TORONTO – The leaders of Canada’s top banks believe an economic rebound is on the horizon, but say the short-term looks difficult and spending won’t truly pick up until the back half of 2021 or even 2022.
The chief executives of the country’s most prominent banks think Canada is benefiting from generous government relief packages that reduced delinquencies and insolvencies and the arrival of several promising COVID-19 vaccines.
However, they say the coming weeks don’t look pretty because growing numbers of Canadians are continuing to contract the virus.
“In the short-term things are going to be not as good as one might have hoped, but overall I think we are in a probably slow way of getting more positive as the year goes by,” TD chief executive Bharat Masrani said Monday.
Masrani made his comments during a virtual appearance at Royal Bank of Canada’s Canadian Bank CEO conference, which saw the CEOs of all of the country’s top banks offer their economic predictions for the year.
They all agreed that Canada is in the midst of an economic rebound, but how fast that recovery takes hold will depend on the country’s ability to get the pandemic under control.
Vaccines will be key, they said.
“We believe roughly four and 4.5 million high-risk Canadians will have to be vaccinated before we can really get back to reopening the economy and we can achieve that within 100 days, if we have the vaccines,” Royal Bank of Canada chief executive Dave McKay said.
The number of doses of COVID-19 vaccines administered in Canada hit 319,938 on Monday. Efforts to get more shots in arms are ramping up as more supply arrives, but there are at least 38 million people living in the country.
Once people are vaccinated, McKay believes those who have been sitting on cash and not spending it because so many things are closed will race back to pastimes like travel and entertainment.
But timing around when that will happen is still a big question.
Most businesses in provinces like Ontario remain closed and Quebec has gone as far as implementing a curfew to curtail cases. Some public health advocates and politicians are calling for similar measures to be implemented elsewhere.
Victor Dodig, Canadian Imperial Bank of Commerce’s chief executive, believes a rebound will be slow to materialize in the hospitality sector and others considered to be “discretionary.”
“We are looking into the following fiscal year before you are seeing any robustness there,” he said.
Masrani thinks some consumers will encounter credit trouble in the later half of 2021 or even into 2022, so he’s baking negativity into TD’s economic models.
While Darryl White, Bank of Montreal’s chief executive, said he expects the next two to four months to be a “difficult” period, he has seen some positives.
“We are just not seeing the impaired losses coming in at the rate people would have expected,” he said.
Rent relief, mortgage deferrals and wage subsidies have helped many Canadians manage the crisis and banks have built up large reserves to take care of bad loans that may transpire, he said.
For a rebound to really take shape, McKay believes government relief will have to continue and become focused on areas of the economy that are expected to take longer to recover like small businesses, hospitality businesses and transportation companies.
When a rebound comes, so will change at banks.
Dodig has noticed people shift rapidly to online banking during the pandemic and even those who were using digital options before the virus began circulating are moving more of their transactions online.
CIBC recently transformed 250 or one quarter of its banking centres into advice centres because digitization was accelerated by the health crisis, he said.
McKay said that many bank branches have been temporarily closed or operating with reduced hours throughout the pandemic.
RBC has closed some branches and McKay expects to pare back another three or four per cent over the coming year, he said.
That equates to between 30 and 50 branches, according to McKay.
He believes branch footprints can be reduced and the bank can get more flexibility by focusing on shorter leases, but how it should approach branches will depend on the recovery.
“Everything is positioned to watch how clients come back and how they use the branch,” he said.
“A lot of client activity still goes through our branches, but we will see what sticks with consumers and what changes through all of this.”
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.
