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Bank of Canada’s interest-rate hold, RBC’s terminated CFO and Liberals’ pre-budget housing plans: Must-read business and investing stories

Published

7 months ago

April 14, 2024

Bank of Canada Governor Tiff Macklem and Deputy Governor Carolyn Rogers during a news conference following the rate announcement, Wednesday, April 10.Adrian Wyld/The Canadian Press

Getting caught up on a week that got away? Here’s your weekly digest of the Globe’s most essential business and investing stories, with insights and analysis from the pros, stock tips, portfolio strategies and more.

Bank of Canada holds key interest rate at 5%

The Bank of Canada kept its policy interest rate at 5 per cent for the sixth consecutive time and offered no timeline for rate cuts. But Governor Tiff Macklem said he was more confident that inflation is heading back to the bank’s target – which may open the door to rate cuts this summer. He also said a rate cut at the next policy meeting in June was “within the realm of possibilities.” The bank downgraded its forecast for inflation while upgrading its forecast for economic growth. The next Bank of Canada interest rate announcement is on June 5.

RBC terminated CFO after complaint sparked probe

Royal Bank of Canada terminated Nadine Ahn, its chief financial officer, after an investigation revealed she had a personal relationship with another employee which led to preferential treatment. A Globe exclusive by Stefanie Marotta, Tim Kiladze and James Bradshaw found that an employee complaint sparked the internal investigation. The investigation concluded that Ms. Ahn influenced promotions and pay raises for Ken Mason, a vice-president in the bank’s treasury department. David Milstead also reports Ms. Ahn stands to lose millions of dollars in pay from the termination.

Decoder: The drawn-out decimation of restaurant jobs

The hospitality sector, which suffered a significant setback during the pandemic, still hasn’t rebounded to pre-pandemic levels. According to Statistics Canada’s Labour Force Survey, employment in the accommodation and food services industry is down nearly 10 per cent from February, 2020 – which translates to roughly 120,000 fewer people working in this field. Meanwhile, the rest of the labour market is up 7.2 per cent. Matt Lundy comes to some interesting conclusions about the industry in this week’s Decoder.

The Liberals’ latest pre-budget housing announcements

Amid ongoing pressure to ease the country’s housing crisis, the federal government announced a series of new measures this week. First, Ottawa said it will allow first-time homebuyers to take out 30-year mortgages for newly built homes. Housing advocates have long called for a longer amortization period in an effort to make mortgage payments more affordable, and this is the first time in more than 10 years that Ottawa has eased its mortgage rules, Rachelle Younglai reports. The Liberal government also unveiled its overarching housing plan with new pledges, including plans to crack down on mortgage and real estate fraud.

Bell executives defend media job cuts in committee testimony

During a House of Commons committee hearing, Bell’s chief executive officer Mirko Bibic defended the company’s decision to cut its work force by 4,800. He, along with two other executives, told the committee that the federal government has been too slow to aid media companies in crisis. They urged Ottawa to speed up regulations that even the playing field so Canadian providers can compete with global streaming giants. “Let me be clear, we’re not asking for special protections. We’re asking for a level playing field with global media web giants,” Mr. Bibic said.

Costs for CRA’s bare trusts rules neared $1-billion, survey of accounting firms suggests

Canadian accountants and their clients may have spent close to $1-billion while trying to comply with Canada Revenue Agency’s controversial new reporting rules for bare trusts, according to a survey of Canadian accounting firms. This was before CRA made a last-minute decision not to enforce them for the 2023 tax year. Erica Alini reports that the reversal caused an uproar among taxpayers and accountants, who bemoaned the loss of money and hours of work spent on efforts to comply with the complex rules. The deadline for filing taxes in Canada for 2024 is April 30. As the big day approaches, The Globe and Mail offers advice on how to maximize returns, find credits and avoid an audit in our full series on tax tips.

The Bank of Canada surprised no one this week when it decided to hold its policy interest rate steady at 5 per cent. However, Governor Tiff Macklem did lift spirits by saying a rate cut was “within the realm of possibilities” in:

a. May

b. June

c. July

d. August

b. June. Mr. Macklem indicated a rate cut is possible at the next meeting of the Bank of Canada’s governing council in June, but cautioned the central bank would require evidence that the recent decline in inflation is sustained and durable.

Now that you’re all caught up, test your knowledge with our weekly business and investing news quiz and prepare for the week ahead with the Globe’s investing calendar.

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Business

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

Published

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

Published

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

Published

24 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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