Nordstrom leaves Canada, why flights cost more for Canadians and rental evictions soar: Must-read business and investing stories

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.

Nordstrom to close all Canadian locations

Seattle-based luxury department store Nordstrom has joined the growing list of U.S. retailers unable to turn a profit in Canada. As Andrew Willis and Jason Kirby reports, Nordstrom Inc. is exiting Canada by closing 13 department stores and laying off 2,500 employees by the end of June, after filing for creditor protection. The company, which entered the Canadian market in 2014, has already shut down its e-commerce platform and plans to hire a liquidator. Among the closures are six Nordstrom and seven Nordstrom Rack across Ontario, Alberta and B.C.

RBC says remote work is bad for productivity

In the debate over employees returning to offices versus working remotely, the head of Royal Bank of Canada has made it clear where he stands. During a conference call to discuss the bank’s first-quarter earnings earlier this week, chief executive officer Dave McKay stated that remote work is stunting productivity and innovation, Stefanie Marotta writes. “Society isn’t back together enough,” he said. “All CEOs in every sector I talk to are struggling with a balance of developing talent, promoting talent, building culture, creating productivity.” Canada’s largest bank employs 97,000 people across Canada and the U.S., as well as at offices in Europe, Asia and Australia. While employees may not need to work in offices five days a week, McKay believes that companies likely need workers to show up in person more than current levels. Hybrid work models are also affecting commercial real estate, as demand for office space continues to fall.

As rents soar, evictions rise

With Ontario’s chronic rental shortage driving up prices, landlords in the province are increasingly trying to evict their tenants and take possession of those units. As Matt Lundy reports, the Landlord and Tenant Board, which adjudicates rental-housing disputes in the province, received more than 5,550 eviction applications in 2022, an increase of 41 per cent from the previous year. The surge in “own-use” filings is being driven by communities outside of Toronto. While it’s unlikely that over a year, suddenly more landlords and their family members just feel like moving, the surge may be attributed to landlords who are looking for higher rents. Most people who rent homes in the province are covered by rent control, which holds landlords to modest annual increases. But when units are vacated, landlords can sign leases with new tenants at whatever rents the market will bear.

Canadian passengers can expect to pay more for flights

Canadian travelers planning to book summer flights may be in for a rude awakening, all thanks to airlines’ dynamic pricing. While the practice isn’t new, as Erica Alini explains, it’s a lesser-known strategy reflecting that different geographical markets may have different demand and affordability thresholds for the same flight itinerary. For instance, a Calgary resident recently noticed upon entering his Canadian credit card details on the U.S. version of the United Airlines website that the ticket price of US$968 that he’d been eyeing had turned into a $1,774 charge in Canadian funds – nearly $500 more than what the fare would have been according to the market exchange rate. The two fares reflected a different availability of tickets available for purchase on the Canadian version of the website compared with the U.S. version, United said.

One-fifth of CIBC mortgage borrowers seeing loan balances grow

Twenty per cent of Canadian Imperial Bank of Commerce mortgage holders are seeing their loan balances grow, as rising interest rates make it harder for them to pay off their homes, Rachelle Younglai reports. New data from CIBC show that $52-billion worth of mortgages were in a position where the borrower’s monthly payment was not high enough to cover even the interest portion of the loans. The bank has allowed these borrowers to stretch out the length of the amortization period and add unpaid interest onto their original loan or principal. Homeowners on variable-rate mortgages have been under pressure because of the jump in interest rates over the past year. These same borrowers also face greater risk when it comes time to renew their mortgages and their amortization periods are required to shrink back to the lengths of time specified in the original contracts.

Introducing the Globe Investing Club

As any professional money manager and hard-working financial journalist would tell you: Stocks are painfully hard to predict. Yet, the Globe Investor team loves to try, and like many people, they enjoy chatting about promising stocks and speculating about which ones will do best. That’s why they’re launching the Globe Investing Club, with a Hot List of promising or interesting stocks. If you already have a well-diversified portfolio and are looking to add a couple of individual stocks, the Hot List can offer some starting points for your own research. Or you can see the Hot List as a fun test of how good a prognosticator you are – and we invite you to submit your own. We’ll collect our readers’ picks and use them to form a Readers’ List of stocks, and deliver updates on how both lists are performing against each other and the market throughout the year.

Sign up for MoneySmart Bootcamp: If you want to improve your financial fitness, The Globe’s MoneySmart Bootcamp newsletter course is for you. This new five-part course written by personal finance reporter Erica Alini will improve your personal finance skills, including budgeting, borrowing and investing. Subscribe to the MoneySmart Bootcamp and you’ll receive an e-mail a week to work a different financial muscle. Lessons will land in your inbox Wednesday afternoons.

Now that you’re all caught up, prepare for the week ahead with The Globe’s investing calendar.

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