Alberta sees highest energy price increases as Canada's inflation climbs to 4% | Canada News Media
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Alberta sees highest energy price increases as Canada’s inflation climbs to 4%

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Canada’s inflation rate once again climbed in August, prompting some Calgarians to make tough decisions about their spending.

“It’s stressful, right? Like I have a wife looking to have children in the near future but it’s almost, it’s off-putting to want to have children because how am I going to provide for them?” Craig Steward said.

John Burley added, “It’s just about trying to make ends meet for the budget and trying to pick and choose what you do, like no sports activities or less Flames games, less doing things out on date night, things like that.”

Canada’s inflation rate rose to four per cent in August from 3.3 per cent in July.

Gas prices are driving the increase, rising 0.8 per cent from last August — the first yearly increase since January.

“Oil prices increased in August to over $80 a barrel, and we haven’t seen it reach that level since last year, so it’s a pretty big change over the lower prices that we previously saw, and that’s entirely the reason for the increase,” said Trevor Tombe, economics professor at the University of Calgary.

Alberta’s inflation rate is even higher than the national average at 4.3 per cent.

Energy prices also increased the most in Alberta, going up just over 13 per cent year-over-year in August, following a nearly eight per cent drop in July.

Tombe, however, says not to read too much into that.

“The price of many energy products in Alberta is lower than what we see elsewhere. It’s even lower now in August this year — if you look just at gasoline alone — it’s lower here than it was last August,” he said.

But Tombe says electricity is the exception.

According to Statistics Canada, electricity prices rose almost 122 per cent in Alberta this August compared to last, following a large price increase in July.

The end of the province’s electricity rebate program is a big part of that.

Nathan Neudorf, Alberta’s minister of affordability and utilities, says he recognizes that the benefit of high oil prices needs to be passed down from the government to all Albertans.

“Making sure that affordability and the cost of living, key input costs like utilities, are managed and brought down to their lowest, most competitive level and that’s what what we’re going to do to make sure Albertans see the benefit of that,” he said.

Deborah Yedlin, president and CEO of the Calgary Chamber of Commerce, wants affordability measures like electricity rebates and the gas tax suspension to continue.

“There’s a bigger bite being taken out of consumers’ pocketbooks, and so they’re going to think about where they allocate their capital, where they’re going to spend their money and you know, that’s businesses that are going to be affected by that,” she said.

For Bank of Canada watchers, Tombe says this latest data is somewhat concerning since the main core measures of three-month average inflation, which is what the central bank looks at when setting interest rates, all rose above four per cent for the first time since last year.

“But I think it might be too early at this point to judge whether any further interest rate increases are on the horizon,” he said.

 

The Bank of Canada will make its next interest rate decision on Oct. 25.

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Japan’s SoftBank returns to profit after gains at Vision Fund and other investments

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TOKYO (AP) — Japanese technology group SoftBank swung back to profitability in the July-September quarter, boosted by positive results in its Vision Fund investments.

Tokyo-based SoftBank Group Corp. reported Tuesday a fiscal second quarter profit of nearly 1.18 trillion yen ($7.7 billion), compared with a 931 billion yen loss in the year-earlier period.

Quarterly sales edged up about 6% to nearly 1.77 trillion yen ($11.5 billion).

SoftBank credited income from royalties and licensing related to its holdings in Arm, a computer chip-designing company, whose business spans smartphones, data centers, networking equipment, automotive, consumer electronic devices, and AI applications.

The results were also helped by the absence of losses related to SoftBank’s investment in office-space sharing venture WeWork, which hit the previous fiscal year.

WeWork, which filed for Chapter 11 bankruptcy protection in 2023, emerged from Chapter 11 in June.

SoftBank has benefitted in recent months from rising share prices in some investment, such as U.S.-based e-commerce company Coupang, Chinese mobility provider DiDi Global and Bytedance, the Chinese developer of TikTok.

SoftBank’s financial results tend to swing wildly, partly because of its sprawling investment portfolio that includes search engine Yahoo, Chinese retailer Alibaba, and artificial intelligence company Nvidia.

SoftBank makes investments in a variety of companies that it groups together in a series of Vision Funds.

The company’s founder, Masayoshi Son, is a pioneer in technology investment in Japan. SoftBank Group does not give earnings forecasts.

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Yuri Kageyama is on X:

The Canadian Press. All rights reserved.

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Trump campaign promises unlikely to harm entrepreneurship: Shopify CFO

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Shopify Inc. executives brushed off concerns that incoming U.S. President Donald Trump will be a major detriment to many of the company’s merchants.

“There’s nothing in what we’ve heard from Trump, nor would there have been anything from (Democratic candidate) Kamala (Harris), which we think impacts the overall state of new business formation and entrepreneurship,” Shopify’s chief financial officer Jeff Hoffmeister told analysts on a call Tuesday.

“We still feel really good about all the merchants out there, all the entrepreneurs that want to start new businesses and that’s obviously not going to change with the administration.”

Hoffmeister’s comments come a week after Trump, a Republican businessman, trounced Harris in an election that will soon return him to the Oval Office.

On the campaign trail, he threatened to impose tariffs of 60 per cent on imports from China and roughly 10 per cent to 20 per cent on goods from all other countries.

If the president-elect makes good on the promise, many worry the cost of operating will soar for companies, including customers of Shopify, which sells e-commerce software to small businesses but also brands as big as Kylie Cosmetics and Victoria’s Secret.

These merchants may feel they have no choice but to pass on the increases to customers, perhaps sparking more inflation.

If Trump’s tariffs do come to fruition, Shopify’s president Harley Finkelstein pointed out China is “not a huge area” for Shopify.

However, “we can’t anticipate what every presidential administration is going to do,” he cautioned.

He likened the uncertainty facing the business community to the COVID-19 pandemic where Shopify had to help companies migrate online.

“Our job is no matter what comes the way of our merchants, we provide them with tools and service and support for them to navigate it really well,” he said.

Finkelstein was questioned about the forthcoming U.S. leadership change on a call meant to delve into Shopify’s latest earnings, which sent shares soaring 27 per cent to $158.63 shortly after Tuesday’s market open.

The Ottawa-based company, which keeps its books in U.S. dollars, reported US$828 million in net income for its third quarter, up from US$718 million in the same quarter last year, as its revenue rose 26 per cent.

Revenue for the period ended Sept. 30 totalled US$2.16 billion, up from US$1.71 billion a year earlier.

Subscription solutions revenue reached US$610 million, up from US$486 million in the same quarter last year.

Merchant solutions revenue amounted to US$1.55 billion, up from US$1.23 billion.

Shopify’s net income excluding the impact of equity investments totalled US$344 million for the quarter, up from US$173 million in the same quarter last year.

Daniel Chan, a TD Cowen analyst, said the results show Shopify has a leadership position in the e-commerce world and “a continued ability to gain market share.”

In its outlook for its fourth quarter of 2024, the company said it expects revenue to grow at a mid-to-high-twenties percentage rate on a year-over-year basis.

“Q4 guidance suggests Shopify will finish the year strong, with better-than-expected revenue growth and operating margin,” Chan pointed out in a note to investors.

This report by The Canadian Press was first published Nov. 12, 2024.

Companies in this story: (TSX:SHOP)

The Canadian Press. All rights reserved.

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RioCan cuts nearly 10 per cent staff in efficiency push as condo market slows

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TORONTO – RioCan Real Estate Investment Trust says it has cut almost 10 per cent of its staff as it deals with a slowdown in the condo market and overall pushes for greater efficiency.

The company says the cuts, which amount to around 60 employees based on its last annual filing, will mean about $9 million in restructuring charges and should translate to about $8 million in annualized cash savings.

The job cuts come as RioCan and others scale back condo development plans as the market softens, but chief executive Jonathan Gitlin says the reductions were from a companywide efficiency effort.

RioCan says it doesn’t plan to start any new construction of mixed-use properties this year and well into 2025 as it adjusts to the shifting market demand.

The company reported a net income of $96.9 million in the third quarter, up from a loss of $73.5 million last year, as it saw a $159 million boost from a favourable change in the fair value of investment properties.

RioCan reported what it says is a record-breaking 97.8 per cent occupancy rate in the quarter including retail committed occupancy of 98.6 per cent.

This report by The Canadian Press was first published Nov. 12, 2024.

Companies in this story: (TSX:REI.UN)

The Canadian Press. All rights reserved.

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