Business

Bank of Canada hikes interest rate to 5%, warning inflation could linger – Financial Post

Published

1 year ago

July 12, 2023

Harry Miller

Lending rate highest in 22 years

Bank of Canada governor Tiff Macklem. Photo by Sean Kilpatrick /THE CANADIAN PRESS

The Bank of Canada raised its key interest rate by 25 basis points to 5 per cent Wednesday, warning that it could take longer than expected to tame inflation.

Forecasters had widely expected the hike, the second after the central bank ended its pause in June.

The Bank said in its statement that Canada’s economy has proven stronger than expected and the labour market remains tight with wage growth at about 4 to 5 per cent.

Financial Post

Policy makers said they expect growth to slow as higher interest rates work their way through the economy and their July Monetary Policy Report calls for real GDP growth of 1.8 per cent this year and 1.2 per cent in 2024.

Inflation, however, remains a concern. Though the consumer price index has dropped from its peak of 8.1 per cent last summer to 3.4 per cent in May, the decline has come mostly from lower energy prices, the Bank said. Core inflation, which has stayed at about 3.5 to 4 per cent, has proven more persistent than expected.

The Bank said its Business Outlook Survey reinforced this, with businesses saying they were increasing their prices more frequently than normal.

The central bank pushed out its inflation forecast, now predicting that price growth will not return to target until the middle of 2025, about six months later than earlier forecasts.

“Governing Council remains concerned that progress towards the 2 per cent target could stall, jeopardizing the return to price stability,” said the statement.

The loonie jumped to its highest intraday level since June 27, trading at 76 US cents after the decision was released.The benchmark two-year yield, which had plunged earlier after U.S. inflation came in at a lower rate than expected, fell further to 4.675 per cent, Bloomberg reports.

The bank reiterated that it “remains resolute” in its commitment to achieving price stability, but provided little guidance on the where rates might go from here.

However, Bank of Canada governor Tiff Macklem said in a news conference that it may not be the last.

“If new information suggests we need to do more, we are prepared to increase our policy rate further. But we don’t want to do more than we have to,” he said.

“These decisions will be guided by our assessment of incoming data and the outlook for inflation. We need to see demand growth slow, wage pressures moderate and corporate pricing behaviour normalize.”

More to come …

With additional reporting by Bloomberg and Canadian Press

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Business

TC Energy cuts cost estimate for Southeast Gateway pipeline project in Mexico

Published

4 hours ago

November 7, 2024

Anne Joseph

CALGARY – TC Energy Corp. has lowered the estimated cost of its Southeast Gateway pipeline project in Mexico.

It says it now expects the project to cost between US$3.9 billion and US$4.1 billion compared with its original estimate of US$4.5 billion.

The change came as the company reported a third-quarter profit attributable to common shareholders of C$1.46 billion or $1.40 per share compared with a loss of C$197 million or 19 cents per share in the same quarter last year.

Revenue for the quarter ended Sept. 30 totalled C$4.08 billion, up from C$3.94 billion in the third quarter of 2023.

TC Energy says its comparable earnings for its latest quarter amounted to C$1.03 per share compared with C$1.00 per share a year earlier.

The average analyst estimate had been for a profit of 95 cents per share, according to LSEG Data & Analytics.

This report by The Canadian Press was first published Nov. 7, 2024.

Companies in this story: (TSX:TRP)

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Business

BCE reports Q3 loss on asset impairment charge, cuts revenue guidance

Published

4 hours ago

November 7, 2024

Anne Joseph

BCE Inc. reported a loss in its latest quarter as it recorded $2.11 billion in asset impairment charges, mainly related to Bell Media’s TV and radio properties.

The company says its net loss attributable to common shareholders amounted to $1.24 billion or $1.36 per share for the quarter ended Sept. 30 compared with a profit of $640 million or 70 cents per share a year earlier.

On an adjusted basis, BCE says it earned 75 cents per share in its latest quarter compared with an adjusted profit of 81 cents per share in the same quarter last year.

“Bell’s results for the third quarter demonstrate that we are disciplined in our pursuit of profitable growth in an intensely competitive environment,” BCE chief executive Mirko Bibic said in a statement.

“Our focus this quarter, and throughout 2024, has been to attract higher-margin subscribers and reduce costs to help offset short-term revenue impacts from sustained competitive pricing pressures, slow economic growth and a media advertising market that is in transition.”

Operating revenue for the quarter totalled $5.97 billion, down from $6.08 billion in its third quarter of 2023.

BCE also said it now expects its revenue for 2024 to fall about 1.5 per cent compared with earlier guidance for an increase of zero to four per cent.

The company says the change comes as it faces lower-than-anticipated wireless product revenue and sustained pressure on wireless prices.

BCE added 33,111 net postpaid mobile phone subscribers, down 76.8 per cent from the same period last year, which was the company’s second-best performance on the metric since 2010.

It says the drop was driven by higher customer churn — a measure of subscribers who cancelled their service — amid greater competitive activity and promotional offer intensity. BCE’s monthly churn rate for the category was 1.28 per cent, up from 1.1 per cent during its previous third quarter.

The company also saw 11.6 per cent fewer gross subscriber activations “due to more targeted promotional offers and mobile device discounting compared to last year.”

Bell’s wireless mobile phone average revenue per user was $58.26, down 3.4 per cent from $60.28 in the third quarter of the prior year.

This report by The Canadian Press was first published Nov. 7, 2024.

Companies in this story: (TSX:BCE)

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Business

Canada Goose reports Q2 revenue down from year ago, trims full-year guidance

Published

4 hours ago

November 7, 2024

Anne Joseph

TORONTO – Canada Goose Holdings Inc. trimmed its financial guidance as it reported its second-quarter revenue fell compared with a year ago.

The luxury clothing company says revenue for the quarter ended Sept. 29 totalled $267.8 million, down from $281.1 million in the same quarter last year.

Net income attributable to shareholders amounted to $5.4 million or six cents per diluted share, up from $3.9 million or four cents per diluted share a year earlier.

On an adjusted basis, Canada Goose says it earned five cents per diluted share in its latest quarter compared with an adjusted profit of 16 cents per diluted share a year earlier.

In its outlook, Canada Goose says it now expects total revenue for its full financial year to show a low-single-digit percentage decrease to low-single-digit percentage increase compared with earlier guidance for a low-single-digit increase.

It also says it now expects its adjusted net income per diluted share to show a mid-single-digit percentage increase compared with earlier guidance for a percentage increase in the mid-teens.

This report by The Canadian Press was first published Nov. 7, 2024.

Companies in this story: (TSX:GOOS)

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