Global supply chain Bottlenecks are not easing as quickly as expected, meaning inflation in Canada and among IMF members will probably take a little longer to come down, the governor of the Bank of Canada said on Thursday.
Those issues will weigh on Canada‘s near-term economic recovery, meaning it is reasonable to expect that an expected rebound will not be as fast as the central bank forecast in July, Tiff Macklem told reporters after attending International Monetary Fund meetings in Washington.
“These bottlenecks are not easing as quickly as expected. And there was certainly a strong consensus these issues warrant continued attention and they are going to take some time to work through,” Macklem said of his talks with central bankers.
“What this all means, in all our countries, is that inflation – measures of inflation – are probably going to take a little longer to come back down,” he continued.
The concern now, he said, was that bottlenecks looked to be more complicated and persistent than previously thought, although they continue to be viewed as transitory.
Macklem also looked to quell public criticism over the bank’s stance that high inflation is temporary. Canada‘s inflation rate accelerated to 4.1% in August, well above the 2% midpoint of the bank’s 1-3% control range.
“Our job … is to make sure that these one-off price increases don’t become ongoing inflation. We think there’s good reasons to believe that these are one-off price increases. They won’t create ongoing inflation,” he said.
Macklem also said slack remained in Canada‘s labor market, despite employment returning to its pre-pandemic level in September.
“It is an important milestone, but it’s not the destination,” he said. “We’ve had growth in our labor force … so slack in the labor market remains.”
Pointing to young people and women, he said: “Job growth has been particularly concentrated in the areas that needed it most.” But low-wage worker employment is still well below pre-pandemic levels, he added.
(Reporting by Julie Gordon and David Ljunggren in Ottawa; Editing by Peter Cooney)
Rogers family boardroom drama unlikely to impact deal to buy Shaw
A boardroom tussle at Rogers Communications Inc is unlikely to hinder its C$20 billion ($16.16 billion) buy of Shaw Communications, analysts said, but the family drama is continuing at one of Canada’s biggest telecoms companies.
The board of Rogers on Thursday voted out Chairman Edward Rogers, son of the late founder Ted Rogers, after he tried to replace Chief Executive Officer Joe Natale with another executive.
Hours later, Edward Rogers said as chair of the Rogers Control Trust, the family-controlled entity that owns the majority of ownership shares in RCI, he would remove the five RCI board directors who acted against him.
Rogers’ move is the latest in a tumultuous period, during which he has been at odds with his sisters and mother, all of whom are also board directors and who backed Natale.
The company said on Friday that it had not received any documentation from its former chair with respect to the attempted removal of directors, and would consult with its lawyers about the legality of Edward Rogers’ move.
“The company is not aware of this mechanism ever having been utilized in respect of a public company in Canada,” Rogers Communications said in a statement.
J.P.Morgan analysts said they hoped the boardroom battle would not overshadow the timeline or approval process of the deal to buy smaller rival Shaw.
“We maintain our base case that Rogers will be able to close its transformative acquisition of Shaw in 1H22 following the divestiture of some or all of Shaw’s wireless business,” J.P.Morgan wrote in a note to investors.
While the company’s bid for Shaw would further boost its position in Canada’s highly concentrated telecoms market, it has attracted scrutiny from multiple government regulators over whether it will decrease competition.
Scotiabank analysts said they expect the deal to get regulatory approvals within the planned timeline of first half of next year.
The structure of the Rogers Control Trust is a unique feature among Canadian companies, said David Brown, a corporate governance consultant.
Normally each family member would control their individual shares, but Ted Rogers’ estate set up the trust to represent all the family members together, meaning the 97.5% of Class A ownership shares are controlled by the family trust vote as one.
The purpose seems to be to “avoid impasses (between family members) that would block any votes from getting through the organization,” Brown said, adding that the structure gives the chair of the trust “some pretty unprecedented powers.”
But, he said, Rogers is still accountable to the family.
“Edward is allowed to do what he’s doing until the rest of the family step in and stop him,” Brown said.
($1 = 1.2377 Canadian dollars)
(Reporting by Uday Sampath in Bengaluru; Editing by Sweta Singh and Arun Koyyur)
Walmart recalling 3,900 bottles of room spray due to possible dangerous bacteria- U.S. CPSC
Walmart Inc is recalling around 3,900 bottles of its Better Homes and Gardens-branded room spray due to the possible presence of a rare and dangerous bacteria, the U.S. Consumer Product Safety Commission (CPSC) said on Friday.
The U.S. Centers for Disease Control and Prevention has been investigating a cluster of four confirmed cases of melioidosis including two deaths in the country, although the source of these four infections has not been confirmed, the CPSC said.
(Reporting by Praveen Paramasivam in Bengaluru; Editing by Aditya Soni)
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