A man shops at Iqbal Halal grocery store, in Toronto, May 7.Christopher Katsarov/The Globe and Mail
Canadian inflation hit a three-decade high in November as the economy now deals with rapidly increasing infections tied to the Omicron variant of COVID-19, threatening to exacerbate supply disruptions that have pushed up prices and become a top concern for households.
The consumer price index (CPI) rose 4.7 per cent in November from a year earlier, matching October’s rate, which was the highest in 18 years, Statistics Canada said Wednesday. However, at the second decimal place, inflation of 4.72 per cent was the highest since September, 1991.
The result met expectations on Bay Street. Excluding gasoline, inflation held steady at 3.6 per cent. Prices rose in all eight major components of CPI, paced by transportation costs. Inflation has exceeded the Bank of Canada’s target range of 1 to 3 per cent since April.
Nearly two years into the COVID-19 pandemic, inflation is perhaps the hottest topic of discussion – and debate – in the field of economics. The U.S. and Europe are similarly dealing with their loftiest price increases in decades, piling pressure on policy-makers to respond.
The Bank of Canada has long maintained that steeper inflation is largely driven by temporary factors related to COVID-19, such as supply-chain issues. However, bank officials have acknowledged that supply woes are dragging on longer than expected. Now, the Omicron variant – which has already led to travel restrictions – poses another threat to supply chains.
“Worries about Omicron have contributed to lower oil prices, but beyond that the restrictions on mobility necessary to fight the rapidly-spreading variant will do little to help on the inflation front and may exacerbate price pressures in some areas,” James Marple, senior economist at Toronto-Dominion Bank, wrote in a note to clients.
“Supply chain disruptions are likely to be prolonged. Demand may take a hit, but with people staying home, it will be redirected toward goods, keeping upward pressure on already-elevated prices.”
Wednesday’s report showed price pressures on a number of fronts. Notably, inflation has accelerated for groceries, reaching 4.7 per cent in November (from October’s 3.9 per cent). It was the largest annual increase since the outset of 2015. Prices for fresh or frozen beef rose 15.4 per cent, owing to drought conditions that made it more expensive to feed livestock.
Statscan on Wednesday noted that inflation is running higher than average wage growth, which means the purchasing power of Canadians has diminished.
As inflation persists, the messaging at central banks has shifted.
The Bank of Canada dropped a reference to inflationary pressures being temporary in last week’s rate decision, which kept its benchmark lending rate at 0.25 per cent. Similarly, U.S. Federal Reserve chair Jerome Powell recently said it was time to retire “transitory” as a description of high inflation, because it has “different meanings to different people.”
Regardless, the Bank of Canada still expects inflation to ease in 2022, ebbing to around 2 per cent by the end of the year. It has signalled rate hikes could start as early as April.
Bank officials have said they’re watching for signs that lofty inflation becomes entrenched.
“If supply disruptions and related cost pressures persist for longer than expected and strong goods demand continues, this would increase the likelihood of inflation remaining above our control range,” deputy governor Toni Gravelle explained in a speech last week.
“This could feed into inflation expectations and contribute to wage pressures, leading to a second round of price increases,” he added.
Mr. Gravelle was alluding to a wage-price spiral. In that scenario, workers demand higher wages to counteract price increases. Faced with higher labour costs, companies raise prices to protect their margins. Then, workers push for higher wages again, creating a vicious cycle.
Despite those concerns, bank officials say inflation expectations aren’t troubling over the mid- to long-term, based on surveys of businesses and consumers.
There are, however, signs of pressure in the short term. Small businesses plan to raise prices by an average of 4.3 per cent over the next year, the highest in more than a decade of records, according to survey results from the Canadian Federation of Independent Business. Nearly one-third of companies are planning to hike prices by 6 per cent or more.
Canada’s inflation rate hit 4.4 per cent in September. Personal finance columnist Rob Carrick answers questions about some of the factors driving inflation and how people can reduce its impact on their household budget.
Your time is valuable. Have the Top Business Headlines newsletter conveniently delivered to your inbox in the morning or evening. Sign up today.
TORONTO – Canada Goose Holdings Inc. says it has signed a deal that will result in the creation of its first eyewear collection.
The deal announced on Thursday by the Toronto-based luxury apparel company comes in the form of an exclusive, long-term global licensing agreement with Marchon Eyewear Inc.
The terms and value of the agreement were not disclosed, but Marchon produces eyewear for brands including Lacoste, Nike, Calvin Klein, Ferragamo, Longchamp and Zeiss.
Marchon plans to roll out both sunglasses and optical wear under the Canada Goose name next spring, starting in North America.
Canada Goose says the eyewear will be sold through optical retailers, department stores, Canada Goose shops and its website.
Canada Goose CEO Dani Reiss told The Canadian Press in August that he envisioned his company eventually expanding into eyewear and luggage.
This report by The Canadian Press was first published Sept. 19, 2024.
Almost seven years since news broke of an alleged conspiracy to fix the price of packaged bread across Canada, the saga isn’t over: the Competition Bureau continues to investigate the companies that may have been involved, and two class-action lawsuits continue to work their way through the courts.
Here’s a timeline of key events in the bread price-fixing case.
Oct. 31, 2017: The Competition Bureau says it’s investigating allegations of bread price-fixing and that it was granted search warrants in the case. Several grocers confirm they are co-operating in the probe.
Dec. 19, 2017: Loblaw and George Weston say they participated in an “industry-wide price-fixing arrangement” to raise the price of packaged bread. The companies say they have been co-operating in the Competition Bureau’s investigation since March 2015, when they self-reported to the bureau upon discovering anti-competitive behaviour, and are receiving immunity from prosecution. They announce they are offering $25 gift cards to customers amid the ongoing investigation into alleged bread price-fixing.
Jan. 31, 2018: In court documents, the Competition Bureau says at least $1.50 was added to the price of a loaf of bread between about 2001 and 2016.
Dec. 20, 2019: A class-action lawsuit in a Quebec court against multiple grocers and food companies is certified against a number of companies allegedly involved in bread price-fixing, including Loblaw, George Weston, Metro, Sobeys, Walmart Canada, Canada Bread and Giant Tiger (which have all denied involvement, except for Loblaw and George Weston, which later settled with the plaintiffs).
Dec. 31, 2021: A class-action lawsuit in an Ontario court covering all Canadian residents except those in Quebec who bought packaged bread from a company named in the suit is certified against roughly the same group of companies.
June 21, 2023: Bakery giant Canada Bread Co. is fined $50 million after pleading guilty to four counts of price-fixing under the Competition Act as part of the Competition Bureau’s ongoing investigation.
Oct. 25 2023: Canada Bread files a statement of defence in the Ontario class action denying participating in the alleged conspiracy and saying any anti-competitive behaviour it participated in was at the direction and to the benefit of its then-majority owner Maple Leaf Foods, which is not a defendant in the case (neither is its current owner Grupo Bimbo). Maple Leaf calls Canada Bread’s accusations “baseless.”
Dec. 20, 2023: Metro files new documents in the Ontario class action accusing Loblaw and its parent company George Weston of conspiring to implicate it in the alleged scheme, denying involvement. Sobeys has made a similar claim. The two companies deny the allegations.
July 25, 2024: Loblaw and George Weston say they agreed to pay a combined $500 million to settle both the Ontario and Quebec class-action lawsuits. Loblaw’s share of the settlement includes a $96-million credit for the gift cards it gave out years earlier.
Sept. 12, 2024: Canada Bread files new documents in Ontario court as part of the class action, claiming Maple Leaf used it as a “shield” to avoid liability in the alleged scheme. Maple Leaf was a majority shareholder of Canada Bread until 2014, and the company claims it’s liable for any price-fixing activity. Maple Leaf refutes the claims.
This report by The Canadian Press was first published Sept. 19, 2024.
Companies in this story: (TSX:L, TSX:MFI, TSX:MRU, TSX:EMP.A, TSX:WN)
TORONTO – TD Bank Group, which is mired in a money laundering scandal in the U.S., says chief executive Bharat Masrani will retire next year.
Masrani, who will retire officially on April 10, 2025, says the bank’s, “anti-money laundering challenges,” took place on his watch and he takes full responsibility.
The bank named Raymond Chun, TD’s group head, Canadian personal banking, as his successor.
As part of a transition plan, Chun will become chief operating officer on Nov. 1 before taking over the top job when Masrani steps down at the bank’s annual meeting next year.
TD also announced that Riaz Ahmed, group head, wholesale banking and president and CEO of TD Securities, will retire at the end of January 2025.
TD has taken billions in charges related to ongoing U.S. investigations into the failure of its anti-money laundering program.
This report by The Canadian Press was first published Sept. 19, 2024.
:format(jpeg)/cloudfront-us-east-1.images.arcpublishing.com/tgam/LUG36ULRYJFPPAOCVZP754DH4Y.JPG)
