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Calgary Mayor Jyoti Gondek looks back at 2022

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With the year coming to a close, Calgary Mayor Jyoti Gondek said she is focused on advancing the city’s economy and addressing social issues in the city in the upcoming year.

Speaking to Global News on Friday, Gondek said she is committed to the council’s downtown revitalization strategy to create a vibrant urban centre in the middle of the city.

The strategy will include converting thousands of former office spaces into residential units, which will not only drive the local economy but also address housing insecurity in the city. Gondek estimated that 777,000 square feet of former office spaces will be converted into approximately 700 residential units.

“We endorsed the downtown revitalization strategy back in 2021 and it was a partnership between many stakeholder groups. There were business owners, downtown advocates and our own administration,” Gondek told Global Calgary anchor Linda Olsen.

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“They said investing money now would help us recover, and we stayed true to that mission and that vision.

“That’s a big change for us because downtown was primarily a place to work. Now it’s going to be a place where more people are living and it’s going to be more active… That’s meaningful to any city.”

Gondek also talked about safety concerns on public transit and downtown areas, which will also be acknowledged in the downtown revitalization strategy.

A recent ThinkHQ Public Affairs survey found that a majority of Calgarians perceive the city as less safe than it was three years ago. Around 53 per cent of 1,172 Calgarians surveyed said they feel less safe in the city, and 48 per cent of those surveyed felt that crime is high in the city today.

“(Projects like these) also get interest from government partners. I know the federal government is interested in seeing how they can assist with some of the revitalization plan,” the mayor said.

“The provincial government announced they would invest almost $200 million between Calgary and Edmonton to make transit safer and to help vulnerable people get to a better place.

“All of that impacts downtown and a growing city.”

Foreign investors interested in Calgary, said mayor

Canadian investors aren’t the only people who are interested in establishing business relations in Calgary, Gondek said.

Foreign investors, such as the U.S.’ film and television industry, are interested in setting up shop in the city as well.

Gondek said she spent much of the last year promoting Calgary’s economic development, tourism and business opportunities.

“We really try to get the word out about what Calgary has to offer not only from a visitor’s perspective but as a place to locate your business and bring people to live here,” she said.

“We have gone out to Toronto to talk about how (the tech industry) has taken off in Calgary, and I think we’ve been successful because we’re not talking about tech as a sector but how they are the new face of business in Calgary.”

The mayor also took a trip to Los Angeles this year to talk to film executives about producing movies and TV shows in and around the city. The upcoming HBO show The Last of Us was filmed in Calgary and other parts of Alberta.

“Most people down there know that we have film crews. We have on-camera and behind-the-scenes talent and we have the infrastructure that’s needed (to produce those films). It’s just promoting who we are,” Gondek said.

But a core part of those meetings is trying to rebrand the city’s image away from just cowboys and Stampede.

“I think the important thing for Calgary is to embrace the fact that we are diverse. There are many faces of Calgary. We’re the third most diverse city in this nation and most people don’t know that,” she said.

“It’s important to have different voices telling our story. It is a great idea to have someone who’s young and a newcomer to Canada saying that they feel welcome and that they belong here.

“It’s also equally important to have someone who’s had generations of family in this city say that they stayed here because it’s a great place to live. All of those voices need to be heard.”

Inflation is a huge concern

Despite the ambitious projects and goals for the next year, Gondek acknowledged that inflation is a huge concern for Calgarians who are looking to pay more in property taxes in the city’s upcoming four-year budget.

Property taxes will see an average annual increase of 3.7 per cent over the four-year term of the 2023-2026 budget, which was passed in November. The average single-family home in Calgary will see a property tax increase of 5.2 per cent next year, or $9.83 a month.

But Gondek said the city is looking to the federal and provincial governments for help funding projects such as the bus electrification strategy, which aims to replace up to 250 diesel buses with zero- and low-emission vehicles at the end of their life cycle starting in 2023.

City staff said they have filed an application to the Canada Infrastructure Bank for a $168 million loan, along with a $223 million grant from Canada Zero Emission Transit Fund (ZETF). The city will fund the remaining $100 million, staff said.

“The beauty of making this switch from diesel to the electric fleet is the savings and operations will actually pay for that conversion and it’ll pay the loan and the interest. We’ll be making a clean shift that pays for itself,” Gondek said.

Gondek also said the city is looking to re-evaluate how much property taxes businesses will have to pay. A decision will be made early next year.

“A few years back, roughly 55 per cent of the responsibility of the budget was on the business sector. We rectified that situation a few years back and we changed it to 48 per cent,” she said.

“But only 20 per cent of the revenue that’s generated from property taxes comes from these businesses, and when you consider that 95 per cent of our businesses are small businesses, they do need more equitable treatment.”

Alberta’s Sovereignty Act may be a challenge

Alberta’s new sovereignty act may propose a challenge for the city, Gondek said.

Bill 1, otherwise known as the Alberta Sovereignty Within A United Canada Act, was given royal assent on Dec. 15 by Lt.-Gov. Salma Lakhani. Premier Danielle Smith had promised to pass the sovereignty bill throughout her leadership campaign to push back on what Alberta believes is unconstitutional federal interference on provincial matters.

But the bill has received harsh criticism from members of the Opposition and Albertans. Most notably, Onion Lake Cree Nation has taken legal action against Alberta over the bill, arguing it breaches treaty and constitutional rights.

Gondek said the bill puts Calgary in an unfavourable position.

“The province is trying to deliver a message to the federal government that if you don’t engage with us in a meaningful way, we don’t wish to have laws enforced upon us that we believe are unfair. In that same vein, I would say that municipalities need to be heard by the province,” she said.

“We have asked for a long time to have a more fair deal for the city. To only have property tax as our certainty and predictability of revenue is really detrimental to our citizens.”

Gondek also said the city may be asked to defy federal orders as a result of Bill 1.

“If the provincial government says it doesn’t want us to do what the federal government is saying, we’re stuck in the middle, almost like two parents arguing and whatever decision we make will be the wrong decision for one order of government. That’s a very untenable position for us,” she added.

Mayor looking forward to a new year

But despite the challenges, Gondek said the past year has been a great lesson for her and her colleagues even though she got hate and harassment from constituents.

As the first female mayor of Calgary, Gondek said her experience has been “interesting.”

“One of the most meaningful things we’ve done as a council is use process and diligence to our advantage. We have said that this is how we do proper civil discourse,” she said.

“I think that type of structure and willingness to work together has been positive for us, even when we don’t agree with each other. When you are seen and heard and you’re able to vote in a disciplined way, you can still get the job done.”

Gondek encourages Calgarians to be compassionate and kind to each other going into the new year.

“I know it’s been tough, and I know you have been patient as we are coming out of some pretty tough times and I want to thank everyone for persevering through it,” she said.

“Let’s continue to be kind and compassionate to each other. There are great things on the horizon and we are heading that way together.”

–With files from Global News’ Adam MacVicar, Adam Toy and Meaghan Archer.

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Weaker Orders, Investment Underscore Ailing US Manufacturing – Yahoo Canada Finance

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(Bloomberg) — US manufacturing showed more signs this week of succumbing to the Federal Reserve’s aggressive interest-rate hikes that are taking a bigger bite out of demand and risk upending the economic expansion.

Most Read from Bloomberg

The government’s first estimate of gross domestic product for the fourth quarter and a report on December factory orders for durable goods pointed to sizable downshifts in both spending on business equipment and bookings for core capital goods.

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The durable goods report Thursday showed orders for nondefense capital goods excluding aircraft — a proxy for business investment — dropped 0.2% in December after no change a month earlier. Over the fourth quarter, bookings for these core capital goods posted the weakest annualized gain since 2020. Shipments, an input for GDP, decreased for the third time in four months.

“Taken in tandem with the output data where industrial production has declined in six of the past eight months, it is increasingly evident that the manufacturing recession is well underway,” Wells Fargo & Co. economists Tim Quinlan and Shannon Seery said in a note to clients.

Also on Thursday, the GDP report showed outlays for business equipment dropped an annualized 3.7%, the largest slide since the immediate aftermath of the pandemic. That decline was part of a broader demand slowdown, which included a smaller-than-forecast advance in personal spending.

While GDP growth beat expectations, details of the report that offer a clearer picture of domestic demand were decidedly weak. Inflation-adjusted final sales to private domestic purchasers, which strip out inventories and net exports while excluding government spending, rose at a paltry 0.2% rate — also the weakest since the second quarter of 2020.

Last month’s retreat in core capital goods orders indicates manufacturing output, which already registered sharp declines in the final two months of 2022, may struggle to gain traction this quarter.

Read more: Weak US Retail Sales, Factory Data Heighten Recession Concerns

The slump in housing is also spilling over into producers of non-durable goods. Shares of Sherwin-Williams Co. tumbled this week after the paintmaker pointed to pressures stemming from a weak residential real estate market and inflation.

“We currently see a very challenging demand environment in 2023 and visibility beyond our first half is limited,” Chief Executive Officer John Morikis said on a Jan. 26 earnings call. “The Fed has also been quite clear about its intention to slow down demand in its effort to tame inflation.”

An accumulation of inventories only adds to the headwinds. Inventory building accounted for about half of the 2.9% annualized increase in fourth-quarter GDP. For the year as a whole, inventories grew $123.3 billion, the most since 2015.

With demand moderating, there’s less incentive to ramp up orders or production as companies make greater efforts to sell from existing stock.

In addition to the aforementioned data, the latest surveys of manufacturers show sustained weakness. Measures of orders at factories in four regional Fed surveys have all indicated multiple months of contraction.

All surveys released so far for this month are consistent with an overall contraction in activity that extends back through most of the second half of 2022.

Next week, the Institute for Supply Management will issue its January manufacturing survey and economists project a third-straight month of shrinking activity.

Most Read from Bloomberg Businessweek

©2023 Bloomberg L.P.

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Canada expected to buck trend of big investment banking layoffs – Reuters

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TORONTO, Jan 26 (Reuters) – Some of Canada’s top investment banks plan to maintain staffing levels to meet client expectations for the same level of coverage through the ups and downs of business cycles, head hunters and industry executives said.

U.S. investment banks, including Goldman Sachs (GS.N), began cutting over 3,000 employees on Jan. 11 citing a challenging macroeconomic environment, raising fears Canadian banks may follow suit. Like their global peers, many Canadian investment banks had staffed up during the pandemic only to see dealmaking slow last year.

At Royal Bank of Canada (RY.TO), the country’s biggest lender, for instance, headcount at its capital markets division jumped by 71% over the two years ending Oct. 31, 2022 to 6,887 employees.

But in the meantime Canadian dealmaking fell 39.7% last year to $89.7 billion. That is more than the 36% drop in global deal values to $3.8 trillion following a stellar 2021, according to data from Dealogic.

Yet, Canadian banks have not announced layoffs and some even say they may increase headcount, though dealmaking in the new year is down nearly 50% to $3.2 billion from a year ago, according to Dealogic.

“Right now there is a sense that there isn’t a need for cuts in the system,” Dominique Fortier, partner at recruitment firm Heidrick & Struggles’ Toronto office, told Reuters.

“When there was an upswing in 2021, it happened so quickly that there was no corresponding increase in hiring and so I don’t see that we’ll have the same decrease in terms of headcount coming.”

Toronto Dominion Bank (TD.TO), which last year agreed to buy New York-based boutique investment bank Cowen Inc (COWN.O), expects to continue to grow its global investment banking business as it work towards closing the deal, a spokesperson said.

Desjardins, another Canadian lender, will continue to invest in its growing capital markets division, a spokesperson said.

EXPENSIVE PROPOSITION

Bill Vlaad, a Toronto-based recruiter who specializes in the financial services sector, said that while there was some nervousness around the stability of investment banking teams, Canada is unlikely to see U.S.-level redundancies aside from the annual cull of poor performers called “maintenance layoffs.”

“The U.S. is very nimble. They will go in and out of hotspots very quickly. Canada doesn’t have that same luxury and has to stay relatively consistent in coverage,” said Vlaad.

“You have a consistent group of people working…and they don’t fluctuate all that much year to year, decade to decade.”

But another down year for dealmaking could see bonuses taking a hit.

RBC, which was ranked No. 2 in Canada M&A, equity capital markets and debt capital markets last year according to Dealogic, has no layoff plans for investment banking in Canada, a source with knowledge of the matter said.

Spokespeople for JP Morgan, which topped the M&A league table last year, Scotiabank (BNS.TO) and Canadian Imperial Bank of Commerce (CM.TO) declined to comment. BMO did not respond to requests for comment.

Headhunters and lawyers say it’s less expensive to lay off bankers in the United States compared to Canada.

Howard Levitt, senior partner at employment law firm Levitt Sheikh, said Canadian investment banking employees would be entitled to somewhere between four and 27 months severance with full remuneration depending on their status, re-employability, age and length of service.

Reporting by Maiya Keidan
Editing by Denny Thomas and Deepa Babington

Our Standards: The Thomson Reuters Trust Principles.

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Weaker Orders, Investment Underscore Ailing US Manufacturing – BNN Bloomberg

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(Bloomberg) — US manufacturing showed more signs this week of succumbing to the Federal Reserve’s aggressive interest-rate hikes that are taking a bigger bite out of demand and risk upending the economic expansion.

The government’s first estimate of gross domestic product for the fourth quarter and a report on December factory orders for durable goods pointed to sizable downshifts in both spending on business equipment and bookings for core capital goods.

The durable goods report Thursday showed orders for nondefense capital goods excluding aircraft — a proxy for business investment — dropped 0.2% in December after no change a month earlier. Over the fourth quarter, bookings for these core capital goods posted the weakest annualized gain since 2020. Shipments, an input for GDP, decreased for the third time in four months.

300x250x1

“Taken in tandem with the output data where industrial production has declined in six of the past eight months, it is increasingly evident that the manufacturing recession is well underway,” Wells Fargo & Co. economists Tim Quinlan and Shannon Seery said in a note to clients.

Also on Thursday, the GDP report showed outlays for business equipment dropped an annualized 3.7%, the largest slide since the immediate aftermath of the pandemic. That decline was part of a broader demand slowdown, which included a smaller-than-forecast advance in personal spending.

While GDP growth beat expectations, details of the report that offer a clearer picture of domestic demand were decidedly weak. Inflation-adjusted final sales to private domestic purchasers, which strip out inventories and net exports while excluding government spending, rose at a paltry 0.2% rate — also the weakest since the second quarter of 2020.

Last month’s retreat in core capital goods orders indicates manufacturing output, which already registered sharp declines in the final two months of 2022, may struggle to gain traction this quarter.

Read more: Weak US Retail Sales, Factory Data Heighten Recession Concerns

The slump in housing is also spilling over into producers of non-durable goods. Shares of Sherwin-Williams Co. tumbled this week after the paintmaker pointed to pressures stemming from a weak residential real estate market and inflation.

“We currently see a very challenging demand environment in 2023 and visibility beyond our first half is limited,” Chief Executive Officer John Morikis said on a Jan. 26 earnings call. “The Fed has also been quite clear about its intention to slow down demand in its effort to tame inflation.”

An accumulation of inventories only adds to the headwinds. Inventory building accounted for about half of the 2.9% annualized increase in fourth-quarter GDP. For the year as a whole, inventories grew $123.3 billion, the most since 2015.

With demand moderating, there’s less incentive to ramp up orders or production as companies make greater efforts to sell from existing stock.

In addition to the aforementioned data, the latest surveys of manufacturers show sustained weakness. Measures of orders at factories in four regional Fed surveys have all indicated multiple months of contraction. 

All surveys released so far for this month are consistent with an overall contraction in activity that extends back through most of the second half of 2022. 

Next week, the Institute for Supply Management will issue its January manufacturing survey and economists project a third-straight month of shrinking activity.

©2023 Bloomberg L.P.

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