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Economy

Strong job numbers belie the economy's negative narrative, but they're still nice to see – Financial Post

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Ahead of this week’s Bank of Canada decision on interest rates, I read lots of notes advising me that a cut was needed because economic growth had stalled in the fourth quarter, meaning there was no momentum with which to confront the headwinds coming from COVID-19.

They made sense, and the central bank clearly agreed, since it decided to slash its benchmark rate by a half-point.

But indicators of resiliency aren’t always treated the same way. On March 6, I read notes that advised readers to ignore the labour market’s latest show of strength because the data are based on a survey from early February, before the coronavirus became a present danger to the North American outlook.

There isn’t a big market for evidence of potential resilience right now. The narrative is a negative one, and positive indicators are easily discounted. In this environment, stagnant gross domestic product three months ago is more meaningful to some people than evidence of brisk hiring about three weeks ago.

“Canada ended the last of the pre-virus jobs reports with a flourish, as a strong month for employment and a healthy wage gain showed that everything was fine in the labour market … then,” Avery Shenfeld, chief economist at CIBC World Markets Inc., said after Statistics Canada reported the economy added about 30,000 jobs in February.

There is every reason to think that hiring will slow, and probably even decline in the months ahead as the coronavirus spreads in Canada.

Web Summit Intelligence Ltd., which organizes the annual Collision technology conference, on March 6 said this year’s event, scheduled for Toronto in June, will instead be held online. Hosting a massive gathering in the cloud is creative, but it requires fewer support workers. The cancellation will rob the city’s hotels and restaurants of thousands of visitors, and kill the sort of networking that leads to promotions and higher salaries.

There will be more announcements like that one, maybe many more. But at least they will pare Canadian employment from a high level. The employment rate of Canadians aged 25 to 54 first cleared 83 per cent in October 2018 and it hasn’t fallen below that mark since. The youth participation rate — workers aged 15 to 24 — is hovering around 65 per cent, the highest since 2011. The monthly Labour Force Survey’s measure of average hourly wages increased about four per cent from the previous year for the ninth consecutive time in February. That’s roughly twice the rate of inflation and the strongest in more than a decade.

“Canada’s labour market seems to be holding up well despite lingering headwinds and growing concerns about the coronavirus,” said Arlene Kish, director of Canadian economics at IHS Markit, a data and research firm.

Bank of Canada Governor Stephen Poloz also made that point this week when he spoke at an event in Toronto. His thoughts on the coronavirus got most of the attention, but the bulk of his speech was about the surprising strength of the labour market given all that has afflicted the Canadian economy in recent years. There are weak spots, particularly Alberta, which is still struggling to recover from the collapse of oil prices at the end of 2014. But “when you look at all the indicators, you can see that the labour market has been, and continues to be, a source of resilience for the Canadian economy,” Poloz said. “A solid, secure job is the primary bases for consumer confidence and household spending, which is the primary engine of the growth of any economy.”

Other indicators are less robust. GDP grew at an annual rate of only 0.3 per cent in the fourth quarter. The central bank predicted that outcome, but mixed up the reasons for it. Policy-makers assumed household debt would slow domestic spending, while exports and business investment would improve with the calming of the trade wars. Instead, trade remains a drag on growth.

Statistics Canada on March 6 also reported that non-energy merchandise exports dropped 2.1 per cent in January from December, the fourth decline in five months. Imports of industrial machinery and equipment, a proxy for business investment, increased one per cent, only the third monthly gain since January 2019. “Business investment does not appear to be recovering as was expected following positive trade policy developments,” the Bank of Canada said when it cut interest rates this week.

Fortunately, consumer spending rebounded from a sluggish third quarter, as wages and employment powered through the trade headwinds. The latest hiring numbers suggest momentum continued into the new year. Technology companies are rapidly expanding, driving strong local economies in the biggest cities. Quebec’s jobless rate in February plunged to 4.5 per cent, by far the lowest on records that date to the mid-1970s.

Finance Minister Bill Morneau on March 6 told an audience in Toronto that he was prepared to do what it takes to prop up the economy through the COVID-19 crisis. There’s nothing he can do to spur demand for exports, and business investment will remain limp until the horizon clears. But fiscal policy can easily and quickly replace lost income or backstop smaller companies that might otherwise be forced to fire people for lack of business. Domestic demand powered Canada’s economy through much of last year, and it probably could continue to do so if backed by fiscal stimulus and lower interest rates.

Yes, pre-virus hiring is “old news,” but very good news all the same.

Financial Post

• Email: kcarmichael@nationalpost.com | Twitter:

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Business

A timeline of events in the bread price-fixing scandal

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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)

The Canadian Press. All rights reserved.

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Economy

S&P/TSX composite up more than 250 points, U.S. stock markets also higher

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TORONTO – Canada’s main stock index was up more than 250 points in late-morning trading, led by strength in the base metal and technology sectors, while U.S. stock markets also charged higher.

The S&P/TSX composite index was up 254.62 points at 23,847.22.

In New York, the Dow Jones industrial average was up 432.77 points at 41,935.87. The S&P 500 index was up 96.38 points at 5,714.64, while the Nasdaq composite was up 486.12 points at 18,059.42.

The Canadian dollar traded for 73.68 cents US compared with 73.58 cents US on Thursday.

The November crude oil contract was up 89 cents at US$70.77 per barrel and the October natural gas contract was down a penny at US2.27 per mmBTU.

The December gold contract was up US$9.40 at US$2,608.00 an ounce and the December copper contract was up four cents at US$4.33 a pound.

This report by The Canadian Press was first published Sept. 19, 2024.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

The Canadian Press. All rights reserved.

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Construction wraps on indoor supervised site for people who inhale drugs in Vancouver

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VANCOUVER – Supervised injection sites are saving the lives of drug users everyday, but the same support is not being offered to people who inhale illicit drugs, the head of the BC Centre for Excellence in HIV/AIDS says.

Dr. Julio Montaner said the construction of Vancouver’s first indoor supervised site for people who inhale drugs comes as the percentage of people who die from smoking drugs continues to climb.

The location in the Downtown Eastside at the Hope to Health Research and Innovation Centre was unveiled Wednesday after construction was complete, and Montaner said people could start using the specialized rooms in a matter of weeks after final approvals from the city and federal government.

“If we don’t create mechanisms for these individuals to be able to use safely and engage with the medical system, and generate points of entry into the medical system, we will never be able to solve the problem,” he said.

“Now, I’m not here to tell you that we will fix it tomorrow, but denying it or ignoring it, or throw it under the bus, or under the carpet is no way to fix it, so we need to take proactive action.”

Nearly two-thirds of overdose deaths in British Columbia in 2023 came after smoking illicit drugs, yet only 40 per cent of supervised consumption sites in the province offer a safe place to smoke, often outdoors, in a tent.

The centre has been running a supervised injection site for years which sees more than a thousand people monthly and last month resuscitated five people who were overdosing.

The new facilities offer indoor, individual, negative-pressure rooms that allow fresh air to circulate and can clear out smoke in 30 to 60 seconds while users are monitored by trained nurses.

Advocates calling for more supervised inhalation sites have previously said the rules for setting up sites are overly complicated at a time when the province is facing an overdose crisis.

More than 15,000 people have died of overdoses since the public health emergency was declared in B.C. in April 2016.

Kate Salters, a senior researcher at the centre, said they worked with mechanical and chemical engineers to make sure the site is up to code and abidies by the highest standard of occupational health and safety.

“This is just another tool in our tool box to make sure that we’re offering life-saving services to those who are using drugs,” she said.

Montaner acknowledged the process to get the site up and running took “an inordinate amount of time,” but said the centre worked hard to follow all regulations.

“We feel that doing this right, with appropriate scientific background, in a medically supervised environment, etc, etc, allows us to derive the data that ultimately will be sufficiently convincing for not just our leaders, but also the leaders across the country and across the world, to embrace the strategies that we are trying to develop.” he said.

Montaner said building the facility was possible thanks to a single $4-million donation from a longtime supporter.

Construction finished with less than a week before the launch of the next provincial election campaign and within a year of the next federal election.

Montaner said he is concerned about “some of the things that have been said publicly by some of the political leaders in the province and in the country.”

“We want to bring awareness to the people that this is a serious undertaking. This is a very massive investment, and we need to protect it for the benefit of people who are unfortunately drug dependent.” he said.

This report by The Canadian Press was first published Sept. 18, 2024.

The Canadian Press. All rights reserved.

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