The Bank of Canada (BoC) on Tuesday said businesses urgently needed to boost investment to increase productivity, saying this would help insulate the economy against the threat of inflation, Reuters reported. “I'm saying that it's an emergency — it's time to break the glass," Senior Deputy Governor Carolyn Rogers told a business audience in the Atlantic province of Nova Scotia.
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The Canadian province of Ontario on Tuesday forecast its budget deficit would more than triple in the upcoming fiscal year as economic growth stalls and it spends more on housing and roads, as well as measures to ease the cost of living, Reuters reported. Ontario, Canada's most populous province and home to Toronto, its largest city, said its deficit would widen to C$9.8 billion ($7.2 billion), or 0.9% of gross domestic product, in 2024-25, from an estimated C$3 billion in the current fiscal year, which ends on March 31.
Canada's banking regulator is limiting the number of highly leveraged loans in banks' residential mortgage portfolios, which have ballooned alongside house prices to make Canadian borrowers among the most indebted in the world, the Globe and Mail reported on Friday, according to Reuters. The Office of the Superintendent of Financial Institutions (OFSI) has told lenders they will have to limit loans to borrowers with mortgages greater than 4.5 times their annual income, the newspaper reported, citing two sources familiar with the matter.
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Canada saw a steep rise in insolvencies in 2023, particularly in Q4 and in Ontario and Quebec, and small businesses bore much of the brunt, according to a report from Davies Ward Phillips & Vineberg LLP, CanadianLawyerMag.com reported. Rising by 41.4 percent compared to 2020 and 30.7 percent higher than 2019, the firm said its analysis of business openings, closings, and repayment requirements of government-subsidized loans indicated that smaller businesses largely drove rising filing rates.
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Canada's inflation rate surprisingly cooled in February to its slowest pace since June, and closely-watched core inflation measures eased to more than two-year lows, data showed on Tuesday, prompting investors to increase their bets for a June rate cut, Reuters reported. Annual headline inflation cooled to 2.8% last month, beating analyst expectations for a 3.1% rise, and below 2.9% increase in January. On the month, the consumer price index rose 0.3%, less than a forecast 0.6% rise, Statistics Canada said.
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An underachieving comedy festival in England and attempts by Facebook and YouTube to compete with the increasingly popular TikTok are among the factors that led revenue to plummet at the Just for Laughs festival parent company last year, a Quebec Superior Court filing suggests, the Canadian Press reported. The report on Thursday from insolvency trustee PwC, formerly known as PricewaterhouseCoopers, lists the circumstances that left Groupe Juste pour rire inc. unable to pay its debts.
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SaltWire Network, the largest newspaper business in Atlantic Canada, has filed for creditor protection, the Globe and Mail reported. Documents filed in the Supreme Court of Nova Scotia on Monday say the company, which runs 23 titles including its 150-year-old flagship newspaper, the Halifax Chronicle Herald, is more than $94-million in debt. Private debt firm Fiera, SaltWire’s largest creditor, also filed an application in court Monday, saying the media company owes it more than $32-million.
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Canadian Overseas Petroleum Ltd. has filed bankruptcy in its home country and the U.S. and said that it intends to restructure, Bloomberg News reported. The Calgary-based oil and gas production company said its existing lenders have offered to provide as much as US$11 million in financing to fund its proposed restructuring. COPL said it has requested the immediate suspension on trading of its shares on both the London Stock Exchange and the Canadian Securities Exchange. COPL has sought a form of chapter 11 protection in Canada and filed for bankruptcy in Delaware to protect its U.S.
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Canadian business insolvencies will likely remain elevated throughout 2024, experts said, as the economy plays catch-up after historically low levels during the pandemic, the Canadian Press reported. “We did have ... so many years of artificially low filings. We've got a fair bit of catch-up to do,” said Natasha MacParland, a partner at Davies Ward Phillips & Vineberg LLP. The pandemic saw a historically low level of insolvency filings — which include bankruptcy and restructuring procedures — as government supports kicked in but in 2023 things started to normalize, said MacParland.
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Canada’s labor market continues to run slightly hotter than expected, with another solid month of hiring buoyed by rapid population growth and signs still-high wage growth has begun to cool, the Wall Street Journal reported. Employers added 40,700 jobs last month, though that wasn’t enough to prevent the unemployment rate from ticking up 0.1 percentage point to 5.8%, Statistics Canada reported Friday. The pace of hiring was the strongest in five months and beat market expectations for the addition of a modest 20,000 jobs.
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