People line up at a Service Canada office in Montreal on March 19, 2020. Companies in industries ranging from aviation to forestry to the arts have laid off workers to stay viable amid the economic turmoil caused by COVID-19.
Paul Chiasson/The Canadian Press
A half-million Canadian workers filed for Employment Insurance benefits in the past four days alone, as evidence of the deep job losses related to COVID-19 quickly piled up and companies from a wide range of industries announced even more layoffs.
Employment and Social Development Canada said on Friday the department received about 500,000 applications for EI over the past four days, compared with just 27,000 in the same week a year ago.
“Service Canada and many government agencies have received a historic number of calls from concerned Canadians,” Prime Minister Justin Trudeau said at a news conference. “I know people are anxious to get the help they deserve, and our government is working as fast as possible to support them.”
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University of Calgary economist Trevor Tombe noted that 500,000 jobs represents 2.6 per cent of total Canadian employment, in line with the percentage of job losses in July, 1932, the worst month for employment during the Great Depression. “It seems clear to me that this is the sharpest negative shock we’ve ever seen,” he said on Twitter.
Economists at major banks slashed their economic forecasts even further. Scotiabank said the economy will contract at an annualized pace of nearly 11 per cent in the second quarter, and a “recession is now unavoidable.” It forecast the economy will shrink by 2.2 per cent this year, although it projected that growth will rebound by the fourth quarter. Bank of Montreal also lowered its second-quarter call to a 10 per cent contraction.
On Friday, companies in industries ranging from aviation to forestry to the arts laid off workers to stay viable amid the economic turmoil caused by COVID-19.
Just under 2,000 flight attendants at leisure airline Air Transat received layoff notices, said Julie Roberts, a union leader at the Canadian Union of Public Employees, which represents the workers.
Employees are not being paid during the layoffs, which start on April 5, and the notice gives no back-to-work date, Ms. Roberts said. The union is trying to obtain some kind of assistance for workers to help soften the impact, but has not had confirmation that will be offered, she said.
“It’s been a crazy, crazy, past two weeks,” said Ms. Roberts, who is also a flight attendant and is losing her job. “I’m really scared about making ends meet.”
The union is concerned about its members who don’t have enough hours to qualify for unemployment assistance, Ms. Roberts said. Some have been on leaves of absence and maternity leave.
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Conversations about financial assistance are underway between airline companies and all levels of government, said a source familiar with the situation. The Globe and Mail is not identifying the person because he was not authorized to speak to the media.
Political leaders are receptive, but other sectors are also asking for help, and there is no clarity on the timing or size of any aid package, the person said. National Airlines Council of Canada is involved and airlines are making their own individual cases, the person said.
Air Canada is laying off more than 5,100 flight attendants, including 3,600 from its mainline carrier and 1,549 from Air Canada Rouge. “This has been the most challenging time any of us will likely ever experience as flight attendants,” said Wesley Lesosky, who heads the Air Canada component of CUPE. The layoffs, effective Friday, are expected to last until at least April 30, CUPE said.
Aviation manufacturers are scaling back as demand dries up. Longview Aviation Capital Corp. is suspending new production of Dash 8-400 and Series 400 Twin Otter aircraft at facilities in Ontario, Alberta and British Columbia. Nearly 1,000 employees will be affected, the company said, adding that it hopes to restart manufacturing when conditions improve.
The Big Three automakers announced production suspensions across North America this week, and Canadian auto parts suppliers are grappling with the implications. “It’s never good to see the lights go out,” said Flavio Volpe, president of the Automotive Parts Manufacturers’ Association.
Magna International Inc. is starting to suspend production at facilities around the world, with the exception of China, the company said on Thursday. Linamar Corp. is also assessing operations. “Clearly, the news of customer shutdowns this week globally will have an impact,” chief executive Linda Hasenfratz in a statement. “Each facility is developing plans with their customers and communicating to their employees what this means to them, including potential layoffs.”
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The economic devastation of the pandemic is hitting large swaths of the economy, including the arts. The Banff Centre for Arts and Creativity temporarily laid off 400 employees, about 75 per cent of its staff. “This was a difficult choice, but Banff Centre’s viability is our priority,” a statement from the centre said.
West Fraser Timber Co. Ltd. is cutting lumber production in Western Canada and the United States, and suspending plywood production at a facility in B.C. As a result, the company is temporarily laying off employees at six sites, but does not have an exact number yet.
BRP Inc., the Canadian maker of Sea-Doo watercraft and Ski-Doo snowmobiles, suspended its dividend and said it drew down fully a $700-million credit line to prepare for a downturn. The company said it anticipates having to slow production lines or temporarily close facilities as demand slows.
Canadian Imperial Bank of Commerce chief economist Avery Shenfeld, who is preparing to cut his own forecasts early next week, said the prospects for the economy to bounce back depend on when the COVID-19 outbreak can be contained. “How the second half [of 2020] shapes up is really about epidemiology, not economics,” he said.
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TOKYO (AP) — Japanese technology group SoftBank swung back to profitability in the July-September quarter, boosted by positive results in its Vision Fund investments.
Tokyo-based SoftBank Group Corp. reported Tuesday a fiscal second quarter profit of nearly 1.18 trillion yen ($7.7 billion), compared with a 931 billion yen loss in the year-earlier period.
Quarterly sales edged up about 6% to nearly 1.77 trillion yen ($11.5 billion).
SoftBank credited income from royalties and licensing related to its holdings in Arm, a computer chip-designing company, whose business spans smartphones, data centers, networking equipment, automotive, consumer electronic devices, and AI applications.
The results were also helped by the absence of losses related to SoftBank’s investment in office-space sharing venture WeWork, which hit the previous fiscal year.
WeWork, which filed for Chapter 11 bankruptcy protection in 2023, emerged from Chapter 11 in June.
SoftBank has benefitted in recent months from rising share prices in some investment, such as U.S.-based e-commerce company Coupang, Chinese mobility provider DiDi Global and Bytedance, the Chinese developer of TikTok.
SoftBank’s financial results tend to swing wildly, partly because of its sprawling investment portfolio that includes search engine Yahoo, Chinese retailer Alibaba, and artificial intelligence company Nvidia.
SoftBank makes investments in a variety of companies that it groups together in a series of Vision Funds.
The company’s founder, Masayoshi Son, is a pioneer in technology investment in Japan. SoftBank Group does not give earnings forecasts.
Shopify Inc. executives brushed off concerns that incoming U.S. President Donald Trump will be a major detriment to many of the company’s merchants.
“There’s nothing in what we’ve heard from Trump, nor would there have been anything from (Democratic candidate) Kamala (Harris), which we think impacts the overall state of new business formation and entrepreneurship,” Shopify’s chief financial officer Jeff Hoffmeister told analysts on a call Tuesday.
“We still feel really good about all the merchants out there, all the entrepreneurs that want to start new businesses and that’s obviously not going to change with the administration.”
Hoffmeister’s comments come a week after Trump, a Republican businessman, trounced Harris in an election that will soon return him to the Oval Office.
On the campaign trail, he threatened to impose tariffs of 60 per cent on imports from China and roughly 10 per cent to 20 per cent on goods from all other countries.
If the president-elect makes good on the promise, many worry the cost of operating will soar for companies, including customers of Shopify, which sells e-commerce software to small businesses but also brands as big as Kylie Cosmetics and Victoria’s Secret.
These merchants may feel they have no choice but to pass on the increases to customers, perhaps sparking more inflation.
If Trump’s tariffs do come to fruition, Shopify’s president Harley Finkelstein pointed out China is “not a huge area” for Shopify.
However, “we can’t anticipate what every presidential administration is going to do,” he cautioned.
He likened the uncertainty facing the business community to the COVID-19 pandemic where Shopify had to help companies migrate online.
“Our job is no matter what comes the way of our merchants, we provide them with tools and service and support for them to navigate it really well,” he said.
Finkelstein was questioned about the forthcoming U.S. leadership change on a call meant to delve into Shopify’s latest earnings, which sent shares soaring 27 per cent to $158.63 shortly after Tuesday’s market open.
The Ottawa-based company, which keeps its books in U.S. dollars, reported US$828 million in net income for its third quarter, up from US$718 million in the same quarter last year, as its revenue rose 26 per cent.
Revenue for the period ended Sept. 30 totalled US$2.16 billion, up from US$1.71 billion a year earlier.
Subscription solutions revenue reached US$610 million, up from US$486 million in the same quarter last year.
Merchant solutions revenue amounted to US$1.55 billion, up from US$1.23 billion.
Shopify’s net income excluding the impact of equity investments totalled US$344 million for the quarter, up from US$173 million in the same quarter last year.
Daniel Chan, a TD Cowen analyst, said the results show Shopify has a leadership position in the e-commerce world and “a continued ability to gain market share.”
In its outlook for its fourth quarter of 2024, the company said it expects revenue to grow at a mid-to-high-twenties percentage rate on a year-over-year basis.
“Q4 guidance suggests Shopify will finish the year strong, with better-than-expected revenue growth and operating margin,” Chan pointed out in a note to investors.
This report by The Canadian Press was first published Nov. 12, 2024.
TORONTO – RioCan Real Estate Investment Trust says it has cut almost 10 per cent of its staff as it deals with a slowdown in the condo market and overall pushes for greater efficiency.
The company says the cuts, which amount to around 60 employees based on its last annual filing, will mean about $9 million in restructuring charges and should translate to about $8 million in annualized cash savings.
The job cuts come as RioCan and others scale back condo development plans as the market softens, but chief executive Jonathan Gitlin says the reductions were from a companywide efficiency effort.
RioCan says it doesn’t plan to start any new construction of mixed-use properties this year and well into 2025 as it adjusts to the shifting market demand.
The company reported a net income of $96.9 million in the third quarter, up from a loss of $73.5 million last year, as it saw a $159 million boost from a favourable change in the fair value of investment properties.
RioCan reported what it says is a record-breaking 97.8 per cent occupancy rate in the quarter including retail committed occupancy of 98.6 per cent.
This report by The Canadian Press was first published Nov. 12, 2024.
