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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Telus prioritizing ‘most important customers,’ avoiding ‘unprofitable’ offers: CFO

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Telus Corp. says it is avoiding offering “unprofitable” discounts as fierce competition in the Canadian telecommunications sector shows no sign of slowing down.

The company said Friday it had fewer net new customers during its third quarter compared with the same time last year, as it copes with increasingly “aggressive marketing and promotional pricing” that is prompting more customers to switch providers.

Telus said it added 347,000 net new customers, down around 14.5 per cent compared with last year. The figure includes 130,000 mobile phone subscribers and 34,000 internet customers, down 30,000 and 3,000, respectively, year-over-year.

The company reported its mobile phone churn rate — a metric measuring subscribers who cancelled their services — was 1.09 per cent in the third quarter, up from 1.03 per cent in the third quarter of 2023. That included a postpaid mobile phone churn rate of 0.90 per cent in its latest quarter.

Telus said its focus is on customer retention through its “industry-leading service and network quality, along with successful promotions and bundled offerings.”

“The customers we have are the most important customers we can get,” said chief financial officer Doug French in an interview.

“We’ve, again, just continued to focus on what matters most to our customers, from a product and customer service perspective, while not loading unprofitable customers.”

Meanwhile, Telus reported its net income attributable to common shares more than doubled during its third quarter.

The telecommunications company said it earned $280 million, up 105.9 per cent from the same three-month period in 2023. Earnings per diluted share for the quarter ended Sept. 30 was 19 cents compared with nine cents a year earlier.

It reported adjusted net income was $413 million, up 10.7 per cent year-over-year from $373 million in the same quarter last year. Operating revenue and other income for the quarter was $5.1 billion, up 1.8 per cent from the previous year.

Mobile phone average revenue per user was $58.85 in the third quarter, a decrease of $2.09 or 3.4 per cent from a year ago. Telus said the drop was attributable to customers signing up for base rate plans with lower prices, along with a decline in overage and roaming revenues.

It said customers are increasingly adopting unlimited data and Canada-U.S. plans which provide higher and more stable ARPU on a monthly basis.

“In a tough operating environment and relative to peers, we view Q3 results that were in line to slightly better than forecast as the best of the bunch,” said RBC analyst Drew McReynolds in a note.

Scotiabank analyst Maher Yaghi added that “the telecom industry in Canada remains very challenging for all players, however, Telus has been able to face these pressures” and still deliver growth.

The Big 3 telecom providers — which also include Rogers Communications Inc. and BCE Inc. — have frequently stressed that the market has grown more competitive in recent years, especially after the closing of Quebecor Inc.’s purchase of Freedom Mobile in April 2023.

Hailed as a fourth national carrier, Quebecor has invested in enhancements to Freedom’s network while offering more affordable plans as part of a set of commitments it was mandated by Ottawa to agree to.

The cost of telephone services in September was down eight per cent compared with a year earlier, according to Statistics Canada’s most recent inflation report last month.

“I think competition has been and continues to be, I’d say, quite intense in Canada, and we’ve obviously had to just manage our business the way we see fit,” said French.

Asked how long that environment could last, he said that’s out of Telus’ hands.

“What I can control, though, is how we go to market and how we lead with our products,” he said.

“I think the conditions within the market will have to adjust accordingly over time. We’ve continued to focus on digitization, continued to bring our cost structure down to compete, irrespective of the price and the current market conditions.”

Still, Canada’s telecom regulator continues to warn providers about customers facing more charges on their cellphone and internet bills.

On Tuesday, CRTC vice-president of consumer, analytics and strategy Scott Hutton called on providers to ensure they clearly inform their customers of charges such as early cancellation fees.

That followed statements from the regulator in recent weeks cautioning against rising international roaming fees and “surprise” price increases being found on their bills.

Hutton said the CRTC plans to launch public consultations in the coming weeks that will focus “on ensuring that information is clear and consistent, making it easier to compare offers and switch services or providers.”

“The CRTC is concerned with recent trends, which suggest that Canadians may not be benefiting from the full protections of our codes,” he said.

“We will continue to monitor developments and will take further action if our codes are not being followed.”

French said any initiative to boost transparency is a step in the right direction.

“I can’t say we are perfect across the board, but what I can say is we are absolutely taking it under consideration and trying to be the best at communicating with our customers,” he said.

“I think everyone looking in the mirror would say there’s room for improvement.”

This report by The Canadian Press was first published Nov. 8, 2024.

Companies in this story: (TSX:T)

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

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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

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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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