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Canada's economy rebounded in February | Canada Immigration News – Canada Immigration News

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Published on March 12th, 2021 at 02:10pm EST

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In February, Canada’s economy almost regained all of the jobs it lost in the two months prior, and the unemployment rate was the lowest it has been since March 2020.

The number of people employed in February increased by 259,000 after falling by 266,000 over December and January. Statistics Canada derived these data from conducting their monthly Labour Force Survey during the week of February 14 to 20.

Employment rates are the number of people who are working as a percentage of the population of people aged 15 and older. Unemployment is calculated by the number of unemployed people as a percentage of the entire labour force.

In February, the unemployment rate fell to 8.2 per cent, 1.2 percentage points lower than January and the lowest since Canada went into lockdown last year.

Compared with February 2020, there were 599,000 (-3.1 per cent) fewer people employed, and 406,000 (+50 per cent) more people working less than half of their usual hours. The total hours worked increased by 1.4 per cent, driven by gains in wholesale and retail trade.

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Employment rebounds in industries most affected by coronavirus-related closures

The number of people working in retail trade as well as accommodation and food services increased in February as coronavirus-related measures were lifted.

Employment in the information, culture, and recreation industry was little changed in February, after several months of steady decline.

February employment increases were concentrated in low-paying jobs of $17.50 per hour or less, which reflects the growth in industries with a high proportion of low-paying jobs.

Employment gains in professional, scientific, and technical services exceed pre-pandemic levels

The number of people working in professional, scientific, and technical services was little changed month over month, but employment in the industry rose 5.6 per cent compared to the same time last year, which is equal to about 86,000 more people working. This is the largest year-over-year increase across all industries. Nearly all of these gains were seen in Ontario and British Columbia. Many businesses in this industry can operate remotely, which allows them to stay open during periods of lockdown.

For this industry, the job vacancy rate was higher than the Canadian average in December, after seeing months of employment growth in the latter part of 2020.

There are about 75,000 more people working in computer and information systems occupations compared to February 2020, including both professional and technical occupations. These year-over-year gains were driven mostly by men and were little changed among women.

Employment rates for very recent immigrants little changed

Coronavirus-related travel restrictions caused the number of newcomers in 2020 to fall to the lowest level since 1998. In February, there were 13.8 per cent fewer very recent immigrants in the labour market compared year-over-year. This group is comprised of permanent residents who landed in Canada within the past five years.

Employment for these newcomers was also down 12.1 per cent compared to the same time frame. As a result, the employment rate for very recent immigrants for the three-month period ending in February was little changed compared to the same time last year.

For immigrants who landed more than five years ago, employment in February was one per cent shy of pre-pandemic levels. Their employment rate was slightly lower than Canadian-born workers, with immigrant employment rates at 57.3 per cent, and Canadian-born workers at 58.3 per cent.

The importance of population growth and employment rate

Canada’s level of employment and employment rate will be important indicators of labour market conditions. Statistics Canada says that in order for Canada to return to pre-pandemic employment rates, the level of employment must increase beyond February 2020 to match population growth that has occurred since then.

Canada’s employment rate in February 2020 was 61.8 per cent. By April, it fell to 51.5 per cent, the lowest level since comparable data became available in 1976. This past February, the employment rate was 59.4 per cent, which is 2.4 percentage points below pre-pandemic levels.

If the population had remained the same year-over-year, the employment rate in February would have been 5.9 percentage points below the pre-pandemic rate. This difference shows the importance of population growth in economic recovery. There has been a small population increase in Canada, although reduced levels of immigrants have slowed growth. In an average year, immigration is responsible for roughly 80 per cent of Canada’s population growth.

The Canadian government committed to welcoming 401,000 new immigrants in 2021. In January alone, immigration rates were comparable to pre-pandemic levels, suggesting that Canada is on track to meet its ambitious immigration levels target.

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  • Shelby Thevenot

    Shelby Thevenot

    Editor, CIC News

    Shelby is an Editor at CIC News.

    Shelby has worked as a freelance writer, photojournalist and staff video journalist before she came to CIC News in 2019.

    She has lived in Manitoba, Alberta, B.C., and now Quebec. Her exposure to life in multiple communities across Canada
    helps her connect readers with the places where they may end up living someday.

    Helping people navigate the complex Canadian immigration system is what drives her to create new, engaging, and comprehensive content for CIC News readers.

    Talking to people with interesting stories and insights is the best part of her day. Send story ideas to shelby.thevenot@canadavisa.com.

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Canadian National challenges Canadian Pacific with $33.7 billion Kansas City bid

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By Shreyasee Raj

(Reuters) -Canadian National said on Tuesday it had offered to buy Kansas City Southern railroad for about $33.7 billion, and shares of U.S. company soared as investors anticipated a potential bidding war with Canadian Pacific.

Canadian Pacific had agreed a deal to acquire Kansas City Southern for about $25 billion last month. Either combination would create a North American railway spanning the United States, Mexico and Canada as supply chains recover from being disrupted by the COVID-19 pandemic.

The acquisition interest in Kansas City Southern also follows the ratification of the US-Mexico-Canada Agreement last year, that removed the threat of trade tensions which had escalated under former U.S. President Donald Trump.

Kansas City said it would evaluate Canadian National’s offer. If it found it could lead to a better deal, Canadian Pacific will be given the opportunity to raise its bid.

Canadian National’s cash-and-stock offer, worth $325 per share, is at a 26.8% premium to Kansas City Southern’s offer as of Monday’s trading close.

“We are surprised by this move given the healthy valuation Canadian Pacific had already offered to Kansas City Southern shareholders,” Stephens analyst Justin Long wrote in a note to clients.

Kansas City Southern shares rose 15.8% to $297.12, indicating most investors deemed it unlikely the company would stick with Canadian Pacific’s offer.

One investor that took a different view is Chilton Investment Co, which has a less than 1% stake in Kansas City Southern. Citing regulatory hurdles, it said it preferred a deal with Canadian Pacific.

“There’s more overlap with Canadian National deal which makes it harder to get (regulatory) approval. The Surface Transportation Board (STB) doesn’t like overlap,” Chilton CEO Richard Chilton said.

Canadian National CEO Jean-Jacques Ruest said his network and that of Kansas City Southern are “highly complementary networks with limited overlap.” They only run parallel for 65 miles, between Baton Rouge and New Orleans.

Kansas City Southern has domestic and international rail operations in North America, focused on the north-south freight corridor connecting commercial and industrial markets in the central United States with industrial cities in Mexico. Calgary-based Canadian Pacific is Canada’s No. 2 railroad operator, behind Canadian National.

The STB updated its merger regulations in 2001 to introduce a requirement that Class I railways have to show a deal is in the public interest. Yet it provided an exemption to Kansas City Southern given its small size, potentially limiting the scrutiny that its acquisition will be subjected to.

Canadian Pacific agreed in its negotiations with Kansas City Southern to bear most of the risk of the deal not going through. It will buy Kansas City Southern shares and place them in an independent voting trust, insulating the acquisition target from its control until the STBLatest clears the deal. Were the STB to reject the combination, Canadian Pacific would have to sell the shares of Kansas City Southern, but the current Kansas City Southern shareholders would keep their proceeds.

Canadian National said it was willing to match these terms. It said its offer does not require approval from its own shareholders because of how much cash it has, eliminating a condition in Canadian Pacific’s offer.

Bill Gates’ Cascade Investment, which is Canadian National’s biggest investor with a 14.25% stake, said it fully supports the combination.

A private equity consortium led by Blackstone Group Inc and Global Infrastructure Partners (GIP) made an unsuccessful offer last year to acquire Kansas City Southern. But it was Canadian Pacific’s announcement of a deal with Kansas City Southern that spurred Canadian National into action, as it raised the prospect of losing out to its rival, according to people familiar with the matter.

(Reporting by Shreyasee Raj and Ankit Ajmera in Bengaluru; Additional reporting by Greg Roumeliotis in New York; Editing by Shinjini Ganguli, Anil D’Silva and David Gregorio)

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CEO shake-up at Canada’s Nutrien could pave way to M&A: shareholders

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By Rod Nickel and Maiya Keidan

WINNIPEG, Manitoba (Reuters) – Investors expect the new chief executive of Canada‘s Nutrien Ltd to swing deals as part of a more aggressive growth strategy, after an abrupt shake-up at Canada‘s biggest agriculture company.

Nutrien, the world’s biggest fertilizer producer by capacity, surprised shareholders on Sunday by promoting its chairman, Mayo Schmidt, to CEO, replacing Chuck Magro, who had led the company since it formed from Agrium’s 2018 merger with Potash Corp.

Schmidt, raised on a Kansas farm, is best known for leading the Saskatchewan Wheat Pool grain cooperative’s acquisition of competitor Agricore United in 2007, creating Viterra Inc, one of Canada‘s biggest grain handlers. He subsequently bought Australia’s ABB Grain before leading the sale of Viterra to commodity trader Glencore PLC in 2012.

“Acceleration of M&A is a natural progression as we enter the next commodity supercycle,” said Michael Underhill, chief investment officer at Capital Innovations LLC, which owns Nutrien shares. “I would not bet against him.”

Nutrien shares were down 1.3% on Tuesday, after falling 3.5% on Monday. They have risen about 35% year over year, riding soaring corn prices, but gained only 2% since they began trading in 2018.

Some investors had grown uncertain about Nutrien’s growth strategy under Magro, said Mike Archibald, vice-president and portfolio manager at AGF Investments, which owns C$136 million ($109 million) worth of the company’s stock.

Archibald said now the strategy looks likely to shift to deals.

“The incoming CEO does have a history as a deal-maker so, to the extent he lives up to what he’s done in the past, we should expect sometime in the next 12 months that we’ll get something happening on the M&A front,” Archibald said.

POTENTIAL DEALS

Nutrien could try to acquire U.S. nitrogen fertilizer rival CF Industries, which has a $10-billion market capitalization, or accelerate the company’s roll-up of smaller farm retail stores, Archibald said. A CF spokesman did not immediately respond to a request for comment.

Conversely, Schmidt could sell off the retail business to focus on fertilizer production, Archibald said.

Nutrien declined an interview request for Schmidt. A company spokeswoman said Schmidt’s plans include following the company’s climate change initiatives, which Magro unveiled this month.

Schmidt may also eye selling Nutrien’s phosphate fertilizer business, even though it recently got a boost from U.S. duties against Russian and Moroccan imports, said Brian Madden, senior vice-president at Goodreid Investment Counsel, a Nutrien shareholder.

The CEO change is positive, as Schmidt has an exceptional record of creating shareholder value, said Scotiabank analyst Ben Isaacson. He added that Nutrien could look to consolidate the nitrogen industry.

Schmidt would find it difficult to sell Nutrien itself, Madden said. There is no obvious domestic acquirer and the Canadian government rejected a foreign bid for Potash Corp in 2010.

“Schmidt has got cred in the ag world,” Madden said. But he added that abruptly changing chief executives is not how successions should occur at large companies.

 

 

(Reporting by Rod Nickel in Winnipeg and Maiya Keidan in Toronto; Editing by Marguerita Choy)

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Canadian Business During the Pandemic

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In 2019 the world was hit by the covid 19 pandemic and ever since then people have been suffering in different ways. Usually, economies and businesses have changed the way they work and do business. Most of which are going towards online and automation.

The people most effected by this are the laymen that used to work hard labors to make money for there families. But other then them it has been hard for most business to make such switch. Those of whom got on the online/ e commerce band wagon quickly were out of trouble and into the safe zone but not everyone is mace for the high-speed online world and are thus suffering.

More than 200,000 Canadian businesses could close permanently during the COVID-19 crisis, throwing millions of people out of work as the resurgence of the virus worsens across much of the country, according to new research. You can only imagine how many families these businesses were feeding, not to mention the impact the economy and the GDP is going to bear.

The Canadian Federation of Independent Business said one in six, or about 181,000, Canadian small business owners are now seriously contemplating shutting down. The latest figures, based on a survey of its members done between Jan. 12 and 16, come on top of 58,000 businesses that became inactive in 2020.

An estimate by the CFIB last summer said one in seven or 158,000 businesses were at risk of going under as a result of the pandemic. Based on the organization’s updated forecast, more than 2.4 million people could be out of work. A staggering 20 per cent of private sector jobs.

Simon Gaudreault, CFIB’s senior director of national research, said it was an alarming increase in the number of businesses that are considering closing.

We are not headed in the right direction, and each week that passes without improvement on the business front pushes more owners to make that final decision,”

He said in a statement.

The more businesses that disappear, the more jobs we will lose, and the harder it will be for the economy to recover.

In total, one in five businesses are at risk of permanent closure by the end of the pandemic, the organization said.

The new sad research shows that this year has been horrible for the Canadian businesses.

 

The beginning of 2021 feels more like the fifth quarter of 2020 than a new year,” said Laura Jones, executive vice-president of the CFIB, in a statement.

She called on governments to help small businesses “replace subsidies with sales” by introducing safe pathways to reopen to businesses.

There’s a lot at stake now from jobs, to tax revenue to support for local soccer teams,”

Jones said.

Let’s make 2021 the year we help small business survive and then get back to thriving.”

The whole world has suffered a lot from the pandemic and the Canadian economy has been no stranger to it. We can only pray that the world gets rid of this pandemic quickly and everything become as it used to be. Although I think it is about time, we start setting new norms.

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