Canada

Surging inflation and rising bond yields are set to offer a shot in the arm for Canadian banks' profit margins, which have languished during the pandemic, but an aggressive response by central banks could derail a nascent lending recovery and increase defaults, investors and analysts said, Reuters reported. Canadian banks' loan growth outside of mortgages all but disappeared during the pandemic as lockdowns and surging deposits slowed consumer and business borrowing. Although spending has increased after lockdowns were lifted, that has so far failed to translate into robust credit growth.

Canada's annual inflation rate accelerated again in October, matching a February 2003 high, led by sharp rises in gasoline and housing prices, data showed on Wednesday, with analysts expecting more heat ahead. Inflation rose to 4.7%, in line with expectations, up from 4.4% in September, Statistics Canada data showed. It was the seventh consecutive month in which headline inflation topped the Bank of Canada's 1-3% control range. Prices rose in all eight major component groups for the second month in a row. Analysts said that trend was likely to continue.

Richter Advisory Group has announced that it has been named trustee for Toronto’s Junction Craft Brewing, which has declared insolvency and entered a bankruptcy protection period during which it is soliciting buyers to take over the business, Canadian Beer News reported. Junction operates primarily as a brewer and seller of hand-crafted beers and other beverage products from an approximately 16,513 square foot leased premises located at 150 Symes Road, Toronto, Ontario.

Canadian retailer Le Chateau is making its comeback from bankruptcy today with the online launch of an evening wear collection ahead of the holidays, the Canadian Press reported. The so-called glamour capsule offers shoppers a hint of what to expect with the brand’s relaunch under new owner Suzy’s Inc., the company behind Suzy Shier, set for this spring. Franco Rocchi, senior marketing director of Suzy/Le Chateau, says the curated, limited-edition collection highlights the brand’s focus on high-fashion occasion wear.

The Bank of Canada will not raise its benchmark interest rate until the slack in the country's economy is absorbed, which has not yet happened but is getting closer, Governor Tiff Macklem said in a newspaper opinion piece on Monday, Reuters reported. Macklem also noted that while inflation risks have increased - driven by pandemic-induced demand shifts, supply disruptions and higher energy prices - the central bank continues to view the recent dynamics as transitory.

The Bank of Canada risks cutting short the current economic expansion if it shifts its focus from reducing slack in the economy to tamping down inflation, potentially setting the stage for the next cycle of rate cuts, Reuters reported. The dilemma for the central bank comes from a situation where inflation is driven not so much by economic strength but by factors, such as supply shortages, that are outside of its control and could lead to more enduring price increases if inflation expectations were to rise.

Canadian banks and insurers can resume dividend increases, share buybacks and increase executive compensation, the country's financial regulator said on Thursday, lifting a moratorium it has imposed on them since March 2020, Reuters reported. The Office of the Superintendent of Financial Institutions (OSFI) said in a statement these measures were effective over the past year and a half, but they are no longer necessary or fit-for-purpose and are being unwound. Canadian banks index has risen 83% during the 20 months the moratorium has been in place. The U.S.

The owner of Canada’s most valuable shopping mall is planning to add apartment buildings to that property and two others around Toronto, creating mixed-use neighborhoods that invite renters to live where they shop, Bloomberg News reported. Oxford Properties Group’s plans for rental apartment towers at Yorkdale Shopping Centre, Canada’s most productive mall by sales per square foot, are still in an early stage, Chief Executive Officer Michael Turner said.

Canadian defense firm Telemus Systems Inc. has filed for bankruptcy months after Ottawa canceled export permits for military goods and technologies to Turkey over Ankara’s role in the Nagorno Karabakh war, the Defense Post reported. The decision prevented the Ontario-based electronic warfare systems manufacturer from fulfilling pre-existing deals with Turkish Aerospace Industries Inc. According to Middle East Eye, Telemus had been selling a range of electronic warfare systems to the Ankara-based company for its Anka drone.