MONTREAL — Laurentian Bank of Canada's chief executive says it's launching a new strategic plan meant to make the company "stronger, sustainable, and more profitable."
The Montreal-based financial institution announced the move Friday, saying the plan will position the company as an alternative bank for young and middle-class customers who are "underserved or under appreciated" by rivals and more likely to consider switching from rivals.
"Commercial banking will remain the bank's growth engine, and we will grow market share in personal banking by introducing new, low-cost, value-add products to attract new customers and increase deposits, while simultaneously simplifying our offering," president and chief executive Éric Provost, said in a press release.
The bank intends to lure in new customers by reducing complexities within its business, offering more self-serve banking capabilities and investing in technology.
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It will also simplify its capital markets business to focus on areas where it has the strongest expertise and seek growth in several areas of its commercial banking division, like inventory financing, commercial real estate and small and medium business lending.
The plan comes weeks after a layoffs announcement and as the bank has struggled to turn itself around after putting itself on the market but failing to find a buyer.
Its latest earnings, which were also revealed Friday, showed the bank incurred a loss of $117.5 million in its second quarter, compared with net income of $49.3 million a year earlier.
The loss amounted to $2.71 per diluted share for the quarter ended April 30, down from a profit of $1.11 per diluted share in its second quarter last year.
Revenue totalled $252.6 million, down from $257.2 million a year earlier.
The results came as Laurentian's provision for credit losses totalled $17.9 million, up from $16.2 million in its second quarter last year.
On an adjusted basis, it earned 90 cents per diluted share in its latest quarter, down from an adjusted profit of $1.16 per diluted share a year earlier.
Weeks after the quarter ended, the bank announced it was cutting about two per cent of its workforce and ending equity research in mid-May.
Last year, it failed to find a buyer for the business and the board promoted Éric Provost to the CEO position in October, after Rania Llewellyn resigned from the top job in the wake of a system crash that blacked out much of the bank's services.
Llewellyn became the first woman to lead a major Canadian bank when she took on Laurentian's CEO role in October 2020.
This report by The Canadian Press was first published May 31, 2024.
Spending by Canadian households helped the economy grow at an annualized rate of 1.7 per cent in the first three months of the year, Statistics Canada said Friday.
Economists say that expansion was less than expected, as estimates had called for a better than two per cent increase, but weaker growth than forecast increases the odds of an interest rate cut by the Bank of Canada next month.
Household spending on services rose 1.1 per cent, boosted by spending on telecommunications services, rent and air travel, while household spending on goods gained 0.3 per cent, helped higher by spending on new trucks, vans and sport utility vehicles.
The results for the first quarter came as Statistics Canada said real gross domestic product was essentially unchanged in March, following growth of 0.2 per cent in February.
Douglas Porter, chief economist at the Bank Of Montreal, said in a note the country's economy "cooled notably in the early spring after a decent start to the year," referring to January's performance, which surpassed predictions and was a 12-month high.
Katherine Judge, director and senior economist of CIBC Capital Markets, said in a note that while the economy improved, "we're not yet basking in the sun," citing concern that March showed essentially no economic growth, after a boost in spending at the start of the year.
Friday's reading of the economy comes ahead of the Bank of Canada's interest rate decision set for next week.
Rate cut hangs in balance
Bank of Canada governor Tiff Macklem has said a rate cut is within the realm of possibilities, but that the decision will be driven by the economic data.
He has said the central bank is seeing the right conditions to begin lowering its policy rate from five per cent, but that he wants to see those conditions sustained to ensure inflation is heading down to the bank's two per cent target.
If the Bank of Canada lowers interest rates next week, it would provide relief for homebuyers and some homeowners. These homes are in downtown Toronto. (Esteban Cuevas/CBC)
The annual inflation rate fell to 2.7 per cent in April compared with 2.9 per cent in March.
The March GDP figure came as the construction industry gained 1.1 per cent for the month, its strongest growth rate since January 2022. Meanwhile, the manufacturing sector fell 0.8 per cent, weighed down by retooling work at multiple automotive assembly plants in Ontario.
The agency said its preliminary estimate for the economy in April points to growth of 0.3 per cent as increases in manufacturing, mining, quarrying, and oil and gas extraction and wholesale trade were partially offset by decreases in utilities.
Statistics Canada also revised its reading for growth in the fourth quarter of 2023 down to an annualized rate of 0.1 per cent, compared with its initial report of an annualized rate of one per cent.
Parsing the numbers, Judge at CIBC said that "the Bank of Canada remains on track to deliver the first interest rate cut at next week's meeting."
Porter said the data modestly increases the chances of a rate cut next week, and while there are "respectable arguments" on both sides of the decision, "we've been calling for a June cut since late last year, and will stand by that call."
For its part, RBC said in a note that it sees little reason for the Bank of Canada to wait on easing rates and is looking for a 25 basis point cut to the overnight rate next week.
On the other hand, TD Bank senior economist James Orlando noted that the central bank has prided itself on communicating its intentions to make changes to monetary policy ahead of an actual move.
"If it wants to keep up this effort of transparency and forward guidance, we expect the BoC will hold rates steady next week and use the meeting to tee-up a rate cut in July," Orlando wrote in a report.
"That said, expect fireworks as the BoC could go either way with this one."
Signs of slowing economic growth could set up “fireworks” at the Bank of Canada’sinterest rate decision next week, one economist says, as odds rise for the first rate cut of the cycle.
The Canadian economy managed to keep growing in the first quarter, but at a slower pace than first expected, Statistics Canada said Friday.
StatCan said real gross domestic product (GDP) grew at an annualized pace of 1.7 per cent in the first quarter of 2024.
The agency’s preliminary estimates had assumed the Canadian economy grew at an annualized rate of 2.5 per cent to start the year. That’s also below what most economists were expecting and the Bank of Canada’s latest estimates of 2.8 per cent for the quarter.
An uptick in household spending helped fuel economic growth in the first quarter, though businesses saw their inventory accumulation slow. Consumers were spending more on services in the quarter, StatCan said, particularly on rents, telecom and air transportation.
Canadians were also saving more, however, with the household savings rate reaching 7.0 per cent, the highest level in two years amid gains in disposable income.
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On a monthly basis, StatCan said growth was essentially unchanged in March. Early estimates for April show signs of a return to growth at 0.3 per cent amid strength in the manufacturing, mining and oil and gas sectors. The agency will update those preliminary figures in June.
StatCan also revised its earlier estimates for the fourth quarter of 2023. Following an annualized dip of 0.3 per cent in the third quarter last year, StatCan now says Canada eked out growth of just 0.1 per cent to end the year – narrowly avoiding the definition of a technical recession of two consecutive quarters of declines.
Bank of Canada set up for pivotal rate decision
The GDP report is the last major economic data point before the Bank of Canada’s interest rate decision set for June 5.
Central bank governor Tiff Macklem has said a rate cut is within the realm of possibilities, but that the decision will be based on the economic data. Inflation has continued to cool since the central bank’s latest rate decision in April, coming in at 2.7 per cent annually in that month.
Some economists reacting to the softer-than-expected GDP figures on Friday said the Bank of Canada is clear to cut next week.
BMO chief economist Doug Porter said in a note to clients Friday that, looking past the fluctuations month to month and quarter to quarter, StatCan is painting a picture of a slowing economy in Canada that’s growing “well short of potential.”
Will the Bank of Canada cut interest rates in June?
Porter said that Friday’s GDP report “modestly” increases odds for a rate cut next week.
“There are respectable arguments on both sides of the decision, but we believe the balance of evidence points to a cut,” he said.
Reuters said Friday that money markets hiked bets on a rate cut next week to 80 per cent after the GDP data release, up from 66 per cent.
The Bank of Canada might well wait to see more signs of easing in wage growth before delivering an interest rate cut, noted RSM Canada economist Tu Nguyen in a statement Friday.
But she said an interest rate hold next week would be “unnecessarily restrictive” amid signs of easing in the economy. An interest rate cut of a quarter percentage point next week would not be enough to thwart the central bank’s efforts to date in getting inflation back to the Bank of Canada’s two per cent target, Nguyen said.
“Canada’s GDP data add to the mountain of evidence that a rate cut should come next week,” she said.
On the “hold” side of the debate is TD Bank. Director and senior economist James Orlando said in a note that while data has been showing for months that the central bank is in the clear to cut rates, Macklem has not given clear enough signals that the governing council is ready to act.
Inflation is cooling, why are Canadians still so stressed out financially?
“This central bank has prided itself on communicating its intentions to make changes to monetary policy ahead of an actual move. If it wants to keep up this effort of transparency and forward guidance, we expect the BoC will hold rates steady next week and use the meeting to tee-up a rate cut in July,” Orlando wrote.
“That said, expect fireworks as the BoC could go either way with this one.”
WestJet says it's reached a tentative deal with its Encore pilots after two weeks of negotiations, steering clear of a potential strike this week.
The Air Line Pilots Association, which represents the 350-plus aviators at the regional carrier, issued a 72-hour strike notice yesterday that could have seen a work stoppage as early as this weekend.
Meanwhile, WestJet had sent out an advance lockout notice to the union, saying planes could be grounded as early as 6 p.m. mountain time on Saturday if no deal was reached.
In an interview this afternoon, WestJet president Diederik Pen said the new agreement comes as a "relief" for all parties as well as for travellers, some 6,000 of whom would have been affected for each day of a strike.
The union says the tentative deal, which its membership is set to vote on next month, will help with pilot retention, working conditions and work-life balance.
The pilots, who approved a strike mandate in early April, rejected an initial tentative agreement earlier this month.
Some Edmontonians would like to see Vancouverites stay right where they are after a report showed that Edmonton is the top relocation destination for Vancouverites seeking a lower cost of living.
Royal LePage released a report earlier this week outlining Canada’s 10 most affordable cities. The report also contained a survey gauging Canadians’ attitudes toward relocating from major centres like Vancouver, Toronto, and Montreal into more affordable markets.
According to the survey, 45% of Vancouver respondents said they would consider purchasing a home in a more affordable city. Vancouverites picked Edmonton as their top relocation choice (19%), followed by St. John’s (13%), and Thunder Bay (9%).
The news garnered plenty of reaction from Edmontonians, who, while living in the fifth-most affordable city in the country, are seeing housing costs rise rapidly. An influx of new residents, particularly from Ontario and British Columbia, is a contributing factor.
Edmontonians had plenty to say in the comments on our Instagram, with many wanting housing costs to stay comparatively low.
“Please don’t move here! We are struggling here already. We don’t need you here,” one reader pleaded.
Another user who moved to Edmonton two years ago praised their choice, saying, “We did in 2022, best decision we’ve made.”
“Welcome to Edmonton! The City never gets out of the house; spring weather is like wildfire, smoke and wind. Summer: Wildfire smoke, dandelion allergy and mosquitos. Winter: only -50°C,” another joked.
“Don’t because my rent is already too high,” a user commented.
Another person poked some fun at the rivalry between Alberta’s major cities, adding, “People from Calgary are not going to like this, lol.”
A spring report from Royal Lepage found that the aggregate price of a home in Edmonton increased by 3% year-over-year to $442,200 in the first quarter of 2024.
The real estate company predicts the aggregate price of a home in Edmonton will increase by 6.5% in Q4 of 2024 compared to the same quarter last year.
Renters are also feeling the crunch, with Edmonton seeing some of the highest year-over-year price gains in the country.
The bank said Thursday it will now pay a quarterly dividend of $1.42 per share, an increase of four cents. It also said it plans to buy back up to 30 million of its shares.
The moves came as RBC said it earned $3.95 billion or $2.74 per diluted share for the quarter ended April 30, up from $3.68 billion or $2.60 per diluted share a year earlier, helped in part by record capital markets revenue.
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“This quarter, we saw strong growth across diversified revenue streams,” said chief executive Dave McKay on an earnings call.
He said the bank’s capital generation means it has options ahead for growth, including potential acquisitions, even as the bank returns more money to shareholders.
“This enormous capital that we are generating gives us significant strategic flexibility inorganically.”
The bank also has a wide range of growth options within the bank now, including making the most of its $13.5-billion HSBC Canada acquisition.
The roughly 4,500 employees RBC took on with the acquisition are now free from the uncertainty around the deal, and the barriers it posed to bringing on clients, he said.
“They’ve been on the defence for 18 months, and now we’re on the offence and you can see the excitement in their eyes to get back,” said McKay.
Revenue totalled $14.15 billion, up from $12.45 billion in the same quarter last year.
The bank’s provision for credit losses amounted to $920 million for the quarter, up from $600 million a year ago.
On an adjusted basis, RBC said it earned $2.92 per diluted share, up from an adjusted profit of $2.68 per diluted share a year earlier.
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Analysts on average had expected a profit of $2.75 per share, according to LSEG Data & Analytics.
The results put RBC as the best banking performer of the quarter, said Scotiabank analyst Meny Grauman.
“With all the Big 6 Canadian banks now having reported, we would put RY at the top of the class this quarter,” he said in a note.
RBC said its personal and commercial banking business earned $2.05 billion, up from $1.92 billion in the same quarter last year, while its wealth management business earned $769 million, up from $719 million a year ago.
The bank’s insurance business earned $177 million in the second quarter, up from $170 million in the same quarter last year.
RBC’s capital markets business earned $1.26 billion, up from $962 million a year ago, helped by higher merger and acquisition activity, loan syndications, as well as equity and debt origination.
The bank’s corporate support segment reported a loss of $309 million for its latest quarter compared with a loss of $86 million a year ago.
Royal Bank of Canada beat analysts’ estimates on strong performance from the company’s capital-markets business and lower-than-expected provisions for potential loan losses.
Canada’s biggest lender earned $2.92 a share on an adjusted basis in the fiscal second quarter, it said in a statement Thursday, topping the $2.76 average estimate of analysts in a Bloomberg survey. The bank’s provisions for credit losses totaled $920 million, less than the $929 million analysts had forecast.
That comes after Bank of Montreal’s shares tumbled Wednesday after reporting higher provisions than expected. Bank of Nova Scotia and Toronto-Dominion Bank earlier reported loan-loss provisions of more than $1 billion each. Set-asides at both Toronto-Dominion and National Bank of Canada came in higher than analysts had forecast.
At Royal Bank, net income in the firm’s capital-markets business rose 31 per cent from a year earlier to $1.26 billion, primarily owing to higher revenue in corporate and investment banking.
Royal Bank saw costs increase 12 per cent from a year earlier as it digests the purchase of HSBC Holdings Plc’s Canadian assets, the biggest takeover in its history. Non-interest expenses totaled $8.31 billion in the three months through April, more than the $7.95 billion analysts were expecting.
Royal Bank closed its $13.5 billion takeover of HSBC Canada on March 28, with about one month left to go in the quarter, and immediately began converting branches to the Royal Bank banner and switching customers and employees over to its own systems. The lender has also grappled with higher costs at its Los Angeles-based City National Bank subsidiary, where it’s investing in improved risk controls after being hit with a regulatory fine over lapses in compliance practices.
Overall net income at Toronto-based Royal Bank was up 7.3 per cent to $3.95 billion.
The lender’s Common Equity Tier 1 ratio was 12.8 per cent at the end of the quarter, higher than the 12.5 per cent level it forecast it would hit after closing the HSBC deal. It announced a 4-cent increase in its quarterly dividend to $1.42 per share.
Also during the quarter, Royal Bank fired Chief Financial Officer Nadine Ahn, a shock exit that came after the bank said she’d violated its code of conduct by having an undisclosed “close personal relationship” with a colleague who was given preferential treatment. Katherine Gibson was named interim CFO.
Delta, B.C., Mayor and Metro Vancouver board chair George Harvie says he won't travel to Amsterdam, where he was to learn about urban drainage and flooding mitigation approaches meant to benefit the region, because of recent attention over his role on Delta council and travel expenses.
The trip, set for mid-June, was to come in the final weeks as his role as chair of the regional government. Metro Vancouver includes 21 municipalities and governs things like water, waste and emergency management.
"I have come to the difficult decision to forego this learning opportunity. I do not wish to be a distraction to the ongoing work at Metro Vancouver," he said in a statement Tuesday.
The controversy around Harvie and his travel as Metro Vancouver chair illustrates an ongoing fracture between the mayor and the six members of Delta city council.
But discord among the group became public in early May, when his council passed seven motions aimed at limiting his influence.
It also removed him as a Delta director to Metro Vancouver, which ultimately means an end to his role as the Metro Vancouver board chair on July 1.
"Over the past months, it has become increasingly apparent that these changes were needed to uphold the interests of Delta taxpayers and ensure proper governance," said Couns. Rod Binder, Daniel Boisvert, Jennifer Johal, and Dylan Kruger in a statement May 6.
Kruger said he was not available to speak to CBC News Wednesday, following Harvie's announcement about cancelling the Amsterdam trip.
Delta's former multi-term mayor, Lois Jackson, told CBC News that she suspected Harvie, who she hired away from Burnaby to be the city's chief administrative officer, was not listening to his councillors and they were sick of it.
"It think it was the biggest swipe they could take at him," she said about ousting him as Metro chair, although he will remain on Metro Vancouver's mayors committee.
"Is it political? Probably. But is it real? You bet," said Jackson.
Harvie's travel costs surpass $32K
New Westminster Coun. Daniel Fontaine said the upcoming trip to the Netherlands that had been planned by Harvie was another example of unnecessary public spending.
He's critical of regional politicians taking tax-payer-funded trips when they are grappling with major cost overruns with a project like the North Shore Wastewater Treatment Plant.
The project could result in households within the North Shore sewerage area being on the hook for hundreds of dollars in additional fees each year for decades.
"Our local and regional taxpayers expect better, and so they should," said Fontaine in a statement.
The airfare for the Netherlands trip was to cost $5,307. So far this year, Harvie's expenses, including the cancelled trip, are $32,852.
In 2023, $17,337 was spent to fly him to a Brisbane conference.
Meanwhile in 2023. the expenses for Metro Vancouver chief administrative officer Jerry Dobrovolny were $37,141, with more than half for travel, training and conferences.
Just Metro business
The regional government defends the spending.
In a statement, a spokesperson said, "Attending out-of-region conferences and study tours is part of Metro Vancouver's Leadership and Engagement program, which was first endorsed by the Metro Vancouver board in 2010.
"All travel aligns with the Board Strategic Plan, and is within the annual budget."
Remuneration bylaws allow board and committee members taking air travel longer than nine hours to travel business or executive class. Metro Vancouver does not pay for spouses to travel with board and committee members.
Delta Coun. Dylan Kruger is one of six Delta councillors who say Mayor George Harvie is not reflecting the collective will of council. (Harman/CBC)
Harvie, who has declined interviews on the matter, said in statements that any furor about his work in Delta and at Metro Vancouver is all politics.
"It was certainly not for lack of representing Delta's interests at Metro or fulfilling my duties as the Mayor or Delta," he said in an email to CBC News on May 8, following his council's uprising.
"It is definitely apparent they have already started the 2026 civic election in Delta."
Former Delta staffer files civil suit
There are other signs of discord in Delta and on council.
In late March, Paramjit Singh Grewal, the general manager of economic development and stakeholder relations in the mayor's office was dismissed.
He has since brought a civil suit seeking damages and alleging defamation in the firing, which court documents claim was done, "without cause and without notice."
The City of Delta and Coun. Dylan Kruger are named as defendants in the suit. Both have filed responses claiming no wrongdoing. None of the claims have been proven in court.
Harvie, in his email from May 8, made reference to the suit and specifically mentioned Kruger.
"I am very disappointed that Council is involved in this legal matter," he went on to write. "I do hope more public information on this matter will be an outcome of the Court process."
WestJet Encore pilots could walk off the job this weekend if an agreement isn’t reached with the airline, after filing a 72-hour strike notice.
The Air Line Pilots Association, Int’l (ALPA), the union representing the pilots, announced the strike notice on Wednesday, saying its members can begin job action on June 1 if the two parties can’t come to terms on a new contract.
WestJet issued an advanced lockout notice to the ALPA on Wednesday afternoon. The airline said a work stoppage could occur as early as 6 p.m. MT on June 1.
The union and the airline resumed bargaining two weeks ago after the pilots rejected a tentative agreement.
ALPA noted that progress has been made, but the two sides are still apart on some of the issues important to the pilots.
“After eight months of negotiating, and a failed (tentative agreement), unfortunately management has not recognized the pilots’ needs. We have expressed to management that we are willing to work with them to further address the issues that clearly remain for our pilots,” said Capt. Carin Kenny, chair of the WestJet Encore ALPA Master Executive Council.
“Until WestJet Encore management negotiates a contract that recognizes the current labour market conditions in Canada’s airline industry, and addresses the needs of our pilots, management will continue to struggle to attract and retain the well-trained, highly skilled pilots required to help our airline be successful.”
In a news release Wednesday, WestJet apologized for the uncertainty the potential work stoppage causes guests and said it is hopeful disruptions can be prevented.
“Our tentative agreement represented a robust negotiation process that got us to our final offer. Given this, over the past two weeks, we have been working diligently to understand where we could better align priorities within the financial framework presented,” said Diederik Pen, president of WestJet Airline and group chief operating officer.
“Unfortunately, given the pace of progress and our steadfast priority to protect the summer travel plans of Canadians, a lockout notice was required to provide certainty for our guests and employees by bringing this to a final resolution.”
WestJet and the ALPA have been negotiating on a new deal since September 2023.
ALPA represents more than 77,000 pilots at 41 Canadian and U.S. airlines.
Mortgage debt grew at its slowest pace in 23 years in February, amid high borrowing costs and reservations related to the Bank of Canada's key interest rate — but the slowdown likely won't last, according to Canada's housing agency.
Canadian mortgage debt totalled $2.16 trillion that month, up 3.4 per cent from the same period last year — a historically low growth rate, according to a report from Canadian Mortgage and Housing Corporation (CMHC).
High interest rates and uncertainty over the central bank's plan to lower its key interest rate led to fewer home sales and softer prices across many regions.
Tu Nguyen, an economist with RSM Canada, says it's not surprising that housing market activity has slowed down.
"Households are really being squeezed by high inflation and high interest rates. It's also a waiting game, as prospective homebuyers are waiting on the sideline for the Bank of Canada to cut rates," she told CBC News.
However, she agrees with the agency's expectation that the slowdown in mortgage growth could be short-lived, with higher home sales and prices forecast in the coming years.
"Once the Bank of Canada begins cutting rates, which is as early as next week, we will see mortgages growing again," she said. The Bank of Canada's next interest rate announcement is on June 5.
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According to the CMHC's report, that anticipated decline in mortgage rates, along with population growth and increases in disposable income after tax and inflation, will likely fuel the turnaround.
"In a context where debt levels have never been so elevated and households are showing increasing warning signs of financial struggle, household debt vulnerability is becoming a primary area of concern," said CMHC deputy chief economist Tania Bourassa-Ochoa in a news release.
"As homeowners find it more difficult to manage their monthly budgets, policymakers and the financial sector are on high alert when considering risks to the financial industry and the economy."
'Noteworthy increases'
The report also said borrowers are continuing to opt for shorter-term, fixed-rate mortgages over traditional five-year fixed terms as they remain uncertain of the short- and medium-term mortgage rate outlook.
That's despite "noteworthy increases" in the discounts being offered by lenders on five-year, fixed-rate mortgages in the first two months of this year, which marked a reversal of the trend from the last half of 2023.
A for-sale sign is posted outside a Toronto home in March 2022. The national mortgage delinquency rate hit 0.17 per cent in the fourth quarter of last year, still near historic lows, but trending up for the first time since the beginning of the pandemic, according to a report. (Evan Mitsui/CBC)
"Lenders are foreseeing potential rate cuts by the [Bank of Canada] occurring sooner than they anticipated last year and are seeking to lock in mortgages at relatively high rates," the report said.
Terms ranging from three years to less than five years remained the most popular choice, representing nearly 40 per cent of all lending for newly extended mortgages in February 2024. Variable-rate mortgages accounted for 15 per cent of all lending for newly extended mortgages.
The report showed the national mortgage delinquency rate hit 0.17 per cent in the fourth quarter of last year, still near historic lows, but trending up for the first time since the beginning of the pandemic.
Low delinquency rates don't necessarily mean that households are in a good spot financially, Nguyen said.
"People pay their mortgages first and foremost. So they pay their mortgages before they pay for anything else, like eating out or sports or vacations."
The report also noted the Big Six banks are taking an increasing share of the market for extended mortgages.
In the fourth quarter of 2023, those banks' share grew 11.8 percentage points from last year, driven by increases in refinances and renewals. Other chartered banks and credit unions recorded decreases of 6.9 and 3.1 percentage points, respectively.
From broken seatbelts to faulty airbags and dysfunctional pedals, it sometimes seems like there's a story about a major vehicle recall every other day.
On Wednesday, Nissan sent out a "do not drive" warning to owners of its 2002-2006 Nissan Sentra, its 2002-2004 Nissan Pathfinder and its 2002-2003 Infiniti QX4 models, a recall that a spokesperson said applies to 48,000 vehicles in Canada.
The spokesperson said the recall was part of an extensive campaign that began in 2017 to communicate the risk of driving vehicles with defective Takata-brand airbag inflators, and to "urge drivers to complete the free recall repair."
A "do not drive" warning means that the car shouldn't be driven until the recall is completed and the defective parts have been replaced.
A Transport Canada recall database shows that there have been over 680 vehicle recalls since the start of 2024, which can include all types of vehicles, from private passenger cars to school buses to heavy duty semi-trailer trucks.
The agency released a report last summer, which found that there were 6.6 million "unsafe" cars travelling on Canadian roads because they had an unresolved safety recall, with older vehicles more likely to fall under that category.
As car technology evolves, the question is whether a recall requires you to take your car in — or, if your model allows, whether you can sit back and let the company update the car remotely.
Here's what you need to know to know about Canada's recall system — and how to ensure that your car isn't overdue for a safety recall.
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A Montreal couple turned to CBC’s Go Public after waiting almost two years for their automaker to fix a vehicle defect that prompted an ‘urgent’ recall.
What is the manufacturer's responsibility?
Under Canadian federal law, manufacturers have to inform car owners of a recall in writing within 60 days after they've identified a defect that could impact a person's safety.
The safety recall notice has to inform the owner of the defect and its possible safety risks, describe how to fix the issue and list any precautions the owner can take to minimize the risk until the fix is complete.
"There are no timeline requirements in the [Motor Vehicle Safety Act] or the regulations for a company to have a solution available when a notice of defect is given," Transport Canada told CBC News in an email.
How do you find out if your car has been recalled?
While it's up to the manufacturer to contact drivers whose vehicles have been recalled, they often don't have up-to-date information, according to Kristine D'Arbelles, the senior director of public affairs at the Canadian Automobile Association (CAA).
"If you look at the Canadian system and how people purchase cars, manufacturers very rarely actually have a customer list because their vehicles are sold through a dealership network, and those dealerships are separate owned companies," said D'Arbelles.
Kia cars are parked on a compound in Wolverton, Ont., about 30 kilometres south of Kitchener. (Mehrdad Nazarahari/CBC)
The other challenge is that Canada has a significant second-hand vehicle market, where people buy from used-car dealerships, or through Kijiji and Facebook Marketplace. That means the name and contact information tied to a vehicle might not be up to date, making it difficult for a manufacturer to reach the car's current owner.
That's part of the reason why CAA has asked Transport Canada to launch a database that would allow drivers to plug in their vehicle identification number (VIN) to search for recalls.
Websites like Carfax Canada offer VIN look-up tools, as do many major auto manufacturers, such as Toyota, Ford and General Motors. Nissan also has a VIN look-up, and it's encouraging the owners of impacted vehicles to use it.
But if you're waiting for a call, it might be a while before you get one. D'Arbelles suggests that drivers regularly check to see if their car has been recalled.
Companies that don't have that specific tool might let you search for your vehicle's make, model and year. But you might get a result that tells you to drive to the nearest dealership to see if your car is impacted.
"That's something that I would not say that someone has to do on a weekly basis or even a monthly basis. Maybe it's every single time you go in for a checkup with your vehicle [or] you get an oil change," D'Arbelles said.
Are recalls becoming more common?
A team that included a University of Waterloo engineering expert compared recall systems in Canada, the U.S. and the U.K., studying whether the increasing dominance of electricity-driven vehicles led to any significant safety recall patterns.
"We saw a clear trend away from recalls due to mechanical failures, to recalls due to software and software defects, and this is absolutely understandable," said Sebastian Fischmeister, a professor in the department of electrical and computer engineering at the University of Waterloo.
"A motor vehicle has around 100 computers in there to control the different vehicle functions. And as we move to more and more automation and autonomy in vehicles, the number of computers or computer functions will drastically increase further.
"The consequence of that is naturally [that] fewer defects are due to mechanical, and more defects are due to software."
Have vehicle recalls changed as car tech evolves?
"While there are different ways to solve recalls or to fix recalls, the system of a recall is still the same," said D'Arbelles. "[It] doesn't matter what type of vehicle — old, new, electric vehicle, hybrid, ICE vehicle — a recall is a recall."
All-electric 2018 Bolt EV cars at electric vehicle charging stations in the GM lot. (Evan Mitsui/CBC)
Some safety recalls might be as simple as the company releasing an over-the-air software update, which is when a manufacturer can update your car's software remotely without any action on the driver's end.
These have become increasingly common since U.S. electric automaker Tesla pioneered them more than a decade ago. The updates typically happen overnight.
However, the average age of the fleet of cars on Canadian roads is 10 years old, according to Statistic Canada's Canadian Vehicle Survey.
"So if you think about that, there are still people driving around with 2014 vehicles," D'Arbelles said. Not all of those cars can perform remote updates.
Other recalls might require a parts replacement, but an ongoing supply shortage is proving a challenge.
"The aftermarket right now on vehicle repairs is still reeling after the pandemic and still having troubles with getting parts on time and still has [a] backlog," said D'Arbelles.
Urban downtowns are sometimes called concrete jungles because the apartments and office buildings that make up skylines from New York to Vancouver are generally made of — what else? — concrete.
But that could change with a push underway to build more tall buildings with another material: mass timber.
Mass timber is an umbrella category of materials made by binding layers of wood together to create larger, stronger elements like panels and beams. Proponents say it's faster and easier to build with than concrete and steel, and less carbon-intensive to boot.
If concrete and steel are the Coke and Pepsi of highrise construction, mass timber has so far been more of a generic-brand cola. Mass timber made up just one per cent of all building construction materials in North America in 2022, according to an RBC report.
But analysts expect the market to rapidly expand in the years ahead, and all across the country, existing mass-timber plants are being expanded and new ones are in the works, from B.C. and Alberta to Ontario and Nova Scotia.
WATCH | Will mass timber mean more homes in Canada's biggest city?
Mass timber construction is on the rise. Could it help the housing crisis?
5 months ago
Duration 5:23
There’s been an increase in large-scale building projects using mass timber, otherwise known as engineered wood. Experts say the material offers several benefits compared to steel and concrete — including sustainability and speed. Talia Ricci explores whether it could be part of a solution to Toronto’s housing crisis.
"The demand is extremely high for mass timber now," said Frank Gannon, director of stakeholder engagement with mass timber manufacturer Western Archrib. He spoke with CBC News inside a new, 155,000 sq. ft. facility the company is building north of Edmonton to keep up with its growing orders.
"We are filling capacity slots about 10 months out from today — so yes, the phone's ringing off the hook."
The industry is getting a boost from new building codes that allow taller mass-timber buildings, and federal and provincial programs and policies that encourage builders to use more of it.
But so far, the uptake of mass timber has been uneven across the country, as some builders remain reluctant to switch from tried-and-true materials to something new.
And while much of the buzz around mass timber comes from its low carbon profile, some experts disagree about how climate-friendly it really is.
Beams and columns, floors and walls
The two most common types of mass timber are glue-laminated timber, or glulam, and cross-laminated timber, or CLT.
Glulam, which has been around since the early 20th century, is used to make beams and columns. CLT panels are a more recent innovation used for floors, roofs and walls.�
Frank Gannon, director of stakeholder engagement with Western Archrib, stands in front of a large beam of glue-laminated timber at the company's plant north of Edmonton. (Paula Duhatschek/CBC)
Taken together, the two materials can serve as an alternative to concrete and steel in a building, said Brian Merwin, senior-vice president with Mercer Mass Timber in Vancouver.
"CLT is the transformational material for tall buildings," he said, adding that most of the material used in highrises is for the floors. "[It's] sort of filled that missing gap to get us to where we are today."
In 2020, the National Building Code of Canada was changed to allow encapsulated mass-timber construction up to 12 storeys. That means mass timber components in these taller buildings have to be covered by a fire-resistant material, like drywall.
Ontario and B.C. have gone further, and will allow up to 18-storey buildings.
Faster and lighter
Building with mass timber carries several advantages, according to structural engineer Robert Malczyk. It's faster to work with than concrete, he said, because panels can be largely prefabricated and assembled on-site.
His own five-storey Vancouver office building, made with mass timber, was erected in 12 days.
A worker at the Mercer Mass Timber factory in Okanagan, B.C., works on a piece of curved, glue-laminated timber. (Submitted by Jenn Kochanski)
"As an owner, I saved a lot in crane time, in closure of the streets time," said Malczyk, principal with the Timber Engineering consulting group.
Mass timber is also relatively light, making it more resilient to earthquakes, he said. Plus, many people simply like the way it looks.
"It has this beautiful calming effect, it's a natural material. We just love to be surrounded by wood."
Proponents of mass-timber construction also point to its environmental advantages.
Wood is a renewable resource, said Mohammad Mohammad, a senior research adviser with Natural Resources Canada, and producing it generates far less carbon compared to steel and concrete.
Robert Malczyk, principal at Vancouver's Timber Engineering Inc., stands inside his mass-timber office building. He says the building took only 12 days to construct. (Dillon Hodgin/CBC News)
At the end of a building's lifespan, he said, wood can also be recycled or reused, rather than being sent to a landfill.
"It has a lot of environmental benefits," said Mohammad, who works with a federal program funding innovative wood-construction projects that is so oversubscribed, its website contains a high-volume notice.
Green claims questioned
Not everyone is ready to throw out their cement mixers and switch to mass timber.
While construction in B.C. and Quebec, for example, has grown thanks to "wood-first" policies in their respective provinces, other provinces remain a bit more hesitant.
Many developers in Alberta, for example, are studying mass timber carefully but haven't yet felt comfortable green-lighting a mass-timber residential building, said Scott Fash, CEO of BILD Alberta.
"I think we're in the phase of exploration and not quite action," he said.
This close-up of a piece of glue-laminated timber shows the multiple layers of lumber that are glued together. (Paula Duhatschek/CBC)
Insurance premiums can also be high for builders working with mass timber, said analyst Sean Steuart, not because it's a more dangerous material but because it's so new.
"It's just not a well established industry, and as such, the insurance-underwriting framework is not as well developed," said Steuart, director of equity research with TD Cowen.
He said there's also a mismatch between supply and demand of mass timber: most demand is coming from Eastern Canada but manufacturing is concentrated in the West, which can drive up shipping costs.
Another risk: not everyone thinks mass timber is as sustainable as it's made out to be, and some experts caution against cutting down more trees to build with more mass timber.
"The most valuable thing we can do with forests is to leave them standing and growing," said Timothy Searchinger, whose work on mass timber has been published in the journal Nature and by the World Resources Institute.
He suggests the world would be better off exploring more low-carbon concrete options instead.
Glue-laminated timber was used for the balconies on New York City's Timber House. Some builders have been reluctant to switch to mass timber from more established materials like steel and concrete. (Brendan McDermid/Reuters)
Faster housing construction?
Mohammad, with Natural Resources Canada, said the vast majority of forests harvested in Canada are sustainable, and that usually more than one tree is planted for every one that's cut.
As Canada attempts to rapidly ramp up housing construction in the years ahead, he believes mass timber will play an important role in the overall mix of construction materials — especially in Northern communities, where concrete can be prohibitively expensive and hard to ship.
"[You can] basically establish a new housing development within weeks or months," he said.
"Now that we are able to go taller and larger with mass timber, it's just adding another construction system, another tool to our toolbox."
Rick Jeffery, CEO of the Canadian Wood Council, doesn't see a scenario where mass timber fully replaces concrete and steel. He also pointed out that it's not common for buildings to be made of mass timber alone: typically they're made of some mix of the three materials.
But he believes mass timber will be used much more often as Canada aims to build its way out of the housing crisis (a goal that will require another 3.5 million homes by decade's end).
"We see there's a big opportunity on that residential side."
