Blockades that have crippled Canada’s rail network over the past few weeks are already proving a bigger hit on the economy than the CN strike in November, economists say.
Protesters have blocked rail lines across the country in support of the Wet’suwet’en opposition to the Coastal GasLink pipeline project in B.C. The most disruptive has been a blockade set up Feb. 6 on the Quebec to Windsor line near Belleville, Ont. which shut down CN’s eastern freight network and Via Rail’s passenger service.
Rail freight data for last week showed that traffic fell 18%, compared to the week before the blockades began, said Capital Economics senior Canada economist Stephen Brown. Since CN only completely shut down its eastern network at the end of last week, rail freight probably fell further this week.
The disruption has led to shortages of fuel and other supplies across the country, ramping up the pressure on the Canadian government to resolve the crisis. But even if the blockades are lifted in the next few days and rail service returns to normal, Capital estimates freight traffic will be down 10% to 15% in February.
During the week-long CN Rail strike in November freight declined by just 0.9%, with a total hit to the economy of about 0.1%. The blockades, on the other hand, could shave 0.25% off February’s GDP and Capital is cutting its forecast for the first quarter from 1.8% to 1.5% growth.
Is this likely to influence the Bank of Canada? “Given the temporary nature of disruption, the blockades are unlikely to tip the scales toward an interest rate cut unless they last much longer,” said Brown.
Hard to call that one.
Here’s what you need to know this morning:
Natural Resources Minister Seamus O’Regan will be at the Emera Innovation Exchange in St. John’s, N.L., to announce an important investment from the Ocean Supercluster as part of the Innovation Superclusters Initiative
Foreign Affairs Minister Francois-Philippe Champagne to deliver speech to Montreal Council on Foreign Relations CRTC hearings on mobile wireless services.
Notable Earnings: Royal Bank of Canada, Teck Resources, Home Capital Group, Magna International, Canfor, Deere & Co.
Today’s Data: Canadian retail sales, U.S. existing home sales
Victoria remains the only housing market in Canada flashing high vulnerability, according to the Canada Mortgage and Housing Corp. In its quarterly report card yesterday, the CMHC cut the vulnerability rating of four prairie cities, Edmonton, Calgary, Saskatoon and Winnipeg, from moderate to low. In Victoria, however, home prices continue to rise faster than the economy and population growth can explain. Toronto is also seeing higher prices, but here the rise is in line with the economic and demographic fundamentals.
TORONTO – Strength in the base metal and technology sectors helped Canada’s main stock index gain almost 100 points on Friday, while U.S. stock markets also climbed higher.
The S&P/TSX composite index closed up 93.51 points at 23,568.65.
In New York, the Dow Jones industrial average was up 297.01 points at 41,393.78. The S&P 500 index was up 30.26 points at 5,626.02, while the Nasdaq composite was up 114.30 points at 17,683.98.
The Canadian dollar traded for 73.61 cents US compared with 73.58 cents US on Thursday.
The October crude oil contract was down 32 cents at US$68.65 per barrel and the October natural gas contract was down five cents at US$2.31 per mmBTU.
The December gold contract was up US$30.10 at US$2,610.70 an ounce and the December copper contract was up four cents US$4.24 a pound.
This report by The Canadian Press was first published Sept. 13, 2024.
OTTAWA – Statistics Canada says wholesale sales, excluding petroleum, petroleum products, and other hydrocarbons and excluding oilseed and grain, rose 0.4 per cent to $82.7 billion in July.
The increase came as sales in the miscellaneous subsector gained three per cent to reach $10.5 billion in July, helped by strength in the agriculture supplies industry group, which rose 9.2 per cent.
The food, beverage and tobacco subsector added 1.7 per cent to total $15 billion in July.
The personal and household goods subsector fell 2.5 per cent to $12.1 billion.
In volume terms, overall wholesale sales rose 0.5 per cent in July.
Statistics Canada started including oilseed and grain as well as the petroleum and petroleum products subsector as part of wholesale trade last year, but is excluding the data from monthly analysis until there is enough historical data.
This report by The Canadian Press was first published Sept. 13, 2024.
TORONTO – Canada’s main stock index was up more than 150 points in late-morning trading, helped by strength in the base metal and energy sectors, while U.S. stock markets were mixed.
The S&P/TSX composite index was up 172.18 points at 23,383.35.
In New York, the Dow Jones industrial average was down 34.99 points at 40,826.72. The S&P 500 index was up 10.56 points at 5,564.69, while the Nasdaq composite was up 74.84 points at 17,470.37.
The Canadian dollar traded for 73.55 cents US compared with 73.59 cents US on Wednesday.
The October crude oil contract was up $2.00 at US$69.31 per barrel and the October natural gas contract was up five cents at US$2.32 per mmBTU.
The December gold contract was up US$40.00 at US$2,582.40 an ounce and the December copper contract was up six cents at US$4.20 a pound.
This report by The Canadian Press was first published Sept. 12, 2024.
