Bank of Canada Governor Tiff Macklem said the country’s economy is headed for a soft landing, suggesting the central bank expects the unemployment rate to rise but that a large increase isn’t needed to achieve the inflation target, Bloomberg News reported. On Monday, Macklem said Canada’s unemployment rate — which hit 6.2% in May — was “just above” pre-pandemic levels, when the labor market was close to “maximum sustainable employment” — the highest level of jobs an economy can have without stoking inflation.

Inflation unexpectedly surged in Canada, a setback for policymakers as they weigh further interest rate cuts next month, Bloomberg News reported. The consumer price index rose 2.9% in May from a year ago, up from 2.7% a month earlier, primarily due to higher prices for services, Statistics Canada reported Tuesday in Ottawa. On a monthly basis, the index climbed 0.6%, versus expectations for a 0.3% gain and up from 0.5% in April. On a seasonally adjusted basis, inflation rose 0.3%.

Businesses failed to remit to Ottawa billions of dollars in sales taxes they had collected from customers last year, new data shows, indicating financial difficulties as those companies are unable to keep up with their invoices, the Globe and Mail reported. The Canada Revenue Agency says there was $19.4 billion in GST and HST debt outstanding as of March 31, an increase of $3.2 billion from a year ago and double what it was before the COVID-19 pandemic. That’s the largest single-year figure in CRA data, which goes back a decade.

Canadian retail sales likely dropped last month, nearly wiping out all of April’s gains and highlighting weakness in consumer spending that will keep more Bank of Canada rate cuts on the table this year, Bloomberg News reported. Receipts for retailers fell 0.6% in May, the biggest monthly decline since January, according to an advance estimate from Statistics Canada released Friday. April’s increase — the only gain in retail sales so far this year — was primarily driven by gasoline stations and fuel vendors, which likely benefited from higher prices. In volume terms, retail sales rose 0.5%.

An Ontario court has approved a sales process and stalking-horse bid for Red Lobster Canada, which is operating under court protection from creditors, CBC.ca reported. The move comes after a U.S. court approved the sales process for the company which launched chapter 11 bankruptcy proceedings last month. Court filings made on June 11 say the steps are meant to "preserve" Red Lobster's business in Canada and the employment of the company's 2,000 workers stationed at 27 restaurants across the country.

U.S. hedge fund manager Elliott Investment Management has offered support to troubled Canadian miner Nevada Copper Corp. after the company filed for chapter 11 protection, Bloomberg News reported. Before Monday’s bankruptcy filing, Nevada Copper had attracted two bidders though it failed to close a deal with either one, Chief Financial Officer Gregory J. Martin said in a court filing. To help pay for the chapter 11 restructuring case, the company agreed to borrow as much as $60 million from Elliott affiliates.

Moody’s Ratings downgraded Allied Properties Real Estate to junk status on Tuesday, citing the Canadian office landlord’s high debt levels, as well as weakening occupancy rates that will weigh on its ability to meet its obligations, Bloomberg News reported. The bond grader cut the company’s senior unsecured rating to Ba1, the highest junk rating, from Baa3, the lowest investment-grade level. The outlook remains negative. Allied Properties is a real estate investment trust that specializes in turning old downtown industrial and warehouse space into offices for industries including technology.

U.S. cities aiming to convert half-filled office towers into residential buildings are looking north of the border to Calgary, Alberta, which has one of the most aggressive programs in North America to promote these conversions, the Wall Street Journal reported. American officials have been studying the Calgary program, and some cities have even sent delegations to visit the western Canadian city. Early returns show the promise—and limitations—of conversion plans.

Canada’s unemployment rate rose for the third time in four months, but rising wages and a strong US labor report prompted some economists to express caution on the pace of Bank of Canada rate cuts, Bloomberg News reported. The country added 26,700 positions in May and the jobless rate rose 0.1 percentage points to 6.2%, Statistics Canada reported, roughly in line with expectations in a Bloomberg survey of economists. The unemployment rate has risen 1.1 percentage points since April last year.

Canadian cannabis retail chain Four20 Premium Markets, one of the largest dispensaries in Alberta, has announced plans to file for bankruptcy, BusinessofCannabis.com reported. The parent companies of the 35-store retail chain, 420 Premium Markets Ltd., 420 Investments Ltd. and Green Rock Cannabis, filed a ‘notice of intent’ to file for bankruptcy under. According to Stratcann, the notice was filed on May 29, 2024, following an extended and costly legal battle with Tilray.