Canada's unemployment rate jumps, RBC completes HSBC takeover and Ottawa's $1.5-billion rental protection fund: Must-read business and investing stories - The Globe and Mail | Canada News Media
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Canada's unemployment rate jumps, RBC completes HSBC takeover and Ottawa's $1.5-billion rental protection fund: Must-read business and investing stories – The Globe and Mail

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Canada’s unemployment rate jumped to 6.1 per cent in March, according to Statistics Canada.Ryan Remiorz/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.

Canada’s unemployment rate jumps to 6.1 per cent

Canada’s unemployment rate jumped to 6.1 per cent in March – the latest sign of a weakening economy. Statistics Canada’s labour force survey shows the figure is up from 5.8 per cent in February, marking the largest increase in the unemployment rate for the first time in more than two years. The unemployment rate was driven higher in March by an increase of 60,000 people searching for work or on temporary layoff, Statscan noted. The Canadian numbers were in stark contrast to the United States, which on Friday reported a gain of 303,000 jobs in March, a result that blew past expectations, Matt Lundy reports. The Bank of Canada will make its next monetary policy decision on Wednesday, April 10.

Ottawa launches $1.5-billion fund to protect existing rental apartments

Earlier this week, Prime Minister Justin Trudeau announced the creation of a $1.5-billion rental protection fund that will provide a combination of loans and grants to help non-profits buy affordable rental apartments when they go up for sale. The Canada Rental Protection Fund announcement is the latest in a series of housing pledges from the Trudeau government, which is under pressure to deal with the country’s shortage of affordable housing. The typical price of a home across the country is more than $700,000 and the average monthly market rent for a one-bedroom is about $2,000. Erin Anderssen, Rachelle Younglai and Chen Wang spoke to affordable housing groups who say the fund is long overdue because the country is losing lower-cost rental properties – to renovictions, tenant turnover and demolitions – far faster than it can build them.

Canada’s other export powerhouse: gold

According to Statistics Canada, exports of gold have soared in recent years and are close to becoming Canada’s second-largest export commodity. The agency said exports of unwrought gold in the form of high-value shipments of refined gold, as well as transfers of gold assets in the banking sector, are driving roughly half the growth of total exports in February. The increase was driven by higher gold shipments to Switzerland and the Great Britain as gold prices soared in February. Jason Kirby takes a closer look in this week’s Decoder.

Ford delaying start of EV production at Oakville, Ont., plant until 2027

Ford Motor Co. announced this week it would postpone the launch of electric vehicles at its plant in Oakville, Ont., by two years until 2027. The factory west of Toronto will still shut down in May for a $1.8-billion EV retooling, which will mean extended layoffs for the majority of its 2,700 workers. The decision comes amid Ottawa and Ontario giving billions in incentives to makers of electric cars and batteries to transform the sector and shift away from the production of gas-powered vehicles, Eric Atkins reports. Ford announced plans last year to spend $1.8 billion to transform the Oakville plant into a hub for electric vehicle manufacturing, including battery packs. The investment includes $580-million in taxpayers’ money.

Loblaw paid new CEO Per Bank $22-million in 2023

Loblaw Cos. Ltd. paid its new chief executive Per Bank $22.1-million last year. Mr. Bank took on the top job at Canada’s largest grocer on Nov. 1 – replacing Galen Weston, who remains chairman of the board and Loblaw’s controlling shareholder. His package includes a $1.315-million annual salary, a target annual bonus of nearly $2-million, and a target of $7.2-million in annual long-term incentives for the current year. Mr. Bank’s 2023 pay also included a one-time $18-million award to replace compensation that he forfeited by resigning from his former employer, reports Susan Krashinsky Robertson and David Milstead. Loblaw has faced some recent criticism – backtracking on its decision to cancel 50-per-cent discounts on perishable foods. Some shoppers have also taken to social media to call for a boycott of Loblaw-owned stores.

RBC’s purchase of HSBC Bank Canada accompanied by a complex technological feat

What did it take to close the largest domestic banking takeover on record? Royal Bank of Canada completed its acquisition of HSBC Bank Canada on March 29, and had to move billions of dollars of customer money and data off HSBC’s platforms and onto its own in a single weekend – an unusual technological feat that helped it to win the $13.5-billion auction for the highly coveted business. Stefanie Marotta spoke to RBC executives about the process and how RBC prepared for the complex closing: “There was no other choice. If you wanted to buy the bank, you had to close and convert,” RBC chief executive officer Dave McKay said in an interview.


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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Japan’s SoftBank returns to profit after gains at Vision Fund and other investments

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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.

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Trump campaign promises unlikely to harm entrepreneurship: Shopify CFO

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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.

Companies in this story: (TSX:SHOP)

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RioCan cuts nearly 10 per cent staff in efficiency push as condo market slows

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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.

Companies in this story: (TSX:REI.UN)

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