintain the capital's light rail transit system, which includes a plan to fix problems for the long term.

Details on its terms are few, but a joint statement issued Friday says the agreement "resolves several disputes between them and resets their relationship." That's something Justice William Hourigan had urged after releasing the LRT Public Inquiry's final report.

"I think it's the best deal for our customers and working collaboratively with RTG will help us to deliver better service to our customers — this is my first goal," said Renée Amilcar, the city's head of transit services.

According to the statement, Rideau Transit Group now acknowledges it was in default on its contract after a pair of derailments in August and September 2021 — something it had previously disputed.

The consortium also has a "rigorous plan to address the issues that led to the derailments" and is committed to the "sustainable resolution of these issues" on the light rail vehicles before the eastern extension to the Confederation Line opens in early 2025. 

That includes "a sustainable resolution of the axle bearing issue." The derailment in August 2021 happened after a wheel broke off an axle because of a bearing issue. Testimony at the LRT public inquiry suggested a larger problem: that the way the wheel meets the rail on sharp curves puts too much stress on train components, including the bearings.

The statement said the two sides had resolved their dispute over "the city's administration of the contract during the maintenance phase" — the public inquiry had recommended the city be fair and not overly punitive in the way it made payment deductions.

When asked how much money the city has withheld, and if its maintenance partner would now be paid, Amilcar said she couldn't comment.

Hearing dates dropped

The terms of the agreement are confidential, she said, and Amilcar indicated the public would not see the terms or know whether taxpayer money was involved.

The settlement was made just as the two sides were scheduled to head to court for a mid-February hearing. Lawyers appeared at a short, virtual case conference Friday morning and told a judge those dates could be wiped off the calendar.

Crews walk along the Confederation Line in Ottawa on Aug. 9, 2021, one day after the axle of this out-of-service LRT train dislodged from the rail. The Transportation Safety Board of Canada is now investigating. (Alexander Behne/CBC)

This is a far cry from late 2021 when the city calculated so many maintenance "failure points" from two derailments that it sent its private partner a second notice of default — the first had come about in March 2020, roughly half a year after the problem-plagued Confederation Line launched.

The city needed the judge's declaration that RTG had defaulted on its contract so it could explore options that included breaking its 30-year, approximately $1-billion maintenance contract with the consortium, which comprises SNC-Lavalin, ACS Infrastructure and Ellis Don.

One year and a public inquiry later, the stated intention now is to work with Rideau Transit Group. Mayor Mark Sutcliffe acknowledged that at city council on Wednesday.

The transit commission chair re-iterated it on Friday morning.

"One of the conclusions in Justice Hourigan's report was that for our transit system to be successful, we need to be working in good faith, we need to have good communication, and we need to be co-operating with the partnership. I think this reflects that," said Coun. Glen Gower.

OC Transpo confirmed Friday's settlement is not related to the separate court processes involving a large $130 million lawsuit by the City of Ottawa and countersuit by Rideau Transit Group about the construction of the line.

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2023-01-27 21:50:41Z
CBMiWGh0dHBzOi8vd3d3LmNiYy5jYS9uZXdzL2NhbmFkYS9vdHRhd2Evb3R0YXdhLWxpZ2h0LXJhaWwtbHJ0LXJ0Zy1sYXdzdWl0LXNldHRsZS0xLjY3MjgwODjSAQA

As the BoC takes a pause from interest rate hikes, all eyes are on the labour market - BNN Bloomberg

After a series of historic interest rate hikes, economists are left wondering whether job losses are next.

High interest rates cause businesses and consumers to pull back on spending. As business slows, companies review their staffing levels and unemployment tends to climb.

However, up until now, the Canadian labour market has kept its steam.

"I think it's surprised both market expectations and also the Bank of Canada's expectations," said BMO economist Shelley Kaushik.

In December, the unemployment rate was five per cent, just above the all-time low of 4.9 per cent reached in the summer.

In its latest monetary policy report, the Bank of Canada said it expects the full effects of rate hikes on the labour market to play out over a longer period.

"Part of rebalancing demand and supply in the economy is rebalancing the labour market," said Governor Tiff Macklem during a news conference on Wednesday.

The comment came as the central bank raised its key interest rate for the eighth consecutive time and said it was taking a conditional pause, keeping the door open to further rate hikes if inflation isn't tamed.

Labour groups have voiced concerns about the Bank of Canada's rate hikes in recent months, with Unifor president Lana Payne previously accusing the central bank of waging war on the working class.

Jim Stanford, an economist and the director of the Centre for Future Work, is concerned higher interest rates will slow the economy more than the central bank is anticipating.

"I think that a serious downturn is still more likely than the soft landing," he said.

Stanford said 40 years ago, that was the case when the Bank of Canada fought off runaway inflation with rapid interest rate hikes.

In either case, he said it will mean "higher unemployment and reduced life chances for people who are trying to find a way and in a labour market."

But some economists are cautiously optimistic that employment may prove to be somewhat resilient to the slowdown, given that unemployment is currently near historical lows.

"The hope is that as businesses start to see that slower demand, that they will start to pull those job vacancies before they start firing workers," said Kaushik.

Job vacancies reached record highs last year, with over one million jobs unfilled in the economy.

Since then, the number of unfilled positions have fallen to around 850,000 vacancies in November.

On Thursday, Statistics Canada reported the number of job vacancies fell by 2.4 per cent in November to their lowest level since August 2021.

The Bank of Canada is also hopeful it can rebalance the economy and restore low inflation without trigger massive job losses.

In a research paper published in the fall, Bank of Canada researchers estimated in their base case scenario that restoring normal job vacancy levels would push up the unemployment rate to a peak of 6.7 per cent.

As the economy cools, BMO's forecast suggests Canada's unemployment rate will average at six per cent this year.

And while that does suggest more Canadians will be unemployed, Kaushik said a six per cent unemployment rate is "still fairly low."

A greater loss in unemployment was experienced during the 2008 global financial crisis. According to Statistics Canada, the unemployment rate rose from 6.3 per cent to 8.6 per cent between October 2008 and October 2009.

This report by The Canadian Press was first published Jan. 26, 2023.

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2023-01-26 21:00:00Z
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Rent increased more than 18% last year for new tenants, new numbers show - CBC News

A surge in demand pushed Canada's rental market to its tightest level in two decades last year, with the vacancy rate in purpose-built apartments dipping below two per cent and rent for new tenants going up by 18 per cent.

Those were some of the main takeaways from the Canada Mortgage and Housing Corporation's annual report on the state of Canada's rental market.

The figures cited above were for purpose-built rental apartments, so they don't include what's happening in condos, or in apartments built out of occupied family homes.

For purpose-built rentals, the national vacancy rate fell to 1.9 per cent last year, its lowest level since 2001. 

Booming demand for apartments pushed up the price to get one, too, with the average rent hitting $1,258 a month. That was up by 5.6 per cent from the previous year's level, and roughly twice the annual average seen for the past 30 years.

But rent didn't go up at the same pace for every unit.

Apartments where there was a change in tenants saw the rent go up by 18.9 per cent. Those where there was no change in tenancy saw rents go up by only 2.9 per cent, on average. "This reflects the fact that, once a tenant vacates a unit, landlords are generally free to increase asking rents to current market levels," the CMHC said.

That gap was even more stark in two of Canada's biggest cities, Toronto and Vancouver, where average rents for a unit that saw a tenant change went up by 29 and 24 per cent, respectively.

Geordie Dent, the executive director of the Federation of Metro Tenants Association, has spent more than a decade as a watchdog for the rental market in Toronto. He says the situation is as dire as he's ever seen, with a surge in so-called "renovictions," where landlords are eager to take advantage of higher market rents by evicting tenants and raising rents to someone new

"There's an incentive for them to try to illegally evict people and raise the rent," he told CBC News in an interview. He says he hears stories every day of people staying in unsuitable housing situations because of desperation. "They're afraid that if they get kicked out of their current place for a new one, rent's going to be like $1,000 higher."

WATCH | 'Renovictions' becoming common, tenant advocate says: 

Toronto tenant advocate says market is dire

4 hours ago

Duration 6:07

Geordie Dent, the executive director of the Federation of Metro Tenants' Association, says the situation in Toronto's rental market is the worst he's ever seen.

Things aren't much better across the country in Vancouver, either. The vacancy rate fell to just 0.9 per cent, with the average price for a two-bedroom hitting $2,002 a month. That's up by 5.7 per cent from last year, but it's up by 24 per cent among units that have seen a tenancy change.

Some of those in the lower mainland's rental market fear the system is irreparably broken.

Vinny Cid was working and living in Victoria, but when his job allowed him to work remotely in 2021, he made the decision to move home with his parents. 

He, his sibling and his two parents share a rental home in Richmond, B.C. for $2,800 a month which suits their needs, but he says they are only able to get that because his parents have lived in the unit since 2016.

"The rental situation has devolved quickly," he told CBC News in an interview Thursday. "I check rental listings almost daily, and something similar today would cost $4,000 or more."

"It's depressing to see how prices have spiraled out of control very quickly," he said.

While his situation works for him for now, should his employment or needs change, he suspects he would have to leave the province, or even the country. And he says he worries for those who don't have the income and family support he has.

"Everybody is being told to either improvise or get pushed out," he said. "In terms of outlook, it doesn't look good."

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2023-01-26 20:25:06Z
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Bank of Canada's rate hike pause supported by majority of Canadians: Yahoo/Maru poll - Yahoo Canada Finance

A majority of Canadians support the Bank of Canada's decision to put its aggressive tightening cycle on pause, a new Yahoo/Maru Public Opinion poll has found. (REUTERS/Blair Gable)

A majority of Canadians support the Bank of Canada's decision to put its aggressive tightening cycle on pause and stop hiking its benchmark interest rate, a new Yahoo/Maru Public Opinion poll has found.

The survey of 3,076 Canadians, conducted shortly before the Bank of Canada hiked its benchmark rate another 25 basis points, found that 57 per cent of Canadians agree that the central bank should pause raising rates for a few months so that the impact of the hikes can be fully assessed. Another 28 per cent say the bank should change course and cut rates, while 15 per cent say it should continue raising rates until inflation is brought down further.

The Bank of Canada's hike to its benchmark overnight rate on Wednesday brought the key policy rate to 4.5 per cent. The decision was the smallest increase since March 2022, and it came with a clear signal that the central bank is ready to pause its rapid rate hike cycle that saw it raise rates eight consecutive times. Still, Bank of Canada governor Tiff Macklem warned that the Bank is prepared to return to hiking rates if inflation is not tamed.

"If we start to see an accumulation of evidence that inflation is not coming down in line with our forecast, we're prepared to raise interest rates further," Macklem said.

While most of those surveyed support the central bank's move to pause its interest rate hikes, Canadians still expect the Bank of Canada to raise its rate to an average of 4.8 per cent, indicating that they believe the Bank has at least one more hike to go.

"While the majority of Canadians not unexpectedly agreed with the Bank of Canada's pause on further rate hikes until an evaluation of the cumulative impact has happened, they also don't believe that rates won't rise again," Maru executive vice-president John Wright said.

"There's no doubt that if the Bank is hoping for a soft landing recession, they're now like curlers who have thrown the rock and are watching to see if it needs more sweeping or if it will do just fine on its own."

The survey found that Canadians' opinion on what the Bank should do with regard to interest rates varied across homeowners based on their financing arrangements. A majority of homeowners with a fixed-rate mortgage agreed the central bank should pause its rate hikes (57 per cent), while 32 per cent say it should reverse course and 12 per cent say rates should keep rising further. Of those with a variable-rate mortgage, slightly more than half (52 per cent) say the Bank of Canada should pause its hiking cycle, while 42 per cent say the Bank should reverse course and cut rates and 6 per cent say it should keep hiking.

The survey of 3,076 Canadian adults was conducted between Jan. 23 and Jan. 24 and has an estimated margin of error of +/- 1.8 per cent, 19 times out of 20. The results were weighted by education, age, gender, and region to match the Canadian population, according to census data.

Alicja Siekierska is a senior reporter at Yahoo Finance Canada. Follow her on Twitter @alicjawithaj.

Download the Yahoo Finance app, available for Apple and Android.

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2023-01-26 13:57:29Z
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