TORONTO – CIBC’s chief executive offered an impassioned defence of Canada’s banking sector the day after Liberal Leader Justin Trudeau made a campaign pledge to raise the tax rate for the industry.
“Banks have always been in the crosshairs, but what you want is a healthy banking system,” Victor Dodig said during a conference call Thursday to discuss the bank’s quarterly earnings.
“A healthy banking system helps the economy grow,” .
Dodig said he would not comment on specific election promises but wanted to reminded investors of the work banks did during the early days of the outbreak, when they distributed pandemic stimulus funds and deferred on loans for clients. He also noted that most Canadians benefit either directly or indirectly from the dividends and economic growth of the banks.
It’s important that the government policies not discourage foreign investment, said Dodig.
“My great hope is that you don’t have intervention in any particular industry sector, because that doesn’t actually attract foreign capital. We need capital and we need people to come to Canada to make the country stronger and to make the country better.”
On Wednesday, Trudeau proposed raising the corporate income tax rate by three per cent on banks and insurance companies with earnings over $1 billion, which he said had come into “windfall” profits because of economic stimulus measures from the government.
The proposal also includes establishing an unspecified “recovery dividend” for the two industries that would last four years, which together with the tax increase would bring in at least $2.5 billion a year.
“This week, Canada’s biggest banks are posting their latest massive profits of billions of dollars … so as we rebuild, we’re going to ask big financial institutions to pay a little back,” Trudeau said.
CIBC reported earnings of $1.73 billion or $3.76 per diluted share for the quarter ended July 31, up from $1.17 billion or $2.55 per diluted share a year earlier.
The increase came as CIBC reported a $99-million reversal of credit losses for its latest quarter compared with a provision for credit losses of $525 million in the same quarter last year.
On an adjusted basis, CIBC says it earned $3.93 per diluted share, up from an adjusted profit of $2.71 per diluted share a year earlier. Analysts on average had expected the bank to earn $3.41 per share, according to financial market data firm Refinitiv.
On Thursday, CIBC also announced a commitment to reach net zero emissions associated with its operational and financing activities by 2050, and increased its sustainable finance target to $300 billion by 2030.
Dodig said the bank had already ramped up funding on renewable energy projects, now ranked third for North American renewable energy financing for the first half of this year, up from 26th place in 2016.
CIBC will also set up interim targets to reduce the emissions that it helps finance, and will begin reporting on their progress starting next fiscal year, said Dodig.
“The transition to a low-carbon global economy will take meaningful commitment and it’s going to take action from everyone,” he said.
CIBC said its Canadian personal and business banking earned $642 million for the third quarter, up from $457 million a year ago, helped by lower provisions for credit losses and higher revenue, partially offset by higher expenses.
Canadian commercial banking and wealth management reported a profit of $470 million for the quarter compared with $320 million in the same quarter last year, while CIBC’s U.S. commercial banking and wealth management operations earned $266 million, up from a profit of $60 million a year ago.
CIBC’s capital markets business reported net income of $491 million for the third quarter, up from $443 million in the same quarter last year.
This report by The Canadian Press was first published Aug. 26, 2021.
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.
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)
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.
