Canada

Canada’s banking watchdog warned that many homeowners who took out mortgages when rates were near zero during the pandemic will soon face a reckoning as those loans renew, Bloomberg News reported. The “payment shock” faced by some borrowers is among the most important risks currently in the financial system, according to the latest risk outlook from the Office of the Superintendent of Financial Institutions, released Wednesday. The regulator said that 76% of outstanding residential mortgages as of February will be coming up for renewal by the end of 2026.

Canada’s annual rate of core inflation eased for a fourth straight month, bolstering a case for policymakers to begin an easing cycle in the coming months, but a slight increase in the monthly pace may keep a June rate cut from being a certainty, Bloomberg News reported. The Bank of Canada’s two core inflation measures slowed in April to an average yearly pace of 2.75%, down from 3.05% a month earlier, Statistics Canada reported Tuesday in Ottawa. That’s slightly slower than the 2.8% expected in a Bloomberg survey of economists.

Canadian business insolvencies have climbed to levels not seen since the financial crisis of 2008, driven by indebted companies struggling with interest rates and softened consumer demand. But even those official insolvency statistics don’t tell the full picture, according to a commentary in The Globe and Mail. Economists and professionals who work with small and medium-sized businesses warn that the actual number of businesses that fail is much higher, with other data suggesting the problem is growing.

Aiden Pleterski, the self-proclaimed “Crypto King” who collected millions of dollars from investors, only to spend it on luxury goods, has been arrested on fraud charges in Canada, Bloomberg News reported. Pleterski, who lives in the Toronto suburb of Whitby, Ontario, was charged with fraud and laundering the proceeds of crime and held for a bail hearing, according to a statement Wednesday from the provincial securities regulator. Another man, Colin Murphy of Oshawa, Ontario, was charged with one count of fraud.

The company that operates retailers Ted Baker, Lucky Brand and Brooks Brothers plans to close a number of stores in Canada and the U.S. after months of declining sales pushed the operations into insolvency proceedings, the Globe and Mail reported. Ted Baker Canada announced the launch of liquidation sales on Friday, covering nine out of 25 Ted Baker stores in Canada and all of the brand’s locations in the U.S. The sales also affect all Brooks Brothers and Lucky Brand stores in Canada. The company has shut down its e-commerce operations for the time being.

Canada should take steps to introduce more mortgages with longer renewal terms, according to the country’s largest financial co-operative, Bloomberg News reported. More mortgage options, specifically those with 10-year terms, would help contain “payment shocks” faced by households when they renew their debt obligations after interest rates have increased, according to a report released Monday by Desjardins.

The Bank of Canada says households can weather higher borrowing costs, but flagged rising asset valuations and financial stress among renters as risks to the outlook, Bloomberg News reported. Canadians are “proactively” adjusting to higher interest rates, and the financial system “remains resilient,” the central bank said in its annual review of the system published Thursday. And while payments have risen for about half of the country’s mortgages, households have higher wages and savings, officials said, and they’re adjusting their spending patterns.

Orea Mining Corp., has been permanently delisted from trading on the Toronto Stock Exchange and the OTCQB; transfer agent, clearing, CDS and DTC services are inactive or have terminated, according to a company press release. Orea was assigned into bankruptcy on April 17, 2024. Crowe MacKay & Company Ltd., has been appointed as Licensed Insolvency Trustee (the "Trustee") of Orea's bankrupt estate, and affirmed by Orea's creditors at a meeting held on May 7, 2024.

Business insolvencies in Canada are hitting their highest point since the Great Recession, new data show, the Globe and Mail reported. According to the federal Office of the Superintendent of Bankruptcy, 2,003 business insolvencies were filed from Jan. 1 to March 31 of this year. Of those, 1,599 were bankruptcies and 404 were proposals, which is a legal option to negotiate lower debt repayment with creditors. The number of insolvencies was up 32 per cent from the previous quarter, and 87 per cent from the same quarter last year.

A Nova Scotia judge received good news Tuesday during an update on the proposed sale of SaltWire Network Inc. and The Halifax Herald Ltd., two financially troubled companies that operate Atlantic Canada's largest newspaper chain, the Canadian Press reported. Those shepherding the restructuring process told Nova Scotia Supreme Court Justice John Keith that progress is being made toward securing a deal that could see all or part of the insolvent businesses sold to one or more bidders.