Canada’s economy may prove surprisingly resilient in its recovery following the COVID-19 lockdown, according to Bank of Canada Governor Stephen Poloz.
In his final press conference before stepping down as BoC Governor next month, Poloz said, “I’m relatively optimistic…compared with what the talk is.”
His more positive assessment comes just one week after the head of the CMHC shocked many with a surprisingly bearish forecast for Canada’s economic prospects.
While Poloz said the central bank needs to be prepared for any range of outcomes, he remains confident that the Bank’s extraordinary fiscal stimulus measures—including cutting rates to near-zero and injecting more than $300 billion into financial markets—will allow large parts of the economy and many Canadians to pick up where they left off prior to the crisis.
Bank of Canada Governor Stephen Poloz
“We have to be able to manage the risks around those things, so I’m not going to dismiss” pessimistic scenarios, Poloz said during an online media roundtable. “But, me personally, I do think on balance what I’m hearing, the flow that I’m hearing, is a little too dire, a little bit overblown.”
Poloz added that he doesn’t see this economic crisis as following the same path as previous recessions or depressions, largely due to the historic income supplements provided by the government, mortgage payment deferrals provided by the banks and other lenders, and the Bank of Canada’s foray into quantitative easing.
Additionally, he noted that the current economic crisis was caused by government-imposed shutdowns as opposed to behavioural factors. As a result, the economy is currently tracking the Bank’s best-case recovery scenario of a sharp drop in output of 15%.
Once the economy is fully “turned back on,” in the coming weeks, “you should see a very rapid return to production,” he added.
When asked about a potential second wave of the virus, Poloz said the economic impact could be similar to that estimated in the Bank’s worst-cast economic scenario, where Q2 GDP plunges by 30% compared to Q4 2019.
Interest Rates to Remain Low
Canada’s key lending rate is currently at 0.25% following the 150 basis points in interest rate cuts the Bank delivered in March. And Poloz suggested rates will remain historically low for the foreseeable future.
“We are in an era where interest rates are probably going to stay low, for demographic reasons and economic growth reasons. I don’t know how low really, but they’re just not going to be like where they were 20 years ago or 30 years ago,” Poloz said. “So central banks will have less room to maneuver.”
There has been speculation as to whether they may yet fall further.
Overnight index swaps markets are currently pricing in a 17% chance of a quarter-point cut at the Bank’s June meeting, and a 25% chance of a cut before the end of the year.
Senior RBC economist Josh Nye agreed with the BoC’s assessment of a “reasonable bounce-back in economic activity once containment measures are lifted,” but cautioned that a full recovery could be years away, which would work to suppress interest rates longer term.
“Excess supply should keep inflation below the BoC’s target (and) monetary policy is currently focused on improving financial market functioning,” Nye wrote. “But as we enter the recovery phase, QE and low interest rates will be relied upon to stimulate growth.”
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TORONTO – Canada Goose Holdings Inc. says it has signed a deal that will result in the creation of its first eyewear collection.
The deal announced on Thursday by the Toronto-based luxury apparel company comes in the form of an exclusive, long-term global licensing agreement with Marchon Eyewear Inc.
The terms and value of the agreement were not disclosed, but Marchon produces eyewear for brands including Lacoste, Nike, Calvin Klein, Ferragamo, Longchamp and Zeiss.
Marchon plans to roll out both sunglasses and optical wear under the Canada Goose name next spring, starting in North America.
Canada Goose says the eyewear will be sold through optical retailers, department stores, Canada Goose shops and its website.
Canada Goose CEO Dani Reiss told The Canadian Press in August that he envisioned his company eventually expanding into eyewear and luggage.
This report by The Canadian Press was first published Sept. 19, 2024.
Almost seven years since news broke of an alleged conspiracy to fix the price of packaged bread across Canada, the saga isn’t over: the Competition Bureau continues to investigate the companies that may have been involved, and two class-action lawsuits continue to work their way through the courts.
Here’s a timeline of key events in the bread price-fixing case.
Oct. 31, 2017: The Competition Bureau says it’s investigating allegations of bread price-fixing and that it was granted search warrants in the case. Several grocers confirm they are co-operating in the probe.
Dec. 19, 2017: Loblaw and George Weston say they participated in an “industry-wide price-fixing arrangement” to raise the price of packaged bread. The companies say they have been co-operating in the Competition Bureau’s investigation since March 2015, when they self-reported to the bureau upon discovering anti-competitive behaviour, and are receiving immunity from prosecution. They announce they are offering $25 gift cards to customers amid the ongoing investigation into alleged bread price-fixing.
Jan. 31, 2018: In court documents, the Competition Bureau says at least $1.50 was added to the price of a loaf of bread between about 2001 and 2016.
Dec. 20, 2019: A class-action lawsuit in a Quebec court against multiple grocers and food companies is certified against a number of companies allegedly involved in bread price-fixing, including Loblaw, George Weston, Metro, Sobeys, Walmart Canada, Canada Bread and Giant Tiger (which have all denied involvement, except for Loblaw and George Weston, which later settled with the plaintiffs).
Dec. 31, 2021: A class-action lawsuit in an Ontario court covering all Canadian residents except those in Quebec who bought packaged bread from a company named in the suit is certified against roughly the same group of companies.
June 21, 2023: Bakery giant Canada Bread Co. is fined $50 million after pleading guilty to four counts of price-fixing under the Competition Act as part of the Competition Bureau’s ongoing investigation.
Oct. 25 2023: Canada Bread files a statement of defence in the Ontario class action denying participating in the alleged conspiracy and saying any anti-competitive behaviour it participated in was at the direction and to the benefit of its then-majority owner Maple Leaf Foods, which is not a defendant in the case (neither is its current owner Grupo Bimbo). Maple Leaf calls Canada Bread’s accusations “baseless.”
Dec. 20, 2023: Metro files new documents in the Ontario class action accusing Loblaw and its parent company George Weston of conspiring to implicate it in the alleged scheme, denying involvement. Sobeys has made a similar claim. The two companies deny the allegations.
July 25, 2024: Loblaw and George Weston say they agreed to pay a combined $500 million to settle both the Ontario and Quebec class-action lawsuits. Loblaw’s share of the settlement includes a $96-million credit for the gift cards it gave out years earlier.
Sept. 12, 2024: Canada Bread files new documents in Ontario court as part of the class action, claiming Maple Leaf used it as a “shield” to avoid liability in the alleged scheme. Maple Leaf was a majority shareholder of Canada Bread until 2014, and the company claims it’s liable for any price-fixing activity. Maple Leaf refutes the claims.
This report by The Canadian Press was first published Sept. 19, 2024.
Companies in this story: (TSX:L, TSX:MFI, TSX:MRU, TSX:EMP.A, TSX:WN)
TORONTO – TD Bank Group, which is mired in a money laundering scandal in the U.S., says chief executive Bharat Masrani will retire next year.
Masrani, who will retire officially on April 10, 2025, says the bank’s, “anti-money laundering challenges,” took place on his watch and he takes full responsibility.
The bank named Raymond Chun, TD’s group head, Canadian personal banking, as his successor.
As part of a transition plan, Chun will become chief operating officer on Nov. 1 before taking over the top job when Masrani steps down at the bank’s annual meeting next year.
TD also announced that Riaz Ahmed, group head, wholesale banking and president and CEO of TD Securities, will retire at the end of January 2025.
TD has taken billions in charges related to ongoing U.S. investigations into the failure of its anti-money laundering program.
This report by The Canadian Press was first published Sept. 19, 2024.
