Alberta towns, villages and cities push for tabulator option in local votes

TORONTO – Canada’s main stock index closed above 24,000 for the first time Thursday as strength in base metals and other sectors outweighed losses in energy, while U.S. markets also rose and the S&P 500 notched another record as well.

“Another day, another record,” said Angelo Kourkafas, senior investment strategist at Edward Jones.

“The path of least resistance continues to be higher.”

The S&P/TSX composite index closed up 127.95 points at 24,033.83.

In New York, the Dow Jones industrial average was up 260.36 points at 42,175.11. The S&P 500 index was up 23.11 points at 5,745.37, while the Nasdaq composite was up 108.09 points at 18,190.29.

Markets continue to be optimistic about an economic soft landing, said Kourkafas, after the U.S. Federal Reserve last week announced an outsized cut to its key interest rate following months of speculation about when it would start easing policy.

Economic data Thursday added to the story that the U.S. economy remains resilient despite higher rates, said Kourkafas.

The U.S. economy grew at a three-per-cent annual rate in the second quarter, one report said, picking up from the first quarter of the year. Another report showed fewer U.S. workers applied for unemployment benefits last week.

The data shows “the economy remains on strong footing while the Fed is pivoting now in a decisive way towards an easier policy,” said Kourkafas.

The Fed’s decisive move gave investors more reason to believe that a soft landing is still the “base case scenario,” he said, “and likely reduces the downside risks for a recession by having the Fed moving too late or falling behind the curve.”

North of the border, the TSX usually gets a boost from Wall St. strength, said Kourkafas, but on Thursday the index also reflected some optimism of its own as the Bank of Canada has already cut rates three times to address weakening in the economy.

“The Bank of Canada likely now will be emboldened by the Fed,” he said.

“They didn’t want to move too far ahead of the Fed, and now that the Fed moved in a bigger-than-expected way, that provides more room for the Bank of Canada to cut as aggressively as needed to support the economy, given that inflation is within the target range.”

The TSX has also been benefiting from strength in materials after China’s central bank announced several measures meant to support the company’s economy, said Kourkafas.

However, energy stocks dragged on the Canadian index as oil prices fell Thursday following a report that Saudi Arabia was preparing to abandon its unofficial US$100-per-barrel price target for crude as it prepares to increase its output.

The Canadian dollar traded for 74.22 cents US compared with 74.28 cents US on Wednesday.

The November crude oil contract was down US$2.02 at US$67.67 per barrel and the November natural gas contract was down seven cents at US$2.75 per mmBTU.

The December gold contract was up US$10.20 at US$2,694.90 an ounce and the December copper contract was up 15 cents at US$4.64 a pound.

— With files from The Associated Press

This report by The Canadian Press was first published Sept. 26, 2024.

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

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BlackBerry Ltd. executives said the company has made good progress in its efforts to cut costs as it reported a slimmer loss in its latest quarter than the prior year.

“This was a good quarter for BlackBerry,” said CEO John Giamatteo on a call with analysts.

“The hard work that the team has done with managing costs is really paying off, with operating expenses now significantly lower than prior year.”

BlackBerry reported a net loss of US$19 million in its second quarter, compared with a US$42-million net loss a year earlier.

The Waterloo, Ont.-headquartered company says revenue for the quarter ended Aug. 31 was US$145 million, up from US$132 million during the same quarter last year.

The company says revenue for both its cybersecurity and Internet of Things divisions grew by double digits year over year. Revenue for the cybersecurity division was US$87 million, while the Internet of Things division brought in US$55 million.

BlackBerry has been working on splitting the two divisions. It announced the planned split last October, saying it intended to pursue a subsidiary public offering for the Internet of Things business after evaluating a range of strategic alternatives for the company.

The company made “tremendous progress” on the split during the quarter, said Giamatteo, with much of the “low-hanging fruit” out of the way.However, he said the company is trying to strike the right balance as it tackles some of the more complicated parts of the split.

“Some of these things are naturally a little bit more intertwined,” he said.

This past quarter, BlackBerry said its adjusted operating expenses came in at US$99 million, down from US$114 million a year earlier.

In February this year, BlackBerry announced it was cutting 200 jobs and exiting six of its 36 global office locations.

“Cost remains a key focus going into the second half, and during September, we announced a number of further back-office headcount reductions and facilities closures as we continued to streamline operations,” said Tim Foote, the company’s new chief financial officer, on the call.

“The new management team at BlackBerry has managed to thread the needle of significantly reducing costs, while at the same time managing to stabilize the top line and even drive growth,” Foote said.

Foote’s appointment was announced near the end of July, succeeding Steve Rai. He was most recently the CFO for BlackBerry’s cybersecurity division.

The company raised the bottom end of its full-year guidance for its Internet of Things division.

Diluted loss per share came in at three cents US, compared with seven cents US last year.

This report by The Canadian Press was first published Sept. 26, 2024.

Companies in this story: (TSX:BB)

Note to readers: This is a corrected story. A previous version has the incorrect revenue number for BlackBerry’s second quarter in the previous year.

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BANFF, ALTA. – Some Canadian CEOs say the hundreds of billions of dollars the United States is offering in subsidies for the energy transition is causing a worrisome brain drain of some of this country’s top talent.

Ken Seitz, the CEO of Saskatoon-based Nutrien Inc., was one of the Canadian executives who expressed the concern Thursday at the Global Business Forum, a conference of business, policy and academic leaders held annually in Banff, Alta.

“You can just see the brainpower heading south,” Seitz said, adding the tax credits and subsidies offered through President Joe Biden’s landmark Inflation Reduction Act are drawing investment dollars south of the border when it comes to things like renewable energy and carbon capture and storage.

“You can see the ecosystem that’s evolving (in the U.S.) around some of these clean technologies, and the very real incentives that are there for all of that to happen.”

Seitz’s concerns were echoed by Darlene Gates, CEO of Canadian oilsands company MEG Energy Corp., who also spoke in Banff on Thursday.

Gates said Canada’s existing combination of regulation and incentives for decarbonization is not spurring the same amount of investment in this country as the Inflation Reduction Act has south of the border.

The Inflation Reduction Act, or IRA, was signed into law in 2022 and offers about US$375 billion in new and extended tax credits for everything from renewable electricity generation to hydrogen production to sustainable jet fuel usage to help the U.S. clean energy industry get off the ground.

Since its inception, the IRA has been held up as the gold standard in the global race for clean energy investment, with many Canadian companies saying the U.S. incentives are so attractive that it’s impossible to compete.

“It’s not that we need to have the same tools, but the outcome needs to be the same as what the IRA is driving. And we’re not getting to the same outcome in Canada as the IRA is producing,” she said.

“If we’re not careful, those investments go to the U.S. Our people, our talent, goes to the U.S. and we become uncompetitive.”

Nutrien, which is the world’s largest fertilizer producer, already employs carbon capture and storage technology to reduce greenhouse gas emissions from its nitrogen production process in Louisiana. Seitz said the company is “enjoying the benefits” of the tax credit the U.S. offers for captured carbon.

For Gates’ part, MEG is part of the Pathways Alliance, a consortium of Canadian oilsands companies that has proposed what would be one of the world’s largest carbon capture and storage networks, but that has not yet made a final decision to go ahead with the project.

Pathways continues to state that it is working with federal and provincial governments to determine a level of fiscal and regulatory support that will enable it to give its project a green light.

While Canada has its own federal tax credit for companies seeking to build carbon capture and storage facilities, it does not provide financial incentives for the actual capturing of carbon like the U.S. does. Instead, Canada has an industrial carbon pricing system that is meant to discourage high levels of emissions.

A report from TD Economics last year said the two country’s systems, while different, amount to a similar level of support for the clean energy transition. But Canadian business leaders have complained that the U.S.’s “carrot” approach makes that country more attractive than Canada’s “stick” approach.

But even as the IRA continues to draw investment south of the border, its future is not certain. A recent report from J.P. Morgan Investment Bank estimated that the IRA combined with the U.S. incentives to produce semiconductors in that country have stimulated close to US$500 billion in announced private investments.

But the report said a Donald Trump victory in the U.S. presidential vote in November could pose a risk to IRA spending.

This report by The Canadian Press was first published Sept. 26, 2024.

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