The Canadian economy lost momentum after a roaring start to the year, reinforcing economists’ expectations that the Bank of Canada is on track to cut interest rates in the coming months.
Statistics Canada reported Tuesday that real gross domestic product rose 0.2 per cent in February. That followed a 0.5 per cent gain in January.
“Today’s GDP report confirmed our expectations that the January surge in output was temporary, and in no way marked an inflection point for the growth backdrop in Canada that remains very weak,” said RBC economist Claire Fan in a client note.
Looking ahead, the federal agency says its advance estimate for March indicated that real GDP was essentially unchanged for the month.
Based on the preliminary figure, the Canadian economy grew at an annualized rate of 2.5 per cent in the first quarter of 2024.
Although the economy continues to expand, economists say the latest data reinforces the idea that the growth is sluggish as higher interest rates weigh on consumer and business spending decisions.
That will likely land as good news for the Bank of Canada, which is looking for continued evidence that the economy and inflation are responding to tighter monetary policy.
Governor Tiff Macklem said earlier this month that the central bank is already seeing the right conditions to begin lowering its policy rate from five per cent. But he said he wants to see those conditions sustained to ensure inflation is in fact heading down to the bank’s two per cent target.
“The loss of momentum as the quarter progressed is the bigger takeaway from this report. That puts additional pressure on the BoC to begin cutting as soon as June,” wrote BMO’s Benjamin Reitzes, managing director of Canadian rates and macro strategist.
The sluggishness in the Canadian economy is also evident in the labour market, where job creation has lagged population growth. In March, the unemployment rate jumped to 6.1 per cent.
Reitzes cautioned in his client note, however, that a June rate cut still depends on April inflation data, which is set to be released in a few weeks.
Canada’s inflation rate came in at 2.9 per cent in March, up slightly from the previous month.
Statistics Canada’s report on Tuesday shows 12 of 20 sectors showed growth in February.
Services-producing industries increased 0.2 per cent, helped by the transportation and warehousing sector which increased 1.4 per cent, as rail transportation grew 5.5 per cent with activity returning to normal after freezing temperatures in January in Western Canada.
Air transportation also increased 4.8 per cent in February, driven by growth in international travel as some airlines increased capacity to Asia.
Statistics Canada said goods-producing industries were essentially unchanged.
The mining, quarrying, and oil and gas extraction sector grew 2.5 per cent in February as oil and gas extraction increased 3.3 per cent, partially offsetting a contraction in January. Mining and quarrying (except oil and gas) rose 1.9 per cent.
The utilities sector contracted 2.6 per cent, while the manufacturing sector fell 0.4 per cent.
This report by The Canadian Press was first published April 30, 2024.
TORONTO – Cineplex Inc. reported a loss in its latest quarter compared with a profit a year ago as it was hit by a fine for deceptive marketing practices imposed by the Competition Tribunal.
The movie theatre company says it lost $24.7 million or 39 cents per diluted share for the quarter ended Sept. 30 compared with a profit of $29.7 million or 40 cents per diluted share a year earlier.
The results in the most recent quarter included a $39.2-million provision related to the Competition Tribunal decision, which Cineplex is appealing.
The Competition Bureau accused the company of misleading theatregoers by not immediately presenting them with the full price of a movie ticket when they purchased seats online, a view the company has rejected.
Revenue for the quarter totalled $395.6 million, down from $414.5 million in the same quarter last year, while theatre attendance totalled 13.3 million for the quarter compared with nearly 15.7 million a year earlier.
Box office revenue per patron in the quarter climbed to $13.19 compared with $12 in the same quarter last year, while concession revenue per patron amounted to $9.85, up from $8.44 a year ago.
This report by The Canadian Press was first published Nov. 6, 2024.
TORONTO – Restaurant Brands International Inc. reported net income of US$357 million for its third quarter, down from US$364 million in the same quarter last year.
The company, which keeps its books in U.S. dollars, says its profit amounted to 79 cents US per diluted share for the quarter ended Sept. 30 compared with 79 cents US per diluted share a year earlier.
Revenue for the parent company of Tim Hortons, Burger King, Popeyes and Firehouse Subs, totalled US$2.29 billion, up from US$1.84 billion in the same quarter last year.
Consolidated comparable sales were up 0.3 per cent.
On an adjusted basis, Restaurant Brands says it earned 93 cents US per diluted share in its latest quarter, up from an adjusted profit of 90 cents US per diluted share a year earlier.
The average analyst estimate had been for a profit of 95 cents US per share, according to LSEG Data & Analytics.
This report by The Canadian Press was first published Nov. 5, 2024.
ST. JOHN’S, N.L. – Fortis Inc. reported a third-quarter profit of $420 million, up from $394 million in the same quarter last year.
The electric and gas utility says the profit amounted to 85 cents per share for the quarter ended Sept. 30, up from 81 cents per share a year earlier.
Fortis says the increase was driven by rate base growth across its utilities, and strong earnings in Arizona largely reflecting new customer rates at Tucson Electric Power.
Revenue in the quarter totalled $2.77 billion, up from $2.72 billion in the same quarter last year.
On an adjusted basis, Fortis says it earned 85 cents per share in its latest quarter, up from an adjusted profit of 84 cents per share in the third quarter of 2023.
The average analyst estimate had been for a profit of 82 cents per share, according to LSEG Data & Analytics.
This report by The Canadian Press was first published Nov. 5, 2024.
