Canada’s annual inflation rate held steady at 3.1 per centin November, matching the previous month’s rate, according to data released by Statistics Canada on Tuesday.
Economists were expecting the rate to fall below the three per cent threshold, putting the economy closer to the Bank of Canada’s two per cent inflation goal.
Mortgage interest costs and the high cost of rent remain two of the largest contributors to the inflation rate, rising 29.8 per cent and 7.4 per cent from a year ago, respectively.
Higher prices for travel tours put upward pressure on consumer costs as well. Slower price growth for food, energy and cell services balanced this out.
While the price of groceries rose 4.7 per cent from a year ago, they did so at a slower pace compared to the previous year’s rates for the fifth consecutive month in a row — with a few exceptions, including meat, preserved vegetables and sugar, the agency reported.
If volatile food and energy prices are stripped out from the core inflation number, the consumer price index hovered at 3.5 per cent in November.
Some foods could get cheaper in 2024, but grocery bills may still go up
Canada’s Food Price Report predicts that overall food prices will go up in 2024, but some products could get cheaper as many industry challenges have eased.
Though Bank of Montreal chief economist Douglas Porter called the results “moderately disappointing,” he wrote in a note the bigger picture remains that underlying inflation has lowered, the economy is cooling and the Bank of Canada is still expected to start cutting its key interest rate mid-next year.
The Bank of Canada held interest rates steady this month at five per cent for the fourth month in a row, more than a year and a half after beginning its aggressive campaign to cool the economy.
Last week, the central bank’s governor Tiff Macklem said that it was still too soon for the institution to consider rate cuts.
Barbershop owner says costs haven’t come down
Jereme Bokitch, the founder of Calgary hair salon group Hedkandi, said that even as inflation eases, the cost of operating the group’s businesses hasn’t changed accordingly.
“Any time the prices have went up for anything in our world, they’ve never come down,” Bokitch said.
‘Anytime the prices have went up for anything in our world, they’ve never come down,’ said Jereme Bokitch, the founder of Calgary hair salon group Hedkandi. (Anis Heydari/CBC)
“So as we’re getting, every six months, a price increase for our shampoo, our cleaners, our coffee, every little thing that we use to complete a service, it’s never went back. So it just keeps getting more and more expensive.”
Per Statistics Canada’s latest data, the cost of services remained high in November, rising 4.6 per cent year-over-year and matching October’s rate.
“I think every single thing would need to come down in my business in order to offer a price decrease,” Bokitch added. “And after doing this for 25 years, I’ve yet to see anybody raise their prices and then back them back out.”
Why Canadians aren’t seeing a steep drop in prices
Canadians are still feeling the pressure at the supermarket. Chloe Daley, who spoke to CBC News outside a Toronto grocery store, said “everything is still the same price. It’s still $2.99 for a cucumber when it used to be $0.99.”
“Even though they’re saying it’s slowly going down. I don’t see a change in anything,” she said. “It’s very hard.”
The Bank of Canada is looking for stability in the rate at which prices increase, not a backsliding of prices, said Beata Caranci, chief economist at TD Bank. (Laura MacNaughton/CBC)
So as inflation continues to trend downward, why aren’t Canadians necessarily seeing prices drop at the store? That’s the difference between inflation and deflation, according to Beata Caranci, chief economist at TD Bank.
When inflation eases, price growth might fall from four to five per cent, to two to three per cent. “But directionally, it’s still up. You’re still going to be paying more this year than last year,” she explained.
An example of deflation, however, would be prices dropping 10 per cent to where they were in 2019, which isn’t likely to happen across the board, Caranci added. It also wouldn’t be a good sign for the economy.
“What the Bank of Canada is looking for is stability in the rate at which prices increase…. They would probably be worried if prices start to really backslide,” she said. “It would tell you you have an imbalance in the economy now on the other side — too much slack. So that would be a concern for them if that happened.”
“For the consumer perspective, what you’re looking for is price stability. You’re not necessarily looking to get the prices you had two to three years ago.”
TOKYO (AP) — Japanese technology group SoftBank swung back to profitability in the July-September quarter, boosted by positive results in its Vision Fund investments.
Tokyo-based SoftBank Group Corp. reported Tuesday a fiscal second quarter profit of nearly 1.18 trillion yen ($7.7 billion), compared with a 931 billion yen loss in the year-earlier period.
Quarterly sales edged up about 6% to nearly 1.77 trillion yen ($11.5 billion).
SoftBank credited income from royalties and licensing related to its holdings in Arm, a computer chip-designing company, whose business spans smartphones, data centers, networking equipment, automotive, consumer electronic devices, and AI applications.
The results were also helped by the absence of losses related to SoftBank’s investment in office-space sharing venture WeWork, which hit the previous fiscal year.
WeWork, which filed for Chapter 11 bankruptcy protection in 2023, emerged from Chapter 11 in June.
SoftBank has benefitted in recent months from rising share prices in some investment, such as U.S.-based e-commerce company Coupang, Chinese mobility provider DiDi Global and Bytedance, the Chinese developer of TikTok.
SoftBank’s financial results tend to swing wildly, partly because of its sprawling investment portfolio that includes search engine Yahoo, Chinese retailer Alibaba, and artificial intelligence company Nvidia.
SoftBank makes investments in a variety of companies that it groups together in a series of Vision Funds.
The company’s founder, Masayoshi Son, is a pioneer in technology investment in Japan. SoftBank Group does not give earnings forecasts.
Shopify Inc. executives brushed off concerns that incoming U.S. President Donald Trump will be a major detriment to many of the company’s merchants.
“There’s nothing in what we’ve heard from Trump, nor would there have been anything from (Democratic candidate) Kamala (Harris), which we think impacts the overall state of new business formation and entrepreneurship,” Shopify’s chief financial officer Jeff Hoffmeister told analysts on a call Tuesday.
“We still feel really good about all the merchants out there, all the entrepreneurs that want to start new businesses and that’s obviously not going to change with the administration.”
Hoffmeister’s comments come a week after Trump, a Republican businessman, trounced Harris in an election that will soon return him to the Oval Office.
On the campaign trail, he threatened to impose tariffs of 60 per cent on imports from China and roughly 10 per cent to 20 per cent on goods from all other countries.
If the president-elect makes good on the promise, many worry the cost of operating will soar for companies, including customers of Shopify, which sells e-commerce software to small businesses but also brands as big as Kylie Cosmetics and Victoria’s Secret.
These merchants may feel they have no choice but to pass on the increases to customers, perhaps sparking more inflation.
If Trump’s tariffs do come to fruition, Shopify’s president Harley Finkelstein pointed out China is “not a huge area” for Shopify.
However, “we can’t anticipate what every presidential administration is going to do,” he cautioned.
He likened the uncertainty facing the business community to the COVID-19 pandemic where Shopify had to help companies migrate online.
“Our job is no matter what comes the way of our merchants, we provide them with tools and service and support for them to navigate it really well,” he said.
Finkelstein was questioned about the forthcoming U.S. leadership change on a call meant to delve into Shopify’s latest earnings, which sent shares soaring 27 per cent to $158.63 shortly after Tuesday’s market open.
The Ottawa-based company, which keeps its books in U.S. dollars, reported US$828 million in net income for its third quarter, up from US$718 million in the same quarter last year, as its revenue rose 26 per cent.
Revenue for the period ended Sept. 30 totalled US$2.16 billion, up from US$1.71 billion a year earlier.
Subscription solutions revenue reached US$610 million, up from US$486 million in the same quarter last year.
Merchant solutions revenue amounted to US$1.55 billion, up from US$1.23 billion.
Shopify’s net income excluding the impact of equity investments totalled US$344 million for the quarter, up from US$173 million in the same quarter last year.
Daniel Chan, a TD Cowen analyst, said the results show Shopify has a leadership position in the e-commerce world and “a continued ability to gain market share.”
In its outlook for its fourth quarter of 2024, the company said it expects revenue to grow at a mid-to-high-twenties percentage rate on a year-over-year basis.
“Q4 guidance suggests Shopify will finish the year strong, with better-than-expected revenue growth and operating margin,” Chan pointed out in a note to investors.
This report by The Canadian Press was first published Nov. 12, 2024.
TORONTO – RioCan Real Estate Investment Trust says it has cut almost 10 per cent of its staff as it deals with a slowdown in the condo market and overall pushes for greater efficiency.
The company says the cuts, which amount to around 60 employees based on its last annual filing, will mean about $9 million in restructuring charges and should translate to about $8 million in annualized cash savings.
The job cuts come as RioCan and others scale back condo development plans as the market softens, but chief executive Jonathan Gitlin says the reductions were from a companywide efficiency effort.
RioCan says it doesn’t plan to start any new construction of mixed-use properties this year and well into 2025 as it adjusts to the shifting market demand.
The company reported a net income of $96.9 million in the third quarter, up from a loss of $73.5 million last year, as it saw a $159 million boost from a favourable change in the fair value of investment properties.
RioCan reported what it says is a record-breaking 97.8 per cent occupancy rate in the quarter including retail committed occupancy of 98.6 per cent.
This report by The Canadian Press was first published Nov. 12, 2024.
