Cutting the Bank of Canada’s policy interest rate doesn’t seem to be top of mind for governor Tiff Macklem, who said Dec. 15 that it’s still too early to consider undoing the most aggressive series of rate hikes in decades. Macklem made the remarks while delivering his end-of-year speech before the Canadian Club Toronto on Friday, two days after United States Federal Reserve chair Jerome Powell poured fuel on a stock market rally by suggesting that rates were at or close to their peak. The Financial Post’s Denise Paglinawan breaks down what you need to know about Macklem’s speech.
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Bank of Canada’s Macklem talks down interest rate cuts, but says 2% inflation ‘now in sight’
It’s still too early to consider undoing the most aggressive series of rate hikes in decades, central bank governor says
It’s too early to consider cuts
Despite widespread predictions that the Bank of Canada will start cutting interest rates next year, Macklem said that until the central bank sees evidence that Canada is clearly on a path back to two per cent inflation, cuts are off the table. Macklem said the central bank doesn’t need to wait until inflation is all the way back to that target to consider easing policy, but it does need to be clearly headed to two per cent. “When it’s clear that inflation is on a sustained downward track, we can begin discussing lowering our policy interest rate,” he said. “We have not started having that discussion, because it’s too early to have that discussion. We’re still discussing whether we’ve raised interest rates enough and how long they need to stay where they are.”
Economic growth is expected to remain weak into 2024
Macklem said the excess demand that drove prices higher over the past two years is now gone. Higher interest rates and tighter global financial conditions have helped rebalance the economy, he said. With growth subdued and the cost of living still increasing too quickly, Macklem forecast the next two to three quarters will be difficult for many. He said consumers will continue to hold back spending, businesses will see weak demand and employment will probably grow more slowly in the labour force. That means the unemployment rate will likely increase further.
Expect some push and pull on inflation
Over the coming months, Canadians should expect to see some push and pull on inflation. While the cooling economy will reduce price pressures, Macklem said other forces will continue to exert upward pressure on prices. As a result, further decreases in inflation will likely be gradual. He noted that new surprises can’t be ruled out, either. For one, an escalation of war in Europe or the Middle East may divert trade, investment and disrupt supply chains. Climate events have become more frequent and more extreme, both at home and abroad. These risks often affect prices and the bank needs to be vigilant and ready to adjust as needed.
Two per cent inflation isn’t here yet, but the target is ‘in sight’
Macklem said that looking back at 2023 reminds us of how far we’ve come. “The two per cent inflation target is now in sight. And while we’re not there yet, the conditions increasingly appear to be in place to get us there,” he said. Macklem said we still need to see more downward momentum in core inflation and that the bank will be watching the supply-demand balance, wage growth, corporate pricing behaviour and inflation expectations closely as it assesses where Canada is on the path to price stability. Macklem said he expects inflation will be getting close to the two per cent target by the end of next year.
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TORONTO – Canada Goose Holdings Inc. says it has signed a deal that will result in the creation of its first eyewear collection.
The deal announced on Thursday by the Toronto-based luxury apparel company comes in the form of an exclusive, long-term global licensing agreement with Marchon Eyewear Inc.
The terms and value of the agreement were not disclosed, but Marchon produces eyewear for brands including Lacoste, Nike, Calvin Klein, Ferragamo, Longchamp and Zeiss.
Marchon plans to roll out both sunglasses and optical wear under the Canada Goose name next spring, starting in North America.
Canada Goose says the eyewear will be sold through optical retailers, department stores, Canada Goose shops and its website.
Canada Goose CEO Dani Reiss told The Canadian Press in August that he envisioned his company eventually expanding into eyewear and luggage.
This report by The Canadian Press was first published Sept. 19, 2024.
Companies in this story: (TSX:GOOS)
The Canadian Press. All rights reserved.
Almost seven years since news broke of an alleged conspiracy to fix the price of packaged bread across Canada, the saga isn’t over: the Competition Bureau continues to investigate the companies that may have been involved, and two class-action lawsuits continue to work their way through the courts.
Here’s a timeline of key events in the bread price-fixing case.
Oct. 31, 2017: The Competition Bureau says it’s investigating allegations of bread price-fixing and that it was granted search warrants in the case. Several grocers confirm they are co-operating in the probe.
Dec. 19, 2017: Loblaw and George Weston say they participated in an “industry-wide price-fixing arrangement” to raise the price of packaged bread. The companies say they have been co-operating in the Competition Bureau’s investigation since March 2015, when they self-reported to the bureau upon discovering anti-competitive behaviour, and are receiving immunity from prosecution. They announce they are offering $25 gift cards to customers amid the ongoing investigation into alleged bread price-fixing.
Jan. 31, 2018: In court documents, the Competition Bureau says at least $1.50 was added to the price of a loaf of bread between about 2001 and 2016.
Dec. 20, 2019: A class-action lawsuit in a Quebec court against multiple grocers and food companies is certified against a number of companies allegedly involved in bread price-fixing, including Loblaw, George Weston, Metro, Sobeys, Walmart Canada, Canada Bread and Giant Tiger (which have all denied involvement, except for Loblaw and George Weston, which later settled with the plaintiffs).
Dec. 31, 2021: A class-action lawsuit in an Ontario court covering all Canadian residents except those in Quebec who bought packaged bread from a company named in the suit is certified against roughly the same group of companies.
June 21, 2023: Bakery giant Canada Bread Co. is fined $50 million after pleading guilty to four counts of price-fixing under the Competition Act as part of the Competition Bureau’s ongoing investigation.
Oct. 25 2023: Canada Bread files a statement of defence in the Ontario class action denying participating in the alleged conspiracy and saying any anti-competitive behaviour it participated in was at the direction and to the benefit of its then-majority owner Maple Leaf Foods, which is not a defendant in the case (neither is its current owner Grupo Bimbo). Maple Leaf calls Canada Bread’s accusations “baseless.”
Dec. 20, 2023: Metro files new documents in the Ontario class action accusing Loblaw and its parent company George Weston of conspiring to implicate it in the alleged scheme, denying involvement. Sobeys has made a similar claim. The two companies deny the allegations.
July 25, 2024: Loblaw and George Weston say they agreed to pay a combined $500 million to settle both the Ontario and Quebec class-action lawsuits. Loblaw’s share of the settlement includes a $96-million credit for the gift cards it gave out years earlier.
Sept. 12, 2024: Canada Bread files new documents in Ontario court as part of the class action, claiming Maple Leaf used it as a “shield” to avoid liability in the alleged scheme. Maple Leaf was a majority shareholder of Canada Bread until 2014, and the company claims it’s liable for any price-fixing activity. Maple Leaf refutes the claims.
This report by The Canadian Press was first published Sept. 19, 2024.
Companies in this story: (TSX:L, TSX:MFI, TSX:MRU, TSX:EMP.A, TSX:WN)
The Canadian Press. All rights reserved.
TORONTO – TD Bank Group, which is mired in a money laundering scandal in the U.S., says chief executive Bharat Masrani will retire next year.
Masrani, who will retire officially on April 10, 2025, says the bank’s, “anti-money laundering challenges,” took place on his watch and he takes full responsibility.
The bank named Raymond Chun, TD’s group head, Canadian personal banking, as his successor.
As part of a transition plan, Chun will become chief operating officer on Nov. 1 before taking over the top job when Masrani steps down at the bank’s annual meeting next year.
TD also announced that Riaz Ahmed, group head, wholesale banking and president and CEO of TD Securities, will retire at the end of January 2025.
TD has taken billions in charges related to ongoing U.S. investigations into the failure of its anti-money laundering program.
This report by The Canadian Press was first published Sept. 19, 2024.
Companies in this story: (TSX:TD)
The Canadian Press. All rights reserved.
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