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Price of oil dips below $50 for first time in more than a year – CBC.ca

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The price for a barrel of oil dipped below $50 US a barrel for the first time since January 2019 on Monday. The coronavirus that has emerged from China is causing traders to fear for the impact on the economy.

A barrel of West Texas Intermediate briefly traded as low as $49.92 a barrel on Monday morning, the lowest level on record for the North American oil benchmark in more than a year. Less than a month ago, WTI was going for more than $63 a barrel, before gloom set in.

The main catalyst for the sell off was the coronavirus, which has reduced demand for jet fuel because of the cancellations of more than 3,000 flights a day in and out of China, but also because of fears that the contagion could spread into the broader economy.

“The market has clearly adopted a sell first, ask questions later approach to the coronavirus,” RBC analyst Michael Chan said in a note to clients Monday.

China’s economy typically consumes about 14 million barrels per day, about one sixth of world demand. Bloomberg reported Monday that a slew of flight cancellations amid health care officials attempt to stop the spread of the virus have reduced Chinese demand for oil by as much as three million barrels per day (bpd).

“Pricing at multi-year lows is a clear indication of rapidly slowing regional jet fuel demand,” Chan said. “Expect further weakness if flight cancellations continue to proliferate in large size.”

Reuters reported Monday that the Organization of the Petroleum Exporting Countries (OPEC) and its allies, a group known as OPEC+, are considering a further 500,000 bpd cut to their oil production in the wake of reduced Chinese demand.

West Texas Intermediate isn’t the only oil blend hit hard. The type of crude oil that comes from Canada’s oilsands, known as Western Canada Select, is trading at just over $30 a barrel on Monday.

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Pot shop owners worry they'll lose customers if halt on OCS deliveries stretches on – CBC.ca

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Pot shop owners say they’re worried they will lose customers and run out of product if a halt on Ontario Cannabis Store deliveries stretches on and consumers turn to the illicit market.

The stores said Tuesday they have been left with no other choice but to make do with the stock they have after the provincial pot distributor informed them Monday that a cyberattack faced by one of its logistics partners had left it unable to process or deliver orders to marijuana shops and customers.

“I don’t like to order massive quantities of any one thing because I rotate a lot of things through, so when I get disrupted, it means that the shelves are going to be bare,” said Elisa Keay of K’s Pot Shop in Toronto.

“It means that some customers are going to come in, shake their head, upset they’re not getting what they want and they’re going to go somewhere else because they don’t want to hear that it’s not my fault … and there was a cyberattack.”

The OCS has said there is no indication that its systems were targeted or its customers’ information was compromised during the Aug. 5 attack on the parent company of its third-party distribution centre, Domain Logistics, but deliveries were stopped “out of an abundance of caution to protect OCS and its customers.”

Domain Logistics has not responded to a request for comment and the OCS has not offered a timeline for how soon it could restart deliveries, but promised to provide an update later Tuesday.

A worker examines cannabis products at the Ontario Cannabis Store distribution centre. The OCS said Monday evening there is no indication that its systems were targeted or its customers’ information compromised during the Aug. 5 attack on the parent company of its third-party distribution centre, Domain Logistics. (The Canadian Press)

The timing is terrible for Keay. In recent weeks, she’s seen an uptick in sales, but not getting a delivery, means she’s selling through items quicker and will be more likely to have to turn customers away, if products aren’t sent to her store.

Like all other cannabis stores in the province, she also can’t seek cannabis elsewhere because the roughly 1,333 licensed pot stores in Ontario must buy the products they sell from the government-backed OCS.

“When you’re my only wholesaler and you’ve got a firm grasp on who can get delivery and when we can get delivery, it leaves us zero options,” Keay said.

“We’re totally at their mercy.”

Small businesses ‘freaking out’ 

With no idea when deliveries could restart, High Tide Inc. has begun reallocating inventory from its lower volume Canna Cabana shops to higher volume ones, said senior vice-president of corporate and public affairs Omar Khan, in an email.

But independent businesses with single locations can’t model that behaviour, pointed out Sean Kady, co-owner of Cosmic Charlies, a Toronto pot shop.

Independents are also less likely to have a big stockpile because most don’t place huge orders.

“They’re on a more tight, fixed budget, so from week to week, we can only spend so much and if you’re not getting that product that you need, what are you supposed to do and how are you supposed to pay the rent?” he said.

While his store was almost “overstocked” on Tuesday, he’s heard of other retailers “freaking out and pulling their hair out” because of their dwindling supplies.

The situation has created trouble for Lisa Bigioni, who owns the Stok’d cannabis chain.

She estimates she has enough marijuana to keep her stores stocked for a week but worries about the halt on deliveries continuing past that.

Chocolate edibles available for authorized retailers are displayed at the Ontario Cannabis Store in Toronto. The Ontario Cannabis Store told stores Monday that a cyberattack faced by one of its logistics partners had left it unable to process or deliver orders to marijuana shops and customers. (Tijana Martin/The Canadian Press )

She’s also had to put a weekend opening of a new store complete with a barbeque and parking lot games on hold because she’s unsure when product will arrive.

“We put a lot of time and effort into planning the grand opening … and all of that is going to have to be rescheduled,” she said.

Cameron Brown, vice president of The Retail Cannabis Council of Ontario, says this halt in deliveries could cause a “significant shortage of cannabis in Ontario” if it continues throughout the week.

“The next worry for a lot of retailers is when their next inventory shipment is going to come from to get through not only this week but another big weekend in August — one of the busiest times so far in cannabis.” 

OSC waiving delivery fees until Sept. 30 

An OCS letter to retailers obtained by The Canadian Press said “as a goodwill gesture,” the OCS will waive retailer delivery fees until Sept. 30 and a $500 processing fee for one emergency order per store between Sept. 1 and March 31, 2023.

But many shop owners don’t feel that’s commensurate to the risk their businesses are facing.

Keay feels if customers don’t find the products they want at their store, they’ll go elsewhere — a rival shop in Ontario’s crowded market or even to an illicit dispensary or dealer that the industry has been fighting against since recreational marijuana was legalized.

A customer that finds another option might be lost forever, so Keay said, “There’s no sort of compensation that can fix damaging someone’s business.”

This incident follows an OCS announcement May 11 that the Ontario Provincial Police were investigating the “misappropriation” of confidential store sales data.

That breach “was no failure of IT security or systems,” the OCS said, after it quickly launched an investigation to identify the source, restricted access to internal data reports and notified the police.

Both breaches came amid heightened competition in Ontario’s cannabis industry, which has seen the number of pot shops explode in recent months.

Many predict store closures are on their way because demand for cannabis has not increased at the same rate as shop openings, the illicit market remains strong and stores are consistently having to reduce their margins as rivals steadily drop prices.

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RBC warns house price correction could be deepest in decades | CTV News – CTV News Toronto

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A housing correction, which has already led to four consecutive months of price declines in the previously overheated Greater Toronto Area market, could end up becoming “one of the deepest of the past half a century,” a new report from RBC warns.

New data released by the Toronto Regional Real Estate Board (TRREB) last week revealed that the average benchmark price for a home in the GTA fell six per cent month-over-month in July to $1,074,754.

Sales were also down a staggering 47 per cent from July, 2021.

In a report published on Aug. 4, RBC Senior Economist Robert Hogue said recent data from real estate boards underlines that higher interest rates are beginning to take a “huge toll” on the market.

Hogue said that with further hikes to come, prices will likely continue to slide in the coming months.

That prediction, it should be noted, goes against a report from Royal LePage last month which painted a rosier forecast for sellers in which values would more or less holding for the rest of the year following some declines in the second quarter.

“Our expectations for further hikes by the Bank of Canada—another 75 basis points to go in the overnight rate by the fall— will keep chilling the market in the months ahead,” Hogue said. “We expect the downturn to intensify and spread further as buyers take a wait-and-see approach while ascertaining the impact of higher lending rates. Canada’s least affordable markets Vancouver and Toronto, and their surrounding regions, are most at risk in light of their excessively stretched affordability and outsized price gains during the pandemic.”

The Bank of Canada has hiked the overnight lending rate by 225 basis points since March and has warned that further hikes will be necessary given that inflation remains at a near 40-year high.

In his report, Hogue pointed out that the housing correction “now runs far and wide across Canada” but he said that it is particularly pronounced in the costlier markets of Toronto and Vancouver.

In fact, Hogue said that housing resale activity in Toronto is at its slowest pace in 13 years, outside of the early days of the COVID-19 pandemic.

The stockpile of available homes is also up 58 per cent from a year ago, he noted.

“With more options to choose from and higher interest rates shrinking their purchasing budgets, buyers are able to extract meaningful price concessions from sellers,” he said, pointing out that the average price of a home in the GTA is down 13 per cent from March. “We expect buyers to remain on the defensive in the months ahead as they deal with rising interest rates and poor affordability.”

While Hogue did say that condos in the City of Toronto are likely to remain “relatively more resilient” he said that prices elsewhere will continue to fall for the time being, especially in the 905 belt “where property values soared during the pandemic.”

The July data from TRREB suggested that the average price of a home in the GTA was still up one per cent from July, 2021.

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Commuters face GO transit cancellations, possible strike – CityNews

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