About My Portfolio
These articles showcase business and market research I’ve authored, whether it’s covering company news, documenting industry disruptors, or identifying new trends and exploring their impact on the world around us.
My work is about bringing down the high knowledge barrier associated with complex topics and making them accessible to a wider audience of readers.
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TD won’t hit growth target, announces buyback in wake of First Horizon deal termination
May 25, 2023
Toronto-Dominion Bank has scaled back its medium-term growth outlook and announced it will be repurchasing more than 30 million shares as it navigates the aftermath of the collapse of its US$13.4 billion deal to acquire Memphis-based First Horizon Corp.
The bank revealed the measures on May 25 as it reported second quarter earnings that missed analyst expectations despite profit growth in the bank’s core segments.
RBC misses expectations as costs and credit loss provisions eat into profit
May 25, 2023
The Royal Bank of Canada missed expectations as profit fell in the second quarter on higher credit-loss provisions and staffing and technology costs.
RBC’s net income fell 14 per cent year over year to $3.6 billion in the three months ending April 30. On an adjusted basis, the bank’s profit was down 13 per cent at $3.8 billion. Adjusted diluted earnings per share were $2.65. Bloomberg analysts had been expecting $2.80 per share.
CIBC hikes dividend as profit beats expectations
May 25, 2023
Canadian Imperial Bank of Commerce beat expectations in the second quarter and raised its dividend, despite putting aside more funds for potential credit losses.
CIBC’s net income rose more than 10 per cent to $1.69 billion in the three months ending April 30. On an adjusted basis, the bank’s profit fell two per cent to $1.63 billion, or $1.70 per share. Bloomberg analysts had been expecting $1.63 per share.
Read it now at the Financial Post
BMO misses expectations amid Bank of the West integration
May 24, 2023
The Bank of Montreal missed expectations in its second quarter as the bank set aside more funding for potentially bad loans and recognized costs associated with its acquisition of U.S.-based Bank of the West.
BMO’s net income fell to $1.06 billion in the three months ending April 30, down from $4.76 billion a year earlier. On an adjusted basis, the bank’s profit grew to about $2.22 billion, or $2.93 per share, from $2.19 billion the year before. Bloomberg analysts had been expecting $3.21 per share.
Scotiabank misses expectations on higher loan-loss provisions, but hikes dividend
May 24, 2023
The Bank of Nova Scotia missed expectations in the second quarter as it was hit with a double-digit increase in expenses and put aside more cash for loans potentially going sour if the economic picture darkens.
Scotiabank’s net income fell over 20 per cent to $2.16 billion for the three months ending April 30 as compared to the same period last year. On an adjusted basis, the bank’s profit fell to $2.174 billion, or $1.70 per share from $2.18 per share this time last year. Bloomberg analysts had been expecting $1.76 per share.
U.S. banking crisis casting chill over Canadian banks heading into earnings this week
May 23, 2023
Canada’s banking system avoided taking a direct hit from the U.S. crisis that shook the global financial landscape earlier this year, but the episode is still fresh in market watchers’ minds heading into second quarter bank earnings.
Contagion from the March collapse of California-based Silicon Valley Bank claimed a handful of U.S. regional banks and forced Swiss authorities to engineer a rescue of Credit Suisse. Though the damage stopped short of the Canadian border, the incident has left lingering concerns about potential weaknesses in the financial system and invited additional scrutiny of Canada’s biggest banks, especially those with operations in the U.S.
Bank of Canada sees signs Canadians are having trouble keeping up with their debt
May 18, 2023
The rapid rise of interest rates have left the Bank of Canada more worried about Canadians’ household debt and cracks forming in the global financial system.
The strain of rising mortgage interest costs on indebted households and the aftershocks of the U.S. banking crisis have emerged as two key risks highlighted in the central bank’s latest Financial System Review.
Lenders are taking a more conciliatory approach to insolvencies — and that means fewer bankruptcies
May 16, 2023
Borrowers are struggling to keep up with debt payments in the post-pandemic era, but the more conciliatory approach to highly indebted customers that Canadian lenders adopted following the global financial crisis seems to be keeping outright bankruptcies to a minimum.
March data from the Office of the Superintendent of Bankruptcy showed that consumer and business insolvencies jumped by 28 per cent month over month, a sign that high interest rates are starting to push some households and businesses to the brink. The good news, however, is that consumer proposals — a process where borrowers work out a deal with lenders to pay back a portion of what’s owed — are outpacing bankruptcies by a wide margin.
Canadian banks hit with downgrades as economic storm clouds gather
May 10, 2023
Canadian bank stocks may be running out of runway amid an uncertain outlook and potential recession looming on the horizon, leading some analysts to slash outlooks and hand out downgrades.
Barclays Bank PLC analyst John Aiken downgraded Royal Bank of Canada, Bank of Nova Scotia and Toronto-Dominion Bank on May 9, causing the S&P/TSX financials index to drop by one per cent.
Do you want a digital loonie? The Bank of Canada wants to know
May 08, 2023
The Bank of Canada said it still thinks a digital version of the dollar is unnecessary, but it wants to know what Canadians think about the possibility anyway.
Canada’s central bank stepped up its years-long investigation of cryptocurrency on May 8, initiating a public consultation on the subject of a central bank digital currency. Policymakers said they will take submissions until June 19.
EQ Bank posts record earnings as lending for apartment construction surges
May 04, 2023
Alternative lender Equitable Group Inc. posted record earnings in the first quarter despite some choppy conditions for North American banks.
On an adjusted basis, EQ Bank earned $2.62 per share, outpacing the street’s expectations of $2.44 per share. Rising reported net interest income of $241 million and better-than-forecast credit loss provisions as the bank set aside allowances of $6.2 million for bad loans fuelled the beat.
Read it now on the Financial Post
Toronto home prices, sales rise in competitive spring market
May 03, 2023
Toronto home prices eked out a third monthly gain in April as a tight housing market heated up competition.
The average price of a home in the Greater Toronto Area rose four per cent month-over-month to $1.153 million in April, according to data from the Toronto Regional Real Estate Board. Still, prices were down from their pandemic highs of $1.25 million a year earlier. The number of homes exchanging hands also rose just over nine per cent to 7,531 homes sold from March to April. Sales were down slightly over five per cent from a year ago.
Crisis hits Canadian banks’ deposits in U.S. with TD faring the worst, filings show
May 02, 2023
Canadian banks with operations south of the border are showing some scars from the United States banking crisis, with deposits coming under pressure in the first quarter according to filings with the U.S. Federal Reserve.
On average, deposits at the four Canadian banks with significant U.S. divisions slipped by three per cent quarter over quarter, according to a May 1 note from National Bank of Canada analyst Gabriel Dechaine. The calculations were based on quarterly filings known as call reports made to the Federal Financial Institutions Examination Council. Dechaine said the dip was consistent with what U.S. banks have experienced and that steepest declines were recorded in non-interest-bearing deposits.
Silicon Valley Bank crisis shows regulators can’t be complacent in digital age, OSFI head says
April 29, 2023
The speed of the deposit flight that led to the failure of Silicon Valley Bank means more questions need to be asked about financial oversight in the digital age, according to Canada’s top banking regulator.
“The global financial system is deeply interconnected,” Superintendent of Financial Institutions Peter Routledge told an April 27 Economic Club of Canada event in Toronto. “Contagion is always a threat, so problems on one part of the system ripple across the globe at lightspeed.”
Population boom proves wild card in Bank of Canada rate decision
April 27, 2023
The Bank of Canada‘s leaders spent “considerable time” discussing the country’s booming population during their latest policy deliberations, concluding that surging immigration could be making the labour market look tighter than it actually is.
Governor Tiff Macklem and his deputies opted to leave the benchmark interest rate unchanged on April 12, but not before puzzling over Canada jobs data that show hiring had remained strong despite their best efforts to slow the economy with higher interest rates.
Toronto’s high-quality office buildings not immune from spike in sublease space
April 26, 2023
Subleased space in Toronto‘s downtown core surged in the first quarter as firms continue to right-size their work spaces following the pandemic work-from-home boom, with even the highest quality office buildings starting to feel the effects.
Downtown Toronto’s sublease availability jumped 13.5 per cent from the fourth quarter of 2022 to over 4.36 million square feet in the first three months of the year, according to data from real estate firm JLL Inc. While the increase wasn’t as high as the 20.8 per cent jump recorded in the fourth quarter of 2022, it marks the third consecutive quarterly of rising sublease space.
Battered fintechs starting to lose faith in promise of open banking
April 26, 2023
Ask any chief executive of a fintech company about fundraising these days and they’ll tell you that capital is much harder to come by since the pandemic tech boom fizzled.
The new, more challenging environment is a far cry from a few years ago, when the fintech world was awash in cash and pressing government for greater access to the data that helps incumbent institutions dominate the financial landscape.
Why a recession might be just what the doctor ordered for Canada’s economy
April 21, 2023
We may be in for some rocky months, but a recession later this year could ultimately help jostle the economy back to a state of normalcy, the Bank of Nova Scotia’s chief economist said this week.
Speaking at the Canadian Fintech Summit in Toronto on April 19, Jean-François Perrault made the case that the past decade-plus has been anything but normal, in economic terms.
TD CEO offers few details on state of First Horizon deal
April 20, 2023
Toronto-Dominion Bank chief executive Bharat Masrani still sees the benefits of merging with Memphis-based First Horizon Corp., but gave shareholders few details on the status of the acquisition at TD’s annual meeting on April 20.
Numerous attendees at the shareholder meeting asked about the US$13.4 billion First Horizon deal’s progress and whether there would be changes to the terms, something banking analysts had speculated on amid turbulence stemming from the collapse of Silicon Valley Bank last month.
BMO chief executive Darryl White eases deposit concerns at shareholders meeting
April 18, 2023
The head of the Bank of Montreal reassured investors that his bank is not grappling with deposit or liquidity concerns, questions that North American banks have been facing since the crisis at Silicon Valley Bank put a range of U.S. regional banks under pressure.
“We have a stable and diverse base of customer deposits and we maintain high quality liquid assets that can be accessed in times of stress,” BMO chief executive Darryl White said during the bank’s annual general meeting in Toronto on April 18.
Schwab’s earnings beat may take heat off TD, but deposit flight leaves questions
April 17, 2023
An earnings beat by the Charles Schwab Corp. may take some of the heat off stakeholder Toronto-Dominion Bank, which has found itself in the crosshairs of short sellers and lagged its Canadian peers in recent months in part due to its 12 per cent holding in the U.S. financial services company.
Charles Schwab’s profits grew by 14 per cent year-over-year in the first quarter to $1.6 billion. On an adjusted basis, the bank’s earnings of 0.93 per share surpassed Bloomberg analyst expectations of 0.90 per share.
Canada’s main inflation indicator will plunge this week: What that means for interest rates
April 17, 2023
The inflation story starts a new chapter this week.
For the better part of a year, the narrative was one of consumer angst amid the worst inflation in forty years, and a central bank’s mission to crush price pressures with a staggering number of interest rate increases.
More recently, the pace of inflation has come off its peak, so much so that the Bank of Canada has paused its rate hikes for the time being. Statistics Canada likely will reveal more good news on April 18, when it likely will report that year-over-year increases in the consumer price index dropped to their lowest since at least the fall of 2021 in March.
Canadians are about to be hit by the full shock of rising interest rates
April 14, 2023
Canadians are about to feel the full effect of the interest-rate shock the Bank of Canada put in motion a year ago.
Anyone seeking a home loan is seeing the highest interest rates in recent memory. You could get a variable mortgage with a rate of about 1.5 per cent a year ago — and if you did, you’ve had an uncomfortable year, as variable rates are now closer to six per cent, according to Bank of Canada data.
‘The warning signs were there’ before SVB crisis hit, Carolyn Wilkins says
April 11, 2023
The collapse of Silicon Valley Bank was a “missed opportunity” for regulators and those in the financial sector who failed to heed the warnings signs and head off the crisis in advance, according to a former senior deputy governor of the Bank of Canada.
Carolyn Wilkins, who now serves as a senior research scholar at Princeton University, in addition to other roles, made the comments during a university panel discussion about the crisis on April 11.
Scotiabank taps Francisco Aristeguieta as head of international banking
April 10, 2023
The Bank of Nova Scotia is bringing in veteran banker Francisco Aristeguieta to run its international business, in the first major operational change since Scott Thomson became chief executive earlier this year.
Aristeguieta will take the helm on May 1, replacing Ignacio “Nacho” Deschamps, who is set to retire from Scotiabank by the end of the month after serving as international head since February 2016.
Rise in short bets against TD is much ado about nothing, analysts and investors say
April 10, 2023
Toronto-Dominion Bank’s outsized exposure to the U.S. may have put it in the crosshairs of short sellers in recent weeks, but those looking for a bank crisis in Canada will likely end up disappointed, market watchers say.
On April 4, data from S3 Partners showed that short interest in TD totalled $4.71 billion ($3.63 billion on Canadian markets and $1.08 billion in the U.S.). That gave TD the honour of having the largest total short interest of any bank worldwide, according to S3, a fact that made the headlines.
Toronto home prices rise as competition heats up in tight market
April 05, 2023
Toronto home prices may have turned the corner in March as rising competition in a tight market pushed sales and prices higher month-over-month.
While prices were down nearly 15 per cent from the same time last year as demand buckled under the weight of interest rate increases, they were up more than one per cent from February, according to data from the Toronto Regional Real Estate Board.
Calgary home prices edge up in March in tight market
April 03, 2023
The price of a Calgary home edged higher in March in a tight market, as potential sellers hold onto their homes for longer.
On average, prices increased two per cent to $541,800 in March from the previous month, and eked out a roughly one per cent gain from the same time last year, according to data from the Calgary Real Estate Board. The number of homes exchanging hands in the city also grew by about 40 per cent from a sluggish February, to 2,432 units sold in March.
WonderFi, Coinsquare and CoinSmart to create largest Canadian regulated crypto asset platform
April 03, 2023
Canadian cryptocurrency companies WonderFi Technologies Inc., Coinsquare Ltd. and CoinSmart Financial Inc. are joining forces to create the country’s largest crypto asset trading platform.
The combined entity is expected to serve 1.65 million registered Canadian users with over $600 million in combined assets under custody. It also plans to launch new products and services similar to those already offered by major international players.
Credit is getting tighter but Canadian banks can weather storm, analysts say
March 31, 2023
Credit is likely to be harder to come by for households and businesses in North America in the wake of the collapse of Silicon Valley Bank, but analysts say Canada’s big banks should be able to hold their own despite a more restrictive lending environment.
U.S. Federal Reserve chair Jerome Powell put issue front and centre last week when the turmoil in the U.S. banking sector would lead to tighter credit conditions that “would in turn affect economic outcomes,” on top of already rising interest rates.
Bank of Canada ‘ready to act’ against banking turmoil, deputy governor Toni Gravelle says
March 29, 2023
Bank of Canada deputy governor Toni Gravelle said the central bank stands “ready to act” against a market-wide financial sector stress, making a point to calm any nerves that remain frayed from the turmoil that came in the wake of the collapse of Silicon Valley Bank almost three weeks ago.
Gravelle told a gathering of financial professionals in Montreal that it is the Bank of Canada’s mission to keep the financial system stable, and that policymakers are confident that banks are much more resilient now than they were during the global financial crisis in 2008.
Budget spending that grows economic capacity may fight inflation, not fuel it, Poloz says
March 29, 2023
The rash of new spending measures unveiled in the federal budget on March 28 may not have the inflationary effect some are predicting because much of the money is being directed to adding capacity to the economy, according to former Bank of Canada governor Stephen Poloz.
In a post-budget report, Poloz argues that the aggressive pace of central bank rate hikes over the past year are already having a cooling effect on overall demand, and supply side spending that boosts capacity should actually contribute to the fight against inflation.
Grocery rebates to junking junk fees: What’s in the federal budget for ordinary Canadians
March 28, 2023
From grocery rebates to tackling predatory lending, Ottawa unveiled more details of its “targeted measures” for Canadians in the newly minted federal budget. Here’s what you need to know about the new measures that could impact your pocketbook:
Ottawa can expect a revenue windfall, but spending will determine the deficit
March 28, 2023
If the provinces are any indication, Ottawa may report a surge in tax revenue when it unveils its 2023 budget March 28, but whether it’s enough to put a dent in the deficit will depend on the government’s spending plans.
Most provinces tabling their budgets over the past few weeks enjoyed tax windfalls from the 2021 assessment season as taxable income grew. The federal government is expected to see a similar revenue bump from pandemic support repayments, higher taxable income and other tax revenues such as the one-time excess profit tax on financial institutions.
Surplus or deficit? Here’s how the provinces stack up financially after budget season
March 28, 2023
The struggle to bring provincial budgets into balance has never been easy and as the pandemic waned, the expectation was for a continued sea of red. But tax and energy windfalls and federal health transfers have flipped the script — notwithstanding certain exceptions. With provincial budget season completed, the Financial Post’s Stephanie Hughes breaks down what you need to know. (Provincial surplus/deficit figures are for fiscal 2023-2024.)
Ontario deficit forecast plunges to $2.2 billion from near-$20 billion as budget unveiled
March 23, 2023
The Ontario government is aiming to bolster economic growth in the province through investment in critical mineral infrastructure and tax credits for manufacturers as part of a budget tabled March 23 that forecasts a dramatically lower deficit for the fiscal year 2022-2023 on higher tax revenue.
Premier Doug Ford’s government is now projecting a deficit of $2.2 billion in fiscal 2022-2023, down dramatically from Budget 2022’s expected near-$20 billion deficit and below the $6.5 billion projected in the province’s third quarter financial outlook in February.
‘They need each other’: Banking crisis amps up uncertainty around TD’s First Horizon deal
March 21, 2023
Toronto-Dominion Bank’s proposed US$13.4 billion acquisition of Tennessee-based First Horizon Corp. was supposed to be the lynchpin of its U.S. expansion strategy, a move that would make it the sixth-largest bank there with US$614 billion in assets and allow it to keep ahead of Canadian rivals who have been building their own operations south of the border.
Now regulatory hurdles and the aftermath of the collapse of Silicon Valley Bank, which has sent the values of U.S. regional banks tumbling, mean the deal is unlikely to be completed on its original terms, and may fall apart altogether.
Silicon Valley Bank shook up Canadian tech lending. Will the big banks fill the void?
March 17, 2023
Silicon Valley Bank built a modest loan book totalling just over $435 million in its four years of operating in Canada, but the collapse of the U.S. based technology lender last week has left outsized questions about who will step in to fill the void in venture lending it leaves behind.
In the immediate aftermath, the big banks and the venture unit of the Business Development Bank of Canada (BDC), which is armed with capital to step in where traditional lenders don’t, have been working with firms caught in the lurch.
OSFI has control of Silicon Valley Bank’s assets in Canada. Here’s what comes next
March 14, 2023
The Office of the Superintendent of Financial Institutions seized the assets of Silicon Valley Bank’s Canadian operations on the weekend after the California-based lender was shut down by U.S. authorities. But just what happens when Canada’s federal bank regulator takes over a financial institution, and what does it do with its assets? The Financial Post’s Stephanie Hughes unpacked the playbook.
How fallout from the SVB collapse could complicate life for some of Canada’s big banks
March 13, 2023
The collapse of Silicon Valley Bank is unlikely to have a significant direct impact on Canada’s Big Six banks, but fallout from the U.S. tech lender’s demise could nevertheless complicate life for those with operations south of the border, analysts said on March 13.
Canadian bank stocks tumbled last week, losing nearly $20 billion in market capitalization, after Santa Clara, Calif.-based SVB suffered a run on deposits and was taken over by U.S. regulators. Bank shares were down again on Monday, with Toronto-Dominion Bank falling the furthest, off nearly three per cent in afternoon trading in Toronto. It closed down 3.43 per cent on the day.
Loonie will be factor when deciding whether interest rates stay on hold: Bank of Canada
March 10, 2023
Bank of Canada senior deputy governor Carolyn Rogers said the central bank will be keeping an eye on the loonie when deciding whether to freeze rates or deliver another hike this year.
The Canadian dollar won’t be the central bank’s main focus. That will be inflation, which Rogers reiterated remains way too high. But she acknowledged that a weaker dollar has the potential to make the Bank of Canada’s attempt to contain price pressures more complicated.
RBC doesn’t see Canada’s housing markets going into ‘free fall’
March 08, 2023
Canada’s real estate market could be more resilient than people think, says the chief financial officer of the country’s biggest bank.
Royal Bank of Canada’s Nadine Ahn described the bank’s mortgage book as healthy even as home prices buckle under the weight of higher interest rates and a possible recession. High immigration levels driving demand amid a supply crunch means the country will still be grappling with an imbalance.
Banks beat the street, but can they outrun the downturn?
March 08, 2023
Most of Canada’s biggest banks beat the street in the first quarter, but analysts and investors alike are holding off on the celebrations.
Mounting expenses, macroeconomic storm clouds and the fact that capital markets were one of the lone bright spots all dampened enthusiasm for the beat.
TD Bank beats expectations with boost from retail banking business
March 02, 2023
Toronto-Dominion Bank posted first quarter earnings that beat expectations on growth in its Canadian and U.S. retail banking operations, results that came amid new uncertainty over the fate of its blockbuster acquisition of First Horizon Corp.
TD’s net income fell nearly 58 per cent to $1.58 billion for the three months ending Jan. 31. On an adjusted basis, the bank’s profit grew eight per cent to $4.16 billion, or $2.23 per share. On average, Bloomberg analysts were expecting $2.20 per share.
National Bank beats expectations despite higher expenses, credit loss provisions
March 01, 2023
The National Bank of Canada beat analyst expectations in the first quarter despite higher expenses as revenues rose in its core banking and wealth management segments.
National Bank’s profit fell five per cent to $881 million in the first three months ending Jan. 31. On an adjusted basis, net income slipped over two per cent to $905 million, or $2.56 per share. Bloomberg analysts had been expecting $2.39 per share.
RBC beats expectations despite profit drop due to higher bad-loan provisions
March 01, 2023
Record capital markets revenue helped the Royal Bank of Canada beat expectations in its first quarter earnings, but it was not enough to fully assuage analysts and investors in the face of a deteriorating credit picture and rising expenses.
RBC reported a 22 per cent year-over-year drop in net income, which clocked in at $3.2 billion for the three months ending Jan. 31 as higher loan-loss provisions and a federal tax weighed on results. On an adjusted basis, the bank’s earnings grew four per cent to $4.3 billion or $3.10 per share, largely fuelled by revenue growth across core banking and capital markets segments. Bloomberg analysts had been expecting $2.96 per share.
Laurentian Bank beats analyst expectations despite profit slip
March 02, 2023
he Laurentian Bank of Canada’s profit slipped in the first quarter as expenses rose and it set aside more funding for loans potentially going bad.
The bank’s reported profit fell by just over six per cent year over year to $51.9 million in the three-month period ending Jan. 31. On an adjusted basis, the bank’s profit was $54.3 million, or $1.15 per share, down nearly nine per cent from a year earlier but ahead of Bloomberg analyst expectations of $1.13 per share.
BMO beats expectations despite profit fall
February 28, 2023
The Bank of Montreal topped analyst expectations in its first quarter, fuelled by strong performances in its trading and core banking businesses, as well as lower-than-anticipated loan-loss provision.
The bank’s reported net income clocked in at $247 million for the three months ending Jan. 31, down from $2.9 billion posted a year earlier, a decline that was largely due to valuation adjustments on its acquisition of BNP Paribas SA’s Bank of the West.
Scotiabank CEO vows to improve shareholder returns after earnings miss
February 28, 2023
The Bank of Nova Scotia will focus on areas of profitable and sustainable growth in a bid to improve returns to shareholders going forward, new chief executive Scott Thomson said Feb. 28 after the bank posted first-quarter results that missed expectations.
“We have not delivered the level of total shareholder returns that our shareholders should expect of us,” Thomson said in his first conference call since taking the helm at the bank earlier this month.
TD Bank to pay $1.2 billion to settle lawsuit tied to Allen Stanford Ponzi scheme
February 27, 2023
Toronto-Dominion Bank has agreed to pay out US$1.205 billion to settle claims it was facing in connection to the Allen Stanford Ponzi scheme case.
The bank said it would pay the amount to the court-appointed Stanford Receivership Estate but denied any liability or wrongdoing in the multi-year Ponzi scheme orchestrated by financier and Stanford Financial Group head Allen Stanford.
CIBC beats expectations despite profit drop as bank earnings kick off
February 24, 2023
The Canadian Imperial Bank of Commerce saw higher revenue across most of its business lines and beat analyst expectations in the first quarter but posted a drop in net income on higher loan-loss provisions and a one-off charge to settle a lawsuit.
The bank reported net income of $432 million, down 77 per cent from $1.87-billion, or $2.01 per share, a year ago for the three-month period ended Jan. 31.
‘Fast and furious’ bank stocks may be running out of road, analysts warn
February 23, 2022
Canada’s bank stocks might have gotten off to a flying start this year, but analysts suspect the tide may be turning against the Big Six as they prepare to report first quarter earnings starting this week.
“Yes, bank shares started off the year on the right foot, but we don’t believe that this Fast and Furious rally can last,” Scotiabank analyst Meny Grauman and co-author Felix Fang wrote in a Feb. 16. note to clients. “To quote the great Vin Diesel in Fast and Furious 4: Tokyo Drift, ‘You know this ain’t no 10-second race.’”
What executive shake-ups at the big banks could tell us about CEO succession planning
February 23, 2023
Change has been in the air in the senior ranks of Canada’s biggest banks in recent months, but industry watchers say it’s too early to tell whether the shake-ups are just routine business or signs that another succession surprise may be coming.
The first shock came in September, when the Bank of Nova Scotia announced that chief executive Brian Porter would retire and be replaced by Finning CEO Scott Thomson, with Thomson officially taking the helm this month.
‘Resilient and innovative’: Energy transition companies lead the pack on TSX Venture 50 list
February 21, 2023
Energy and mining companies with a focus on the green transition have made a strong showing on this year’s Venture 50 list, an annual ranking of the top performing companies on the TSX Venture Exchange.
The list puts the spotlight on some of the lesser known stars among the 3,000-plus publicly traded companies in Canada. This year’s crop, which is broken down into five sectors of 10 companies each, saw an average return of 73 per cent, with mining and energy leading the way with gains of 174 per cent and 89 per cent respectively.
Home Capital posts higher-than-expected provisions for bad loans in sign of mortgage market stress
February 16, 2023
Alternative lender Home Capital Group Inc. set aside more money for bad loans in the fourth quarter than it has at any time since the Financial Crisis in another sign that stresses are forming in the economy.
Provisions for credit losses came in at $10.4 million, doubling the street’s expectations of $5 million. These higher-than-expected provisions weighed on earnings, which clocked in at $0.95 per share in the three months ending Dec. 31 compared to analyst estimates of $1.04, falling 11 per cent from a year ago.
‘Read and react’: How Dave McKay is gearing RBC up for a shallow recession
February 16, 2023
The head of the country’s biggest bank is cautiously optimistic that the Canadian economy will avoid a serious contraction this year and says the lender will wait until the severity of the downturn is known before making any major changes.
“We’re not going to overreact to this,” Royal Bank of Canada chief executive Dave McKay said in a recent interview, before borrowing a phrase from his basketball coaching days to describe his approach.
Canada’s Outstanding CEO of the Year: Royal Bank of Canada’s Dave McKay
February 15, 2023
Bank executives aren’t always what they appear to be. The chief executive title conjures up an image of a stuffy numbers’ nerd focused on meeting targets, growing business lines and slashing unproductive expenses. Dave McKay, chief executive at the Royal Bank of Canada, certainly has banking in his blood. But when he’s not in the boardroom, you may find the 59-year-old catching a pick-up game on the basketball courts or jamming out on one of his 10 or so guitars.
Part-time B-ball player, part-time guitar player and full-time RBC lifer, McKay has worked his way up through the ranks since starting a co-op work placement in 1983 while studying computer programming. Since taking the top spot at the country’s biggest bank in 2014, he has led the acquisition of City National Corp. in 2015, launched a youth-focused skills program in 2017 and, most recently, won the hand of HSBC Canada, Bay Street’s belle of the ball, after weeks of courting from the other Big Six banks.
Half of Ontario insolvencies filed by millennials
February 13, 2023
After the pace of insolvency filings fell during the pandemic, it is now back on the upswing, with millennials leading the pack in 2022.
Millennials accounted for nearly half of total insolvency filings in Ontario (49 per cent) even though they only make up about a quarter of the 18-and-over population, according to the latest Joe Debtor report from Ontario-based insolvency firm Hoyes, Michalos & Associates. Total Ontario insolvencies rose by 15 per cent year over year while Canadian filings rose by 11 per cent and were notably higher than pre-pandemic levels.
How concerns over the housing market factored into the Bank of Canada’s latest rate decision
February 09, 2023
The Bank of Canada for the first time this week released a summary of Governing Council discussions that precede an interest rate decision, giving Canadians a glimpse of the process and a deeper understanding of the economic considerations at play. Here are five key takeaways from the bank’s inaugural summary of deliberations, released on Feb. 8, which address the central bank’s 25-basis-point rate hike in January.
Bank of Canada won’t be cutting interest rates anytime soon: Tiff Macklem
February 07, 2023
Bank of Canada governor Tiff Macklem said market participants who interpret his decision to take a break from raising interest rates as a prelude to cuts might be getting ahead of themselves.
Macklem used a speech in Quebec City on Feb. 7 to reiterate that the central bank would be taking a conditional pause on rate hikes over the months ahead to determine if enough has been done to reverse inflation. However, the governor was definitive that policymakers aren’t planning on cuts anytime soon.
Bay Street thinks Macklem will cut rates to counter a recession in 2023: Bank of Canada survey
February 06, 2023
Most of the biggest players on Bay Street think the Bank of Canada has stopped raising interest rates, and that governor Tiff Macklem will be compelled to cut borrowing costs before the end of the year to keep a mild recession from turning into a severe one.
The Bank of Canada on Feb. 6 released its first quarterly survey of “market participants,” giving the general public access to the kind of consensus forecast that financial data outfits such as Bloomberg LP and Thomson Reuters Corp. provide their clients. The central bank also will now have a benchmark of its own with which it can test its own assumptions.
Freeland pledges fiscal prudence to avoid feeding inflation even as demands for spending grow
February 03, 2023
Finance Minister Chrystia Freeland said Canada has a “once in a generation” moment to invest in infrastructure that will improve the delivery of health care and help combat climate change, but emphasized that she still must show restraint because the economy is at risk of sliding into a recession.
Freeland made the comments after a meeting with her provincial and territorial counterparts in Toronto on Feb. 3. The main topics on the agenda were investments in the green transition and health funding for provinces, a long-standing issue that at times has created friction between the federal and provincial governments and one that was put into greater focus during the pandemic.
IMF raises growth outlook for first time in a year, expects inflation has peaked
January 31, 2023
The International Monetary Fund says the outlook for the global economy has become rosier for the first time in a year amid positive signs from China’s reopening and economic resilience in other parts of the world.
The IMF is now projecting that world economic growth will fall from 3.4 per cent in 2022 to 2.9 per cent in 2023, which stands at least 0.2 percentage points higher than the forecast the organization made in October 2022. Growth is then expected to rebound to a pace of 3.1 per cent in 2024.
Ottawa’s spending is making the Bank of Canada’s job harder: John Manley
January 30, 2023
Former finance minister John Manley joined a growing group of “business Liberals” who are voicing their concerns over the federal budget, saying he thinks Prime Minister Justin Trudeau’s fiscal policy is making it harder for the Bank of Canada to contain inflation.
Manley, who now serves as a senior adviser at law firm Bennett Jones LLP, said he agreed with former Bank of Canada governor David Dodge’s report last week that concluded federal deficits are not sustainable for the next 10 years.
Friends of the Liberal government are adding to the pressure on Freeland to constrain spending
January 28, 2023
A growing chorus of voices associated with the Liberal camp are raising the alarm about the nation’s finances, adding to the pressure on Finance Minister Chrystia Freeland to restrain her colleagues’ propensity to spend.
The federal government’s response to the COVID crisis caused the deficit to widen to $328 billion, or 14.9 per cent of gross domestic product, the highest since 1945.
Why David Dodge thinks Ottawa’s plans to restore fiscal balance are on shaky ground
January 25, 2023
The federal government’s carefully charted path back to fiscal balance may be more precarious than it seems, and could be disrupted by a number of daunting economic challenges in the coming decade, former Bank of Canada governor David Dodge is warning.
Dodge, who now serves as a senior adviser to Bennett Jones LLP, noted in the firm’s Jan. 23 fiscal sustainability report that Ottawa will have to stick closely to a plan that limits spending and borrowing as laid out in its Fall Economic Statement if it hopes to bring high debts racked up during the pandemic back down to pre-COVID levels. But it still faces the prospect that the country’s two main fiscal anchors, the debt-to-gross domestic product ratio and a ratio measuring interest costs as a percentage of revenue, remain elevated for years.
Bank of Canada to release meeting summaries for first time ever — but is it enough to improve transparency?
January 24, 2023
The Bank of Canada is so poor at documenting what goes on when its leaders sit down to discuss interest rates that it gave itself a failing grade among its peers.
Monetary policy is made behind closed doors for obvious reasons. But in the spirit of transparency, most major central banks release minutes of their deliberations a few weeks after the decision is made. The Federal Reserve in the United States goes so far as to publish full meeting transcripts after five years.
Recession or soft landing? Economists divided as economy, labour market prove resilient
January 20, 2023
A few months ago, the only question about a looming recession was how bad it would be. But with the economy and labour markets showing surprising resilience, talk of a soft landing is making a comeback.
The latest hints of optimism come as recent data on jobs and growth have come in stronger than expected. In December, 104,000 new jobs were created in Canada, while preliminary figures showed the economy grew by 0.1 per cent in November, following an identical gain in October. The picture south of the border has been similar, with jobless claims unexpectedly falling in January.
Michele Romanow steps down as Clearco CEO as company lays off more staff
January 16, 2023
Dragons’ Den star and serial entrepreneur Michele Romanow is stepping down as chief executive of Toronto-based Clearco, nearly a year after she took on the position, but will stay on in a new role as co-executive chairman.
The move is part of a series of changes at the e-commerce financing company that includes cutting its workforce by 25 per cent as it continues a restructuring strategy.
Bank of Canada appoints economics professor Nicolas Vincent as external deputy governor
January 16, 2023
The Bank of Canada’s hunt for an external deputy governor ended this week, as the central bank appointed Montreal-based economics professor Nicolas Vincent to take on the new role.
Vincent will begin his two-year term in March, filling the void left by former deputy governor Timothy Lane, who retired in September. The Bank of Canada launched a search for an outsider to bring a different perspective to the Governing Council in August 2022, as the central bank confronts one of the most challenging economic environments it has ever faced.
FP Dealmakers: Bay Street looking for a rebound after ‘year of blandness’
January 16, 2023
Ask Canada’s top dealmakers what transpired in 2022 and you’ll hear talk of an economic “healing process” and the need for hand-holding to get their teams through. Yes, it was that kind of year, relatively speaking.
The momentum from a blockbuster 2021 dissipated right out of the gate, as rising interest rates and Russia’s invasion of Ukraine threw global markets into turmoil.
WonderFi confirms ‘preliminary’ discussions about potential mergers
January 13, 2023
Vancouver-based WonderFi Technologies Inc. says it has held merger discussions with various third parties, but that it will not identify them.
BNN Bloomberg reported that one of the potential suitors was Canadian cryptocurrency exchange Coinsquare, a deal that would create a Canadian crypto giant if it were to go through.
Canadian bank stocks’ reputation for outperformance takes a beating
January 11, 2023
Canadian bank stocks have earned a reputation for being outperformers over the years, but a string of lacklustre showings may have some investors rethinking their blind faith in the sector.
Last year was the fourth time in the past five years that the big banks have lagged the S&P/TSX Composite Index in price performance (not including dividends), but only the eighth time since 2000.
Incoming Scotiabank CEO sees room to refine international operations
January 09, 2023
Incoming Bank of Nova Scotia chief executive Scott Thomson says returns from the bank’s international strategy haven’t matched the risks and that he sees an opportunity to refine the business line going forward.
“We deployed a lot of capital into the international markets over the last 10 years, and the returns on that capital have not been commensurate with the risk that we’ve taken,” Thomson said during a fireside chat at the RBC Capital Markets 2023 Canadian Bank CEO Conference on Jan. 9. “There’s a lot of reasons for that … a lot of geopolitical reasons, a lot of macro reasons, a lot of execution reasons, but that’s something that we need to be really thoughtful about going forward.”
Bill Morneau slams Liberal government’s COVID-19 policy for putting ‘popularity contest’ over fiscal prudence
January 09, 2023
Former finance minister Bill Morneau has taken aim at the Liberal government’s financial aid during the COVID-19 pandemic.
Morneau argues that policymakers put scoring “political points” and public perception over sound fiscal policy with its federal aid programs in his upcoming book to be released Jan. 17. He describes growing tensions between him and Prime Minister Justin Trudeau, calling it one of the worst moments in his political life leading up to his departure in the summer of 2020 amid the WE Charity scandal.
Why Laurentian’s CEO thinks 2023 will be a back-to-basics moment for Canada’s banks
January 03, 2023
Rania Llewellyn is no stranger to taking the helm in choppy waters.
She was appointed chief executive of Laurentian Bank of Canada at the end of October 2020 during the depths of the COVID-19 pandemic and has steered the country’s seventh-largest bank through the uncertainty of 2022.
Llewellyn describes the experience of leading a smaller bank as “driving a speedboat rather than a big cruise ship,” which does give her more leeway to react to choppy waters quicker than perhaps the Big Six can. Nevertheless, Laurentian faces the same trends and challenges. Here’s what she’s bracing for as she charts a path for 2023.
Apocalypse now? Canadians turn to cash as a hedge against chaos
December 30, 2022
Instead of killing cash, the pandemic might have saved it.
Canadians used bills and coins to make only 22 per cent of payments in 2021, compared with 33 per cent in 2017 and 54 per cent in 2009, according to the Bank of Canada’s latest Methods of Payments Survey, a comprehensive analysis of the payments landscape that the central bank conducts every four years.
Why OSFI head Peter Routledge is ‘optimistic and wary at the same time’ heading into 2023
December 28, 2022
Soaring interest rates, a housing downturn, war in Europe and the prospect of a global recession were among the threats to the financial system that Peter Routledge had to contemplate in 2022. As 2023 dawns, that list isn’t getting any shorter. The Financial Post’s Stephanie Hughes spoke to the head of the Office of the Superintend of Financial Institutions about the year that was and the risks he sees just over the horizon. This interview has been edited and condensed.
Economists expect the worst is over for headline inflation, but core inflation could prove more persistent
December 20, 2022
Economists at Canada’s biggest banks believe the pace of headline inflation slowed in November as interest rate hikes made over the past year continued to take hold. But they expect pressure on core inflation to remain persistent, casting a potential shadow over what otherwise should be good news for Canadian consumers.
The rough consensus among economists is that numbers released on Dec. 21 will show inflation eased in November from the 6.9 per cent annualized pace posted in October.
OSFI head flags rising cost of debt for strained households as biggest risk heading into 2023
December 19, 2022
Peter Routledge says he’s paid to be a worrier. And there’s plenty to worry about these days. At any given time, the head of Canada’s federal banking regulator may be fretting over issues ranging from the risk climate change poses to the financial system to the implications of the digitization of banking services. But the single biggest thing keeping him up at night, he says, is how high household debt is going to play against the backdrop of the fastest interest rate hiking cycle in recent memory.
Routledge, who took the helm at the Office of the Superintendent of Financial Institutions in June 2021, says that while higher borrowing costs are putting a strain on the already stretched pocketbooks of Canadians, the silver lining is that regulators have had the tools needed to handle the financial turbulence.
OSFI leaves mortgage stress test unchanged as safety buffer against growing risk
December 15, 2022
Canada’s federal banking regulator is leaving the stress test for uninsured mortgages unchanged, citing economic uncertainty and increasing vulnerabilities in the financial system.
The Office of the Superintendent of Financial Institutions said Thursday the minimum qualifying rate — a buffer that ensures a borrower will still be able to afford the mortgage if interest rates rise — would remain the greater of either the mortgage contract rate plus two per cent, or 5.25 per cent.
BMO’s plans to fund Bank of the West deal shaken by surprise OSFI capital-buffer changes
December 14, 2022
The Bank of Montreal’s plan to fund its US$16.3 billion Bank of the West deal was going smoothly — until Canada’s financial watchdog threw a wrench in the works with a surprise regulatory change last week that left the Big Six bank with little choice but to raise more capital.
On Monday, BMO announced it was raising $3.15 billion in an offering of common shares that includes both a public offering and private placement. The move followed the Office of the Superintendent of Financial Institutions’ decision to raise the capital buffer that financial institutions must hold to three per cent from 2.5 per cent, citing increased risks from high household indebtedness and the rapid rise in interest rates. It also extended the potential range of the buffer to between zero and four per cent, from a prior range of zero to 2.5 per cent.
Tiff Macklem says elevated debt might make households more sensitive to rate hikes
December 13, 2022
Bank of Canada governor Tiff Macklem said it’s “plausible” that higher interest rates could slow the economy faster than in the past, while also acknowledging that macroeconomic forces such as a shift in supply chain dynamics could make it harder to get inflation back to the central bank’s two per cent target.
“There’s certainly a case to be made that (the effect of rate increases) could be stronger than the past and the main reason for that is household indebtedness has increased considerably since the last time interest rates were this high,” Macklem told reporters following a speech hosted by the Business Council of British Columbia in Vancouver on Dec. 12.
Here’s where David Dodge thinks the economy and the central bank are heading next
December 13, 2022
The Bank of Canada’s attempts to curb inflation won’t hit the economy in full until the middle of next year, but should be significant enough that only a small additional rate hike is required, according to former central bank governor David Dodge.
Dodge, who now serves as a financial advisory to the law firm Bennett Jones LLP and co-authored their Fall outlook report, said the central bank struck the right note after its 50-basis point hike on Dec. 7., making future hikes data dependent.
Laurentian Bank shares surge 6% on strong earnings report
December 09, 2022
Laurentian Bank of Canada reported a profit of $55.7 million in its fiscal fourth quarter, swinging from a $102.9 million net loss a year ago as revenues rose slightly.
On an adjusted basis, the bank reported earnings of $57.8 million and $1.31 per share in the three months ending October 31, up from $1.06 per share last year. Analysts were expecting $1.24 on average. Revenues were up three per cent to $257.1 million.
OSFI raises capital buffer for big banks to 3% as household debt risks rise
December 08, 2022
The Office of the Superintendent of Financial Institutions raised the capital buffer financial institutions must hold to three per cent as high household indebtedness and a rapidly rising rate environment pose greater risks.
The financial watchdog also increased the capital buffer’s range, or the policy tool to keep the country’s financial stability in check, to between zero and four per cent starting February 2023, rising from the previous range of zero to 2.5 per cent.
Mortgage rates to soar higher after latest interest rate increase, but end of hiking cycle in sight
December 07, 2022
The Bank of Canada’s half-point interest rate hike on Wednesday spells further trouble for indebted homeowners and those trying to get into the housing market, who will now have to contend with still higher mortgage rates and borrowing costs.
Economists, however, highlighted a silver lining that the latest outsized rate increase — which brought the central bank’s trend-setting policy rate to 4.25 per cent — could signal the end of the hiking cycle.
‘Exaggerated’ pandemic benefits fuelled ‘excess demand,’ driving steeper rate hikes: Scotiabank
December 06, 2022
One of Bay Street’s top economists estimates that the Bank of Canada’s benchmark interest rate is headed to 4.25 per cent, and more than a percentage point of the increase will have been necessitated by a need to offset “excess demand” created by what appears to have been overly generous COVID benefits.
“Pandemic support programs for firms and households are creating the excess demand that the country is experiencing,” Bank of Nova Scotia chief economist Jean-François Perrault concludes in a new assessment of Canada’s inflation scare, published Dec. 5. “Absent from these support measures, Canada would still be in excess supply.”
Big banks brace for a downturn that hasn’t fully arrived
December 05, 2022
Canada’s biggest banks are taking steps to prepare for a downturn, despite mixed economic conditions that have boosted some aspects of their business while pressuring others.
The Big Six reported earnings last week that reflected the choppy economic picture, with some beating expectations and others missing. On one side, higher labour costs and increased provisions for credit losses dragged on results; on the other, rising interest rates boosted net interest margins, a significant driver of profitability.
Fall in capital markets profit drags on BMO earnings
December 01, 2022
The Bank of Montreal posted lower adjusted earnings for the fourth quarter of 2022 as capital markets revenue fell and increased loan-loss provisions offset gains from rising revenue.
The bank’s adjusted earnings were $2.14 billion or $3.04 per share in the three months ending Oct. 31., down from $2.22 billion or $3.33 per share a year ago. On average, analysts had been expecting $3.09 per share. BMO also boosted its quarterly dividend by four cents to $1.43 per share.
TD Bank hikes dividend as profit beats expectations
December 01, 2022
Toronto-Dominion Bank reported a year-over-year profit boost of 76 per cent to $6.67 billion in the fourth quarter, beating analyst expectations.
The bank’s adjusted earnings came to $4.06 billion in the three months ending Oct. 31, or $2.18 per share, beating average analyst expectations of $2.07 per share. TD Bank also raised its quarterly dividend to 96 cents from 89 cents, payable on January 31, 2023.
CIBC hikes dividend, but profit falls on higher costs and loan-loss provisions
December 01, 2022
The Canadian Imperial Bank of Commerce’s profit fell 18 per cent to $1.19 billion in its fourth quarter as results were dragged down by higher expenses and more money set aside for bad loans.
The bank’s adjusted earnings were $1.31 billion in the quarter ending Oct. 31, or $1.39 per share, falling short of average analyst expectations of $1.72 per diluted share, according to estimates compiled by financial markets data firm Refinitiv. Despite the miss, CIBC raised its dividend by two cents to $0.85 cents per share, payable on Jan. 27, 2023. For the full 2022 year, CIBC’s net income slipped three per cent to $6.2 billion since last year.
National Bank raises dividend but misses expectations
November 30, 2022
The National Bank of Canada reported a net income of $738 million in its fourth quarter, down four per cent from a year ago as the bank set aside more money for potential bad loans.
While the bank missed analyst expectations, it raised its quarterly dividend.
RBC hikes dividend as profit beats expectations
November 30, 2022
The Royal Bank of Canada reported a profit of $3.88 billion in its fourth quarter, beating analyst expectations and boosting its dividend.
The bank’s adjusted earnings were $2.78 per share in the three months ending Oct. 31, beating average analyst expectations of $2.69 per share. RBC said these quarterly earnings were relatively flat compared to the same quarter a year ago. Net income for the full fiscal year slipped two per cent from last year to $15.8 billion as volatile markets hit the bank’s capital markets segment.
FP Answers: The Bank of Canada lost $522 million in three months — here’s why
November 29, 2022
Tiff Macklem‘s “announcement” during testimony at the House finance committee last week that the Bank of Canada, which typically sends about $1 billion to the federal treasury each year, is about to record losses for the first time in its 87-year history was news only because it was the first time the governor described the state of the central bank’s finances himself.
Anyone watching the evolution of the Bank of Canada’s balance sheet could see the value of the central bank’s liabilities were climbing faster than the value of its assets. The Toronto Star was the first to do the math, forcing the central bank to acknowledge in an article published on Sept. 12 that its net interest income was on track “to be negative when our third-quarter results are published on Nov. 29.” The Financial Post followed with a report of its own a few days later. The Globe and Mail published a story on Nov. 15.
Royal Bank of Canada to buy HSBC Bank Canada for $13.5 billion
November 29, 2022
HSBC Holdings PLC has entered into an agreement to sell its Canadian business to the Royal Bank of Canada in a $13.5 billion cash deal expected to close by late 2023.
Canada’s biggest bank will acquire all of HSBC Canada’s shares, and its earnings from June 30 will accrue to RBC. The purchase price is 9.4 times HSBC Canada’s adjusted 2024 earnings of $1.4 billion, RBC said.
Scotiabank beats expectations despite drop in profit
November 29, 2022
The Bank of Nova Scotia’s net income slipped to $2.09 billion in the fourth quarter, down 18 per cent from the year before as recession concerns set in.
However, despite the headwinds that led the bank to boost provisions for bad loans, earnings still beat analyst expectations.
Analysts cautious on big bank earnings amid recessionary headwinds
November 28, 2022
Analysts are erring on the side of caution in their earnings forecasts for the Big Six banks, as recession risks loom and a combination of factors are working against the country’s major lenders.
At least two analysts have revised their earnings expectations for the fourth quarter, pointing to volatile markets, the need to set more money aside for bad loans and and increasing funding costs among other headwinds.
CBA head calls for ‘more carrot, less stick’ when it comes to tax policy on banks
November 24, 2022
The head of Canada’s primary banking lobby group is calling on the federal government to take a more holistic approach to tax policy as it effects the financial sector to boost competitiveness and more effectively incentive the push toward net zero.
Anthony G. Ostler, president and chief executive officer Canadian Bankers Association, made the case that a review of Canada’s tax system to align it with Canada’s shifting economy would encourage more growth and investment in the country.
Tiff Macklem acknowledges the Bank of Canada is losing money for first time
November 24, 2022
Bank of Canada governor Tiff Macklem acknowledged Wednesday that the central bank is on track to lose money for the first time in its history.
Macklem said the Bank of Canada’s net interest income — the difference between interest revenue from assets and its cost of servicing liabilities — will soon turn negative, if it hasn’t already. He insisted, however, that the dynamic wouldn’t shake the central bank’s ability to conduct monetary policy and its decisions would be guided by its price and financial stability mandates.
How Stephen Poloz thinks Canada can solve labour shortages and its lagging loonie
November 23, 2022
Former Bank of Canada governor Stephen Poloz’s tenure coincided with the emergence of two economic challenges that initially seemed like anomalies, but now appear to be permanent features.
Poloz took the helm of the central bank in June 2013, just in time to watch the loonie plummet from 97 cents against the greenback to 71 cents by the start of 2016, as the country grappled with the ripple effects of a serious recession in Alberta amid an oil downturn.Poloz took the helm of the central bank in June 2013, just in time to watch the loonie plummet from 97 cents against the greenback to 71 cents by the start of 2016, as the country grappled with the ripple effects of a serious recession in Alberta amid an oil downturn.
Bank of Canada’s Carolyn Rogers flags first-time homebuyers facing ‘trigger rates’ as risk
November 22, 2022
Bank of Canada senior deputy governor Carolyn Rogers acknowledged that rising rates were putting a greater strain on young Canadians — especially if they bought a home during the pandemic.
Rogers flagged rising household debt rates as a growing financial system risk, which escalated during the pandemic as Canadians piled into mortgages when interest rates were at historic lows. The central bank’s aggressive rate hiking cycle, which brought the policy rate from near-zero at the start of the year to 3.75 per cent, is beginning to take its toll on highly indebted young Canadians.
Smith Financial’s deal for Home Capital shakes up alternative lending space
November 21, 2022
One of the biggest players in Canada’s non-bank mortgage market is giving the sector a vote of confidence in the face of a housing downturn that has put pressure on origination volumes and share prices.
Smith Financial Corp., a holding company controlled by First National Financial Corp. co-founder Stephen Smith, announced Monday that it was acquiring alternative lender Home Capital Group Inc. for $1.7 billion.
‘Team Transitory’ holdout Stephen Poloz says the Bank of Canada is close to getting inflation under control
November 18, 2022
When inflation jumped out of the Bank of Canada’s comfort zone in the spring of 2021, governor Tiff Macklem assured Canadians that price pressures would be “transitory.”
Then, in November, when the year-over-year increase in the consumer price index surged to 4.7 per cent, he told CTV News that inflation would be transitory, but “not short lived.” By the time inflation hit a peak of 8.1 per cent this June, he had given up.
Why Canada’s inflation rate could go higher, not lower, in tomorrow’s data
November 15, 2022
The path of inflation may have hit a detour in October with economists predicting the pace of price growth will remain unchanged or even bump higher in data out Wednesday, despite aggressive rate hikes working their way through the economy.
Macklem has given two speeches since Nov. 10. Both were on the labour market, and both made the point that inflation is being driven — in part — by acute labour shortages, which have put upward pressure on wages.
Tiff Macklem turns tables on critics, calls on politicians, employers to boost supply of skilled labour
November 15, 2022
Bank of Canada governor Tiff Macklem has a message for employers and politicians: if you don’t like higher interest rates, then do something to expand the pool of available workers.
Macklem has given two speeches since Nov. 10. Both were on the labour market, and both made the point that inflation is being driven — in part — by acute labour shortages, which have put upward pressure on wages.
Three hall-of-fame investors share the lessons they learned along the way
November 14, 2022
Last month, three legendary Canadian investors were inducted into the Investing Industry Association of Canada’s Hall of Fame, which was established in 2013 to honour those who had made significant contributions to the investing community. The Financial Post’s Stephanie Hughes and Denise Paglinawan spoke to this year’s inductees about their careers and the lessons they learned along the way. These interviews have been edited and condensed for space.
Tiff Macklem says job market beginning to cool in fight against inflation
November 10, 2022
Bank of Canada governor Tiff Macklem said recent data show the labour market is cooling, and that he remains confident that an unusually high number of job vacancies absorb some of the negative impact of higher interest rates, signals the central bank thinks its efforts to constrain inflation are working.
“In recent months, we’ve seen initial signs that these exceptionally tight labour market conditions have started to ease,” Macklem said in a speech hosted by the Public Policy Forum in Toronto on Nov. 10.
Ottawa aims to balance fiscal restraint with targeted support amid darkening economic outlook
November 03, 2022
The federal government is aiming to strike a balance with targeted new supports and fiscal discipline as it charts a course for Ottawa’s finances over the next few years in the face of soaring inflation and a looming economic downturn.
Ottawa acknowledged in its Fall economic statement Thursday that inflation has risen much higher than projected in the Spring Budget, with the latest CPI reading sitting at 6.9 per cent in September. Interest rates around the world have risen sharply this year to combat these price pressures, prompting a global economic slowdown and expectations that Canada would see its own growth stall next year.
Aggressive Bank of Canada rate hikes could add more strain on Ottawa’s debt servicing
November 02, 2022
When Finance Minister Chrystia Freeland delivered the 2022 federal budget in April, the Bank of Canada had only just embarked on its aggressive hiking cycle and interest rates sat at a paltry 0.5 per cent. When she rises in the House of Commons Nov. 3 to unveil the government’s fiscal update, she’ll be facing a new financial reality.
In the seven months in between, the central bank’s policy rate has soared to 3.75 per cent and similar moves around the world are forcing governments to seriously consider the rising cost of servicing their debts and the burden of new deficits.
Bank of Canada is walking a fine line, but rates will go higher, says Tiff Macklem
November 02, 2022
Canada’s central bank is engaged in a delicate balancing act as it looks to prevent inflation from becoming entrenched while avoiding a sustained recession, Bank of Canada governor Tiff Macklem said in his opening remarks before a Senate committee on Nov. 1, where he discussed the Bank’s half-percentage point hike in October.
“Finally, we are trying to balance the risks of under- and over-tightening,” Macklem said. “If we don’t do enough, Canadians will continue to endure the hardship of high inflation. And they will come to expect persistently high inflation, which will require much higher interest rates and, potentially, a severe recession to control inflation. Nobody wants that.”
‘We’re not there yet’: Macklem signals more rate hikes as economists make bets on how high they’ll go
October 27, 2022
The head of the Bank of Canada made it clear that the mission to bring soaring inflation to heel is unfinished. Shortly after the central bank moved on a smaller-than-expected 50-basis-point interest rate increase, Tiff Macklem, the governor, declared that it is not yet the time to pivot from an emphasis on slowing growth, even though the central bank’s own forecast shows Canada is teetering on the cusp of a recession.
“This tightening phase will come to a close,” Macklem told reporters on Oct. 26. “We’re getting closer to that point, but we’re not there yet. So, we do expect interest rates will need to go up further and we will determine the pace based on developments going forward and I think we’ve been pretty clear on the key things we’re looking at.”
Bank of Canada swerves in ‘game of chicken’ with inflation: What economists say
October 26, 2022
The Bank of Canada surprised markets with a 50-basis point hike in its Oct. 26 rate decision, a smaller move than the 75-point hike many economists were anticipating. Its trend-setting policy rate now stands at 3.75 per cent.
The Bank acknowledged that while inflation is off its peak, it still remains too high. In the accompanying monetary policy report, the central bank is now expecting inflation to cool to three per cent in late 2023 before returning to the two per cent target by 2024.
Ontario announces ‘bold’ new plan to meet target of building 1.5 million homes
October 26, 2022
The Ontario government unveiled a series of new measures aimed at tackling the province’s housing supply shortage and affordability crisis on Tuesday, including plans to cut development costs and to allow property owners to build up to three residential units on a single lot without a bylaw amendment.
The government provided details on the new legislation, which largely targets red tape and municipal zoning laws that stall housing construction, this week.
Housing, mortgage sectors brace for more pain as Bank of Canada tees up another big rate hike
October 25, 2022
The Bank of Canada’s fight against inflation has weighed on Canada’s housing markets and mortgage providers, and with another supersized interest rate hike expected on Oct. 26, the pain isn’t likely over yet, analysts say.
The Bank has already hiked the policy rate by three percentage points over the course of the year, bringing it to 3.25 per cent. This aggressive tightening campaign has raised borrowing costs and taken the steam out of the country’s hottest housing markets as more prospective home buyers sit on the sidelines.
HSBC Bank Canada posts record profit in Q3 amid speculation over potential suitors
October 25, 2022
HSBC Bank Canada posted record pre-tax profit and robust revenue growth in the third quarter, weeks after confirming its global parent is exploring a sale of the Canadian unit.
Profit before tax grew by 27 per cent to $298 million over the same period last year, while total operating income rose 19 per cent to $665 million. Revenues grew across all of the company’s major business segments for the three-month period ending Sept. 30.
‘Whistling past the graveyard’: Bank of Canada expected to go big with October rate hike as recession risks loom
October 23, 2022
Canada’s top economists are expecting the Bank of Canada to deliver another outsized rate hike on Wednesday in its continued fight against decades-high inflation.
The central bank is expected to raise the policy rate by 50 or 75 basis points as part of the Bank’s strategy of front-loading rate hikes, but comes at a time when recession calls are growing louder. Some economists are expecting the Bank to take its foot off the gas following this rate decision.
RBC emerges as Bay Street favourite to buy HSBC Bank Canada
October 21, 2022
HSBC Holdings PLC’s Canadian unit has become the belle of the ball on Bay Street, as the country’s financial services heavyweights consider whether they want to become even bigger by taking advantage of HSBC’s announcement earlier this month that it’s open to selling is Canadian assets.
Each of the Big Six banks has had an initial meeting with HSBC to discuss the possibility of acquiring HSBC Bank Canada, which ranks behind them as the seventh-biggest lender, the Globe and Mail reported this week, citing two unnamed people who the paper said had knowledge of the process.
Mark Carney says fiscal discipline ‘imperative’ to combat global inflation, instability
October 20, 2022
Former Bank of Canada governor Mark Carney said prudent fiscal policy will be “imperative” to combatting global inflationary pressures and financial instability. The former central banker also argued it was the time to reduce pandemic support-driven deficits.
“In an environment where we have left the world of low-for-long interest rates (and) low volatility, in an environment where borrowing costs are going to be higher — in my judgment, higher not just in the short-term, but in the medium-term — fiscal discipline is imperative,” Carney said during testimony at the Senate banking committee on Oct. 20.
OSFI keeping close watch on mortgage lenders as rates rise, home prices cool
October 19, 2022
Canada’s banking regulator is raising red flags around growing risks in the mortgage market as interest rates rise and home prices cool. While the Office of the Superintendent of Financial Institutions did not announce new measures when it updated its residential mortgage underwriting infosheet this week, it emphasized the need for readiness to confront these emerging risks.
“(Federally regulated financial institutions) need to ensure that they are prepared to handle the potential implications of lower housing prices and higher interest rates,” the report read. “In particular, the level of loss experienced by lenders not only depends on the likelihood of a default, but also how much of the loan the banks would lose in case of a default.”
FP Answers: How high could interest rates go?
October 18, 2022
Rising interest rates this year have been putting pressure not only on Canadian consumers, but business owners as well.
A Canadian Federation of Independent Business poll taken after the Bank of Canada raised it key rate to 3.25 per cent in September found that seven out of 10 small business owners expect interest rate hikes to have a negative impact on their operations.
Growing debt could threaten stability as rates rise, says Bank of Canada’s Rogers
October 18, 2022
The Bank of Canada is closely monitoring debt burdens being shouldered across the economy over concerns they could become a threat to financial stability as interest rates rise, senior deputy governor Carolyn Rogers said this week, an acknowledgement of the balancing act the central bank faces as it combats inflation.
“The two (financial stability risks) that come to mind and the two that I think are still on our minds at the federal level would be leverage and liquidity, so high levels of debt,” Rogers said during an Oct. 17 Toronto Centre panel discussion in Toronto. “This is at the consumer level, corporate level and at the sovereign level, and that is also at the domestic and international level.”
Pre-construction condo flippers may be left holding the bag as buyers disappear
October 14, 2022
Nervous investors looking to offload their pre-construction condos in the secondary market may find themselves out of luck, industry watchers say, as a softening real estate market and rising interest rates send buyers to the sidelines.
A number of real estate agents in the Greater Toronto Area told the Financial Post they have been seeing a surge of calls asking about “assignment sales,” a kind of legal transaction in which the original pre-construction condo buyer “assigns” or transfers the rights and obligations of the purchase agreement to another buyer.
‘Worst is yet to come’: IMF slashes growth outlook as recession risks grow
October 11, 2022
The International Monetary Fund slashed its forecast for 2023 global economic growth to 2.7 per cent from 2.9 per cent Tuesday amid growing concerns that high inflation and rising interest rates could tip some countries’ economies into recession.
“This is the weakest growth profile since 2001 except for the global financial crisis and the acute phase of the COVID-19 pandemic and reflects significant slowdowns for the largest economies,” the IMF said in its October world economic outlook, which forecasts global growth will slow from six per cent in 2021 to 3.2 per cent this year, before falling further in 2023.
Low-flying loonie means interest rates could stay higher for longer
October 06, 2022
If battling decades-high inflation wasn’t hard enough, the Bank of Canada is now facing the added burden posed by a struggling loonie, which has plunged in recent weeks.
The Canadian dollar fell to a two-year low below 73 U.S. cents at the end of September. Though it has clawed its way back above the 73-cent mark in recent days, the drop from the 77-cent range in which it was trading earlier last month may add to the country’s inflation woes by making imports — especially those from the United States, Canada’s biggest trading partner — more expensive.
Big Six banks likely to kick tires in sale of HSBC’s Canadian unit, but not all a fit
October 05, 2022
The Big Six banks would be the most likely candidates to pursue a takeover of HSBC Holdings PLC’s high-earning Canadian operations, but not all have the same motivation to strike a deal, analysts said Tuesday after the British financial services giant confirmed reports it was exploring a potential sale of the unit.
“We are currently reviewing our strategic options with respect to our wholly owned subsidiary in Canada,” a spokesperson for the bank said in a statement. “Amongst the options being explored is a potential sale of HSBC Group’s 100 per cent equity stake in HSBC Bank Canada…. The review is at an early stage and no decisions have been made.”
Global market storm gathers force as virtually no asset class is spared
September 23, 2022
Global markets came under more pressure Friday as the mood over the economic outlook around the world turned sour. Equities, currencies, other asset classes – virtually nothing has been spared in the economic cyclone that has been mounting over the past few weeks. Here’s what economists and analysts have their eyes on during this trading day:
Inflation tops list of concerns for Canadian businesses in third quarter: survey
September 22, 2022
A majority of Canadian companies put inflation on the top of their list of concerns for the remainder of the year, signalling the country’s year-long struggle with inflation is putting a strain on business owners.
The Canadian Survey on Business Conditions, a quarterly poll of some 17,000 businesses conducted by the Canadian Chamber of Commerce and Statistics Canada, found that 60 per cent of respondents considered high inflation to be the biggest near-term challenge – the highest level of concern recorded since the survey began in the Spring of 2020.
Inflation cools more than expected in Canada
September 20, 2022
Canada’s headline inflation rate cooled for the second month in a row in August, running at an annualized pace of 7.0 per cent, lower than economist expectations of 7.3 per cent and down from July’s reading of 7.6 per cent.
The decline in the consumer price index was the largest since early in the COVID-19 pandemic, Statistics Canada said Tuesday.
The drop largely stemmed from lower gasoline prices, which fell 9.6 per cent from the month before, the largest monthly decline since April 2020. Gasoline prices fell the furthest in Saskatchewan and Alberta. The price of gasoline, however, remains 22.1 per cent higher than last year.
Inflation has likely slowed, but economists warn we’re not out of the woods yet
September 19, 2022
Economists at Canada’s biggest banks believe the country’s inflation rate cooled for the second month in a row in August, with consensus expectations from Bloomberg surveys for Sept. 20’s CPI announcement running at 7.2 per cent, down from the 7.6 per cent annualized pace reported in July.
The anticipated decline comes as global supply chain disruptions are beginning to ease and lower commodity prices are working to cool the consumer price index, the economy’s main gauge on the growth of the cost of goods. Those easing pressures have led the Royal Bank of Canada’s economics team to conclude that the recent burst of inflation likely topped out at 8.1 per cent in June.
The Bank of Canada is losing money for the first time ever on rising rates
September 16, 2022
The Bank of Canada’s historic fight against deflation during the COVID recession, and now the startling inflationary surge that has come in the recovery’s wake, will likely bring to an end the central bank’s untarnished streak of profitability.
“We expect the bank’s net interest income to be negative when our third-quarter results are published on Nov. 29,” the central bank said in a statement that was initially provided to the Toronto Star. “The bank’s interest expense is growing because of increases in the interest rate that we pay on deposits.”
U.S. inflation could push Bank of Canada to move policy rate higher than 4%
September 14, 2022
If the U.S. economy sneezes, Canada could catch a cold. That’s what economists are wary of as they look over this week’s U.S. consumer price index readings and consider how they might push the Bank of Canada to get tougher in its fight against inflation.
While the growth of U.S. CPI slowed in August to an annualized pace of 8.3 per cent, down from 8.5 per cent in July, price pressures still clocked in hotter than economist expectations of 8.1 per cent. The release sent stocks plunging the most since 2020 and have prompted economists on both sides of the border to revise their rate-hike expectations for the rest of the year, with some predicting interest rates will move north of the four per cent mark.
The Merge is upon us: Here’s what you need to know about the major Ethereum network upgrade
September 14, 2022
This week, the Ethereum blockchain is expected to finally undergo a long-awaited upgrade known as “The Merge.” The transition, which will shift the network to a proof-of-stake system from the current proof-of-work method, is expected to cut down on costs and energy use and make it possible to grow the ecosystem more quickly. Stephanie Hughes breaks down the details of the upgrade, who it helps and who it hurts.
Wages key to pace of Bank of Canada’s remaining rate hikes
September 12, 2022
Wages appear set to determine the pace at which the Bank of Canada raises interest rates over the rest of the year.
Bank of Canada senior deputy governor Carolyn Rogers said last week that the central bank is wary of a wage-price spiral, as workers take advantage of a record level of job vacancies to insist on salary increases that match this year’s spike in the cost of living. That could cause inflation to become entrenched, as employers likely would seek to recoup higher labour costs by charging more for goods and services.
Bank of Canada’s Carolyn Rogers says inflation won’t come down overnight
September 08, 2022
If Canadians were expecting a quick fix to decades-high inflation, they may be disappointed. Bank of Canada senior deputy governor Carolyn Rogers told Canadians that interest rate hikes take time to work their way through the economy.
In a Sept. 8 speech before Calgary Economic Development, Rogers said the policy rate decisions the central bank is making right now could take up to two years to have their full effect on inflation.
Bank of Canada raises rate 75 bps and signals more hikes to come
September 07, 2022
The Bank of Canada delivered another supersized hike on Wednesday, raising the policy interest rate by 75 basis points to 3.25 per cent, the highest since the global financial crisis.
The bank also signalled it was continuing its quantitative tightening policy and that more rate hikes would follow in an ongoing effort to stamp out decades-high inflation.
Three key things to watch in the Bank of Canada’s September rate decision
September 06, 2022
The Bank of Canada has embarked on a series of supersized rate hikes this year in a bid to tame inflation, but its upcoming policy rate decision on Sept. 7 comes as the economic picture has started to shift: inflation dipped below the eight per cent mark to an annualized pace of 7.6 per cent in July, while the country’s economic growth lost its momentum in the second quarter. Given these developments, here are some of the key questions on the minds of economists and market analysts ahead of this week’s decision.
BMO misses estimates as volatile markets weigh on wealth management, capital markets business
August 30, 2022
The Bank of Montreal posted lower net income for the third quarter on Tuesday, as volatile markets hurt its wealth management and capital markets segments and an acquisition-related charge outweighed solid growth in its core banking operations.
BMO’s net income slipped 40 per cent to $1.37 billion for the three months ending July 31, with the bulk of the decline attributed to an after-tax loss of $694 million tied to its $16.3-billion deal to acquire U.S.-based Bank of the West. The loss stemmed from interest rate changes between the deal’s announcement to its closing.
Banks continuing to put faith in Canadian consumers, despite growing economic headwinds
August 30, 2022
The Canadian consumer remains well positioned to take on an economic downturn even though inflation is running at multi-decade highs and some surveys suggest more people are feeling the financial pinch.
A common theme among Canada’s banking executive teams during third-quarter results announced last week was their confidence in the resilience of consumers, who are still enjoying larger-than-normal savings buffers and low impaired loan rates. Economic factors, including a strong job market, are also driving optimism.
Posthaste: Bank of Canada could put rate hikes on pause after September, CIBC says
August 30, 2022
Good morning!
Could the upcoming Bank of Canada interest rate decision in September be the last bump up in the central bank’s current rate hiking cycle? At least one analyst at the Canadian Imperial Bank of Commerce seems to think so.
CIBC’s managing director and head of fixed income, Ian Pollick, said in an Aug. 22 note his team suspects a “narrative shift is coming” and forecasts the bank will put a pause on its rate hiking cycle after hiking 75 basis points on Sept. 7. This would bring the policy rate up to 3.25 per cent, matching the bank’s previous guidance that the benchmark rate could move above neutral at between two to three per cent — a reading that would neither help nor hinder economic growth.
TD profit beats analyst expectations amid gains from higher interest rates
August 25, 2022
Toronto-Dominion Bank’s net income slipped about nine per cent to $3.21 billion in the third quarter from last year on rising costs and larger stockpiles of cash being set aside for sour loans.
The bank’s adjusted earnings came to $2.09 per share, beating average analyst expectations of $2.04 per share.
CIBC tops expectations even as profit gets weighed down by higher credit loss provisions
August 25, 2022
Canadian Imperial Bank of Canada’s net income slipped four per cent year over year to $1.67 billion in the third quarter, joining other banks reporting sliding profits caused largely by larger provisions for credit losses.
On an adjusted basis, the bank’s earnings were $1.85 per share in the three months ending July 31. Analysts on average were expecting $1.82 per share.
National Bank profit dips slightly from a year ago
August 24, 2022
The National Bank of Canada’s net income slipped two per cent year over year to $826 million in its third quarter as the bank set aside more cash for bad loans on a gloomier economic outlook.
National Bank’s adjusted diluted earnings reached $2.35 per share in the three months ending July 31. Analysts on average had been expecting $2.34 per share. Growth across all the bank’s main business lines blunted the impact of higher provisions for credit losses.
RBC profits slip on market volatility, shored-up loan loss provisions
August 24, 2022
The Royal Bank of Canada’s net income fell to $3.58 billion in the third quarter amid lower earnings in its capital markets and banking segments, and the bank also set more money aside for bad loans as the economic outlook begins to darken.
Adjusted earnings slipped to $2.55 per share in the three months ending July 31 compared to average analyst expectations of $2.67 per share.
Scotiabank profits rise, but credit loss provision gets boost on ‘less favourable’ economic outlook
August 23, 2022
Bank of Nova Scotia’s net income jumped from last year to $2.59 billion in the third quarter, largely fuelled by growth in its international and Canadian banking segments, while it shored up provisions for credit losses at the same time.
Adjusted earnings rose four per cent year over year to $2.10 per share in the three months ending July 31 — analysts had been expecting $2.11 per share — but it slipped quarter over quarter from the $2.76 billion recorded in the three months ending April 30.
Rising recession risks could make Canadian bank executives change their upbeat tune
August 22, 2022
Canada’s biggest banks have maintained a relatively upbeat view of the state of the economy despite growing concerns that rising interest rates may trigger a recession. But as they prepare to report third quarter results this week, many bank watchers are wondering if they are about to change their tune.
Analysts at the Royal Bank of Canada raised the question in their Aug. 15 preview note titled “Will the banks deny a recession is coming?”
BMO looks to tap newcomer talent pool with refugee, immigrant recruitment program
August 18, 2022
The Bank of Montreal has another tactic in the financial sector’s war for talent: recruiting refugees.
BMO Financial Group launched its BMO Newcomer Talent Program last week, seeking to recruit displaced people, immigrants and refugees to bank roles in Canada and the U.S. The campaign comes at a time when crises across the globe have more refugees resettling in North America and as the banking industry grapples with a talent shortage.
To HODL or not to HODL? Canada’s bitcoin miners tinker with their strategies amid crypto downturn
August 18, 2022
Canada’s major crypto miners are shaking up their strategies but maintaining a focus on growth as they attempt to cope with a steep downturn in crypto prices that has led to significant quarterly losses as they revalue their balance-sheet holdings.
Hut 8 Mining Corp. and Bitfarms Ltd. posted wider net losses of $88.1 million and $142 million respectively for the three-month period ending June 30, even as both reported marginally higher revenues. Those were much steeper than the $20.4 million and $3.7 million the companies lost in the same period a year ago.
‘Our job is not done yet’: Tiff Macklem says Bank of Canada has more to do to tame inflation
August 16, 2022
Bank of Canada governor Tiff Macklem called evidence that inflation decelerated in July a “relief,” but stopped well short of declaring victory in his year-long struggle with elevated cost pressures.
Macklem was responding to the latest release of Statistics Canada’s consumer price index, which increased 7.6 per cent in July from a year earlier, compared with 8.1 per cent the previous month, representing the first year-over-year decrease since June 2021.
Cooler inflation won’t sway Bank of Canada from another jumbo hike in September, economists say
August 16, 2022
From hopeful remarks of peaking price pressures to warnings of becoming too complacent, Bay Street economists are reacting to the July inflation readings, which clocked in at a relatively cooler pace of 7.6 per cent compared to 8.1 per cent in June, according to Statistics Canada. The cool-off has largely been characterized as a gasoline story, seeing the pace of prices increase 35.6 per cent in July compared to the hotter pace of 54.6 per cent in June.
With core measures reaching a record 5.3 per cent in July and the agency warning that inflation remains broad-based, economists and business leaders say that the Bank of Canada’s mission to bring inflation back down to a two-per-cent reading is far from over. Here’s what the street had to say.
It’s back to basics in cryptoland, but the party is far from over
August 12, 2022
Ethan Buchman wants crypto to get back to basics. You might not guess it from his nebular garb, replete with galactic icons and smoking unicorns, but the co-founder of the blockchain ecosystem Cosmos — who is moments away from delivering a Kendall Roy-esque rap about the virtues of crypto sovereignty (“Crypto please, you better bow down on both knees”) — thinks the sector’s excesses were due to for a shakeout.
“There’s a lot of over-exuberance and optimism and hyper-financialization — and it’s nice to kind of clear a lot of that out and be able to focus again on, really, what we’re here to build and we’re trying to address: fundamental issues in the monetary and financial system,” Buchman said in an interview, before taking the stage at the Blockchain Futurist Conference in Toronto this week.
Trouble in ‘mortgage land’ as higher borrowing rates weigh and refinancings dry up
August 08, 2022
Canada’s housing market has been on a roll for years, but the Bank of Canada’s aggressive path of interest rate hikes and the possibility of a recession are ushering in a new economic reality that is beginning to weigh on mortgage demand, industry watchers say.
David Larock, a mortgage broker and president of Toronto-based Integrated Mortgage Planners Inc., said he is definitely seeing a drop-off in business in light of the new conditions, but said he’s seeing different effects when it comes to refinances versus new purchases.
Montreal sees ‘shift in market dynamics’ as home sales and prices slip
August 04, 2022
Montreal’s real estate market saw its slowdown intensify in July, joining other Canadian housing markets showing weakness in the latest data as interest rate hikes weigh on demand.
The median price of a single-family home in Montreal in July was $550,000, down $30,000 from the April peak, according to data from the Quebec Professional Association of Real Estate Brokers. Prices, however, are still 10 per cent higher than last year at this time.
Condominiums, often seen as a more affordable housing market entry point, saw their first price drop this year to a median of $391,500, though that is still nine per cent higher than last year.
Toronto home prices slip further as sales plunge 47% from last year
August 04, 2022
Home prices and sales in Canada’s most populous city continued to slide as economic uncertainty and rising rates put more would-be homebuyers on the sidelines.
Toronto home prices fell just over six per cent in July from a month earlier, hitting an average of $1.074 million, according to data from the Toronto Regional Real Estate Board. Despite the month-over-month decline, the city’s home prices managed to eke out a one per cent increase from July 2021.
The number of homes exchanging hands tumbled 47 per cent year-over-year in July and 24 per cent from a month earlier, seeing 4,912 units sold.
Vancouver home sales tumble, Calgary’s slide as rising rates and uncertainty take toll
August 03, 2022
The aggressive path of interest rate hikes continues to take a toll on Canada’s housing markets with home sales and prices slumping in July.
Vancouver and Calgary both saw declines in home sales as more buyers move to the sidelines and await a better opportunity to jump back into the market. This comes as the Bank of Canada hikes interest rates to combat inflation, including a supersized full percentage rate hike in July.
If U.S. recession is at hand, history suggests Canada won’t be far behind
July 28, 2022
U.S. GDP has now contracted for two consecutive quarters suggesting the American economy is in or near recession and dimming the prospects for a soft landing in Canada.
U.S. gross domestic product shrank 0.9 per cent year-over-year in the second quarter, following a 1.6 per cent decline in the first quarter, according to data released Thursday. Two straight quarters of decline are the rule of thumb for determining a recession, though an official ruling won’t be made for several months.
‘Calm before the storm’: Canadian banks expected to start shoring up reserves as consumer credit risks build
July 28, 2022
Canada’s big banks may need to start shoring up their loan-loss provisions as the economic cycle turns and they eye growing consumer credit risks, according to a new report from Toronto-based Veritas Investment Research.
“Given cycle highs in household leverage and the fastest pace of interest rate increases in over twenty years, we expect provisions for credit losses (PCLs) in the upcoming cycle to match or potentially exceed PCLs during the global financial crisis (GFC),” Veritas investment analyst Nigel D’Souza wrote in a July 26 note to clients.
‘Our credibility is being tested:’ Tiff Macklem says path to soft landing is narrowing
July 21, 2022
Bank of Canada governor Tiff Macklem acknowledged the central bank’s credibility has been shaken as inflation hits multi-decade highs and the institution faces criticism for not moving on rates sooner.
“Our credibility is being tested, and that was an important reason why we took an unusually large step last week to send a clear message to Canadians they can be assured that we’re going to control inflation,” Macklem told CTV News’s Evan Solomon on Wednesday following the June inflation figures.
Peak prices? ‘Not just yet’ — What experts say about our hot inflation
July 20, 2022
The Canadian economy saw the pace of inflation hit 8.1 per cent year over year in June, the fastest since January 1983. Despite the latest reading coming up short of economists’ expectations of 8.4 per cent, the consumer price index breaching eight per cent will add more pressure on the Bank of Canada to deliver another supersized rate hike in September.
Gasoline prices, up 54.6 per cent since June 2021, largely added fuel to the inflation fire, according to Statistics Canada. Oil prices peaked in the first week of June, though Canadians still saw a 6.2 per cent month-over-month increase in prices at the pump. Car costs also rose 8.2 per cent as demand outpaced supply, particularly with a global semiconductor shortage.
Carolyn Wilkins to lead review of Reserve Bank of Australia after ‘embarrassing’ forecast
July 20, 2022
Australia’s government has tapped former Bank of Canada senior deputy governor Carolyn Wilkins to lead a review of the Reserve Bank of Australia after the central bank faced criticism for its handling of inflation.
Wilkins, who now serves as an external member of the Financial Policy Committee at the Bank of England, joins a team of economists that will undertake the first wide-ranging review of Australian monetary policy since the 1990s.
Inflation expected to top 8%, heralding another supersized rate hike
July 19, 2022
Canada’s main gauge of inflation likely topped eight per cent in June, complicating Bank of Canada Governor Tiff Macklem’s efforts to convince businesses and households that price pressures will eventually ease.
Statistics Canada is scheduled to update its consumer price index on Wednesday morning. The monthly reports have become sources of alarm, as the year-over-year change has exceeded three per cent — the upper limit of the Bank of Canada’s comfort zone — for more than a year.
Home prices, sales slide in June as rising rates put more buyers on sidelines
July 15, 2022
Toronto real-estate agent Harry Sarvaiya was ready for higher interest rates, but not like this.
“I think the intention was shock,” Sarvaiya said a couple of days after the Bank of Canada raised the benchmark a full percentage point, the biggest increase since 1998. “In real estate, people didn’t expect it.”
Housing is probably the industry most sensitive to interest rates. That’s helpful when the economy is in trouble. The central bank can stoke demand quickly by dropping interest rates in the knowledge the Canadians will rush to buy houses — and then renovate them and fill them with big-ticket items such as appliances and furniture. Service providers such as banks, brokers, contractors, and movers all benefit.
What the Bank of Canada’s full percentage point hike means for the housing market and your mortgage
July 13, 2022
The Bank of Canada’s surprise move to hike its policy rate by a full percentage point — with no indication it will stop there — will add to the financial squeeze faced by indebted homeowners and likely push more buyers to the sidelines of already cooling real estate sector, market watchers said Wednesday.
The move, which sent a statement about the central bank’s resolve in combatting inflation, brought the policy rate to 2.5 per cent and came in higher than the 75-basis point hike most had expected.
Industry experts expressed shock at the size of the move.
CMHC expects 5% decline in home prices by 2023 if interest rates spike
July 12, 2022
A surge in interest rates could drag national home values down by five per cent by the middle of 2023, but would not lead to a collapse in prices, according to a new report from Canada’s housing agency.
The report, authored by Canada Mortgage and Housing Corp. chief economist Bob Dugan, forecasts scenarios for aggressive and moderate rate-hike paths, in each case projecting that a broader economic slowdown and raging inflation will weigh on prices and slow the pace of home construction.
Reverse mortgage market has plenty of room to grow, but risks abound
July 11, 2022
Canada’s reverse mortgage market has plenty of room to grow, but lenders should be wary of risks that are tied to its unique structure — such as longevity risk and appraisal risk — according to an analysis released this week by credit rating agency DBRS Morningstar.
In a July 11 report, analysts at the ratings agency noted that the penetration of the Canadian reverse mortgage market is lagging behind other developed economies (most notably the United Kingdom and Australia) with less than 0.5 per cent of more than six million senior households holding a reverse mortgage.
FP Dealmakers: Global economic uncertainty slams brakes on pandemic dealmaking boom
July 06, 2022
After two blockbuster years of pandemic fuelled activity including a record-breaking 2021, Canada’s dealmakers saw the action slow considerably in the first half of 2022, with deal counts dropping across the board.
Peter Miller, managing director at BMO Capital Markets and a veteran of the Canadian deal-making scene, said companies were spooked by a number of factors, including central bank dynamics, supply constraints and the potential for an overall economic downturn. The wildcard that proved to be the biggest surprise, however, was Russia’s invasion of Ukraine.
‘Toronto ecosystem is on fire’: Canadian tech shows resilience as storm clouds gather
June 27, 2022
If tech investors and start-up entrepreneurs were nervous about the recent market volatility, their concern was not immediately obvious during the sold-out Collision conference in Toronto last week.
Some 35,000 people from 130 countries flocked to Canada’s biggest city for the first live edition of the popular gathering of the technology industry’s jet set since the pandemic forced the event online in 2020. This year’s crowd was nearly 40 per cent bigger than the one that gathered in 2019, despite the destruction of hundreds of billions of dollars in paper wealth that has come with the collapse of tech stocks and crypto assets this year.
High inflation ‘is keeping us up at night,’ says Bank of Canada senior deputy governor
June 22, 2022
The Bank of Canada’s senior deputy governor said inflation is keeping the central bankers “up at night” and did not rule out a three-quarter point hike after data revealed CPI has hit a near 40-year high.
Carolyn Rogers reacted to the 7.7 per cent gain in the inflation rate hours after Statistics Canada released the data on Wednesday, calling it an “unwelcome number,” but not “an entirely unexpected number” at a Globe and Mail event.
Freeland says Ottawa ‘prepared to do more’ if inflation stays hot
June 20, 2022
Finance Minister Chyrstia Freeland said the federal government is prepared to take additional steps to offset the rising cost of living if inflation continues to accelerate.
“We are not closing any door,” Freeland told reporters in Toronto on June 20.
For now, however, the finance minister said she thinks she’s done enough. Last week, Freeland used her first speech specifically on the economy in months to highlight the $8.9 billion Prime Minister Justin Trudeau’s government intends to spend over the next couple of years on affordability measures.
FTX Exchange plans launch in Canada through Bitvo acquisition
July 17, 2022
Cryptocurrency giant FTX Exchange will be making its Canadian market debut after announcing it is acquiring Calgary-based Bitvo Inc.
In a statement, Bahamas-based FTX said the move is part of a global push in which it is targeting regulated companies in various jurisdictions. Bitvo became the first Alberta-based crypto asset trading platform to register as a restricted dealer in April 2022 and is also registered with the Financial Transactions and Reports Analysis Centre of Canada as a money services business.
Chrystia Freeland lays out $8.9 billion affordability plan to tackle inflation
June 16, 2022
Deputy Prime Minister Chrystia Freeland outlined the federal government’s $8.9 billion “Affordability Plan” aimed at helping Canadians shoulder the rising costs of living as inflation reaches multi-decade highs.
“Because of investments we have already made in the last two federal budgets, a new set of measures is coming into force right now to help the Canadians who need it most,” Freeland said during a keynote speech before the Empire Club of Canada on June 16. “This is $8.9 billion in new support for Canadians this year. This is our Affordability Plan.”
A lot must go right to achieve soft economic landing, David Dodge says
June 16, 2022
From the Russian invasion of Ukraine, to supply chain breakdowns and rampant inflation, policymakers are staring down an unprecedented mix of economic challenges — and they’re going to need a few things to break their way in order manage through it with as little pain as possible.
That’s one of the takeaways from the Spring 2022 Economic Outlook produced by Canadian law firm Bennett Jones, which examined several potential scenarios and the conditions it would take for each to play out.
Home sales plummet 22% as housing market continues to cool
June 15, 2022
Home sales and prices fell again in May, continuing a downward streak as housing markets across the country react to rising interest rates.
The nationwide average, non-seasonally adjusted price of a home clocked in at $711,000 for the month, slipping nearly five per cent from April, according to data from the Canadian Real Estate Association. However, prices managed to eke out a gain of just over three per cent from the same month last year.
WonderFi to become first Canadian-regulated crypto exchange listed on TSX
June 15, 2022
Vancouver-based WonderFi Technologies Inc. will soon become the first Canadian-regulated cryptocurrency marketplace and registered trading platform to list its shares on the Toronto Stock Exchange.
WonderFi, which owns Bitbuy Technologies Inc. and is backed by Shark Tank star Kevin O’Leary, will list with the ticker TSX:WNDR on June 22. O’Leary said he is seeing more investors demand diversification and options to invest within cryptocurrency assets.
B.C. home sales drop 35% as rising mortgage rates bite
June 13, 2022
Higher borrowing costs are continuing to weigh on British Columbia’s housing market as sales and home values slid in May over the previous month.
While the province’s average home price climbed more than nine per cent year-over-year to just over $1 million according to data from the British Columbia Real Estate Association, it was down six per cent from the $1.065 million recorded in April.
Ottawa cancels ultra-long bond sale as fiscal balance sheet improves
June 10, 2022
The Government of Canada has cancelled its ultra-long bond issue as it believes its borrowing needs are declining while its balance sheet improves on rallying commodities and higher inflation.
The government on Thursday said the bond, which was issued in 2014 as a 50-year note set to mature Dec. 1, 2064, would have its announced auction on June 16 cancelled, catching some fixed-income analysts by surprise.
Higher inflation, global tensions complicating financial system risks: Bank of Canada
June 09, 2022
The Bank of Canada warned that threats to the financial system have grown more complicated in recent months as the country grapples with tightening monetary policy, rampant global inflation, and geopolitical tensions. However, the biggest vulnerability remains higher household indebtedness, the central bank highlighted in its latest Financial System Review.
Policymakers said they are facing a “delicate balancing act,” as surging inflation will force them to raise interest rates over the months ahead, even though Russia’s invasion of Ukraine has rocked global stability and the pandemic continues to hinder economic growth.
Addition of Sobeys’ parent the latest leap in evolution of Scene+ loyalty program
June 08, 2022
The Scene+ loyalty program will soon be adding groceries to its roster of point-collecting services after Empire Co. Ltd. was brought in to join the Bank of Nova Scotia and Cineplex Inc. as a third co-owner, the three companies announced Tuesday.
Empire will be rolling out the Scene+ program across banner stores including Sobeys, IGA, FreshCo, Safeway, among others beginning in Atlantic Canada in August. The company anticipates the roll-out will be complete by early 2023.
Canada risks housing-related recession if interest rate hikes get too aggressive
June 07, 2022
Canada could be at risk of a recession induced by a rapidly correcting housing market if the Bank of Canada gets too aggressive with its rate hikes, according to a report from an economist at Capital Economics.
In a Tuesday update, senior Canada economist Stephen Brown noted the central bank seemed unfazed by a double-digit drop in home sales in May — the second consecutive such monthly drop — and that it was adopting an increasingly hawkish tone on inflation.
Transition to open banking will be bumpy but its worth it, veteran of U.K. sector says
June 07, 2022
If Canadians expect the financial world to change overnight with the dawn of open banking, they are going to be disappointed.
That was one of the lessons Kristo Käärmann, founder and chief executive officer of London-based payments company Wise, learned during the U.K. adoption of the protocol, which aims to enable third-party financial service providers to compete more directly with big banks.
Montreal home prices, sales slip in market ‘turning point’ in May
June 03, 2022
Montreal home sales and prices slipped in May, in what local real estate brokers call a “turning point,” as rapidly rising interest rates and an increase in new active listings shifted market conditions.
The median price of a single-family home in Montreal edged down less than one per cent month over month to $576,000 in May, according to data from the Quebec Professional Association of Real Estate Brokers. It’s the first time prices have fallen for two consecutive months since June 2021. However, the average home price is still up 16 per cent from May of last year.
Toronto home prices drop for third straight month as interest rates rise
June 03, 2022
Toronto’s housing market continued to buckle in May under the weight of rising interest rates as home prices and sales slid further in Canada’s most populous city.
The average price of a home sold in Toronto during May clocked in at $1.21 million, according to data from the Toronto Regional Real Estate Board (TREBB). The price is up a little more than nine per cent from a year earlier, but it slid about three per cent from $1.25 million in April. It’s the third straight month of price decreases.
Calgary, Vancouver housing markets extend losses as rate hikes put pressure on real estate
June 02, 2022
Real estate markets in both Calgary and Vancouver are showing signs of continued slowing as the Bank of Canada’s rate hikes appear to be biting into mortgage demand.
After setting an all-time record high of home sales in March, Calgary’s market is beginning to turn as home sales slipped for the second month in a row, falling nearly 10 per cent month-over-month to 3,071 in May, according to data from the Calgary Real Estate Board. However, the board added that this still represented a gain of six per cent since the same time last year and a record high for April.
CMHC rewrites rules of homebuyer shared-equity program to limit potential losses and gains
June 02, 2022
Canada Mortgage and Housing Corp. adjusted its First-Time Home Buyer Incentive program on Wednesday, placing caps of eight per cent per year on both the upside and downside returns it would received on its share in homes participating in the program.
“Now, homeowners will pay back up to a maximum gain of 8 per cent per annum (not compounded) on the Incentive amount from the date of advance to the time of repayment,” the program’s information page said. “The Government of Canada will also limit its share in the depreciation of a home at the time of repayment … to a maximum loss of 8 per cent per annum (not compounded).”
Cloudier economic outlook isn’t denting the confidence of Canada’s big banks
May 27, 2022
Executives at Canada’s Big Five banks are acknowledging the economic outlook is becoming cloudier, but took steps during earnings calls this week to assuage any concerns about the financial sector’s ability to navigate those looming headwinds.
“There’s no doubt we’re all in a very fluid environment,” Victor Dodig, president and chief executive officer of Canadian Imperial Bank of Commerce, told a Thursday morning conference call after CIBC reported second-quarter results that missed expectations, in part due to the impact of the bank’s acquisition of a Costco credit-card portfolio.
National Bank hikes dividend after profit climbs 11%
May 27, 2022
National Bank of Canada is hiking its dividend after all of its business units drove profit higher, bringing the company’s reported net income to $893 million in the second-quarter.
The bank’s profit jumped 11 per cent from the same period last year in the three months ending April 30. The quarter’s earnings reached $2.55 per share, up 13 per cent from $2.25 per share reported in 2021.
CIBC hikes dividend despite Costco deal costs weighing on results
May 26, 2022
The Canadian Imperial Bank of Commerce is joining the dividend hike bandwagon, despite its adjusted net income in the second quarter falling about one per cent to $1.65 billion from last year, largely because of acquisition costs from the Canada Costco credit business and higher legal provisions.
CIBC reported adjusted earnings of $1.77 per share for the three months ending April 30, down from the $1.79 reported a year earlier. Bloomberg analysts had been expecting a profit of approximately $1.79 a share. Despite this, the company declared a dividend boost from $0.805 to $0.830 per share for the quarter ending July 31, payable on July 28.
RBC boosts dividend as earnings beat analyst expectations
May 26, 2022
The Royal Bank of Canada is the fourth bank to boost its dividend this week as the company’s net income reached $4.3 billion in its second quarter on strong growth in the personal and commercial banking segments, as well as the wealth management and insurance divisions.
RBC’s net income rose six per cent year-over-year, seeing adjusted diluted cash earnings of $2.99 per share in the three months ending April. Bloomberg analysts had been expecting a profit of $2.69 a share. The company added it would be raising its dividend seven per cent to $1.28 per share.
TD earnings beat estimates despite higher expenses
May 26, 2022
Toronto Dominion Bank had a mixed second quarter, seeing its adjusted net income slip two per cent to $3.7 billion from this time last year as rising costs partially offset stronger revenues.
On an adjusted basis, TD’s earnings came out to $2.02 per share in the three months ending April 30, compared with $2.04 reported in the second quarter last year. Bloomberg analysts had been expecting a profit of $1.93 a share.
Canadian crypto industry brushing off concerns about sector in wake of US$40B collapse of Luna token
May 25, 2022
Some of Canada’s largest cryptocurrency exchanges are brushing off concerns about the sector after a recent bout of volatility exacerbated by the dramatic collapse of the TerraUSD stablecoin and its related Luna token.
TerraUSD (also denoted as UST) is a stablecoin native to the Terra blockchain network that used an algorithm to peg its value to the U.S. dollar through Luna. But after Luna’s market cap rose to as much as US$40 billion, the peg began to break down this month, precipitating a run on the tokens, which lost 99.9 per cent of their value within a matter of days earlier in May. The trouble spilled over into the wider crypto market as well, with the values of Bitcoin and Ethereum both tumbling more than 17 per cent between May 7 and May 11.
Bank of Montreal raises dividend as profit climbs
May 25, 2022
The Bank of Montreal is hiking its dividend by more than four per cent after posting higher second-quarter earnings fuelled in part by North American loan growth.
The bank reported adjusted earnings of $3.23 a share in the three months ending April 30, up from $3.13 a share last year. Bloomberg analysts had been expecting a profit of $3.22 a share. The dividend hike of six cents brought the quarterly payout to $1.39.
Scotiabank hikes dividend as profit beats expectations
May 25, 2022
The Bank of Nova Scotia is raising its dividend after net income surged to $2.76 billion in the second quarter, driven in part by loan growth in its Canadian and international segments.
The net income figure amounted to a 12 per cent gain over the $2.47 billion reported in the same quarter last year and on an adjusted basis worked out to $2.18 per share for the three months ending April 30 was up from $1.90 last year. Bloomberg analysts had been expecting a profit of $1.97 a share.
Solid second quarter expected for big banks, but will it be the calm before the economic storm?
May 24, 2022
Canada’s biggest banks are expected to post strong results when they report second-quarter earnings this week, but for those watching the industry, the numbers aren’t nearly as important as what the banks see coming next.
That’s because a cooling housing market and rising interest rates needed to combat inflation are stoking concerns that the economic recovery is beginning to stall, even raising the prospect of a recession in some quarters.
CIBC cuts price targets for Canada’s big banks as macroeconomic picture becomes less certain
May 19, 2022
Rising interest rates are generally expected to work in the favour of Canada’s big banks, but one team of analysts is taking a cautious stance toward their share prices given the wider economic backdrop.
Analysts at Canadian Imperial Bank of Commerce this week came out with across-the-board target price cuts for the big Canadian banks, arguing that the macroeconomic picture was becoming less certain, and could drag on results in 2023.
Canada’s average home price slides to $746,000, sales plummet amid rising rates
May 16, 2022
Home prices across Canada continue to slip under the weight of rising interest rates, with the nationwide average price of homes falling to $746,000 in April, down 6.3 per cent from March’s average of $796,000, according to data from the Canadian Real Estate Association.
While prices slipped from March to April, the association noted that the average price still remained up over seven per cent since the same month last year. The organization’s home price index remained somewhat flat with a benchmark price decline of 0.6 per cent month-over-month, which was the first monthly decline since April 2020, CREA noted. However, the price was still up 23.8 per cent year-over-year.
Home building picks up in April except in Toronto
May 16, 2022
The pace of new home construction started to reverse course in April, bucking a downtrend that has been in place for most of the year, according to data from the Canada Mortgage and Housing Corporation.
Standalone housing starts grew eight per cent month-over-month to 267,330 units, the CMHC said, with the six-month, seasonally adjusted moving average also growing to 257,846 units, up from 253,226 units in March.
Klarna CEO on the Canadian expansion, open banking and taking on the financial services oligopoly
May 13, 2022
Swedish fintech leader Klarna Bank is planning to establish a product development and tech hub in Toronto as it looks to grow its ‘buy now, pay later’ model in the increasingly competitive North American market.
Klarna, which found fast success in Europe, grew from a business-school concept in 2005 to a multinational corporation challenging some of the continent’s established financial services giants, before expanding into the U.S. market in 2015.
Rising rates put B.C. housing ‘on a path to normalizing’ as prices and sales slide in April
May 12, 2022
Rising interest rates are putting British Columbia’s housing market on ice as prices and sales cooled from their pandemic highs in April.
The average price of a residential home in the province slid nearly three per cent month-over-month to $1.065 million last month, according to data from the British Columbia Real Estate Association. While the prices mark a sequential decline, the association noted that prices are still roughly 13 per cent ahead of last April’s reading of $943,765.
Reverse mortgages take off in Canada as more seniors look to ‘age in place’
May 12, 2022
More Canadian seniors have been tapping into their home equity for cash to fund their retirements over the course of the pandemic, giving an earnings boost to the lenders that offer reverse mortgages and other similar loans.
One of those, Equitable Bank Inc., reported a 262 per cent year-over-year surge in its reverse mortgage product in first-quarter 2022 earnings announced this week. Altogether, Equitable originated $304-million worth of the loans, up 23 per cent over the final quarter of 2021.
Equitable posts best earnings ever as mortgage business stays strong
May 11, 2022
Equitable Group Inc. will hike its quarterly dividend after recording its best quarter ever on the back of strong loan-origination growth, showing that the mortgage market slowdown has yet to bite into the challenger bank’s bottom line.
EQ Bank saw a 27 per cent boost in earnings to $87.9 million in the three months ending March 31, or diluted earnings of $2.51 per share. This came as the company’s conventional loans segment rose 35 per cent year over year to $22.5 billion.
Canadians are clinging to cash as a savings strategy during the pandemic: RBC
May 10, 2022
The pandemic has not spelled the death of cash as many suspected it would. In fact, demand for hard currencies as a savings vehicle has gone in the opposite direction as demand reached its highest level in 60 years.
Cash withdrawals surged at the onset of the pandemic as circulating notes increased twice as much as expected in 2020 and remained elevated in the following year, according to an April 14 Bank of Canada report.
TSX tanks more than 600 points as commodities join stock retreat
The S&P/TSX composite index plunged to a three-month low, as Canada’s main stock market got caught in the undertow of a global retreat from equities amid stubbornly high inflation.
Greg Newman, a portfolio manager and senior wealth adviser at Scotia Wealth, said investors are currently trying to figure out two things: the appropriate trading multiple for stocks, given interest rates are rising faster than expected; and whether the Bank of Canada could overshoot a neutral setting for borrowing costs, potentially causing a recession.
‘That’s bull****’: David Dodge fires back at Poilievre’s criticism of the Bank of Canada
May 09, 2022
Bank of Canada governor Tiff Macklem declined to comment on Pierre Poilievre’s gibe last month that the central bank was “financially illiterate.” David Dodge, one of Macklem’s predecessors, felt no such compulsion to take the high road in an interview over the weekend, firing back at the Conservative leadership candidate with an expletive on Sunday morning television.
“That’s bullshit,” Dodge said in a pre-recorded interview that aired during CTV’s Question Period on May 8. “I’m very insulted by that,” he continued. The Bank of Canada “understands what’s going on, they made a judgment call, which I think was 100 per cent right.”
What the death of the penny teaches us about the future of money
May 06, 2022
Take one, leave one: the penny had been a regular part of Canadian cash for well over a century, sitting at the bottom of wallets, gracing tip jars, and being fished out of pockets to support local charities.
That was until the federal government decided to take the penny out of circulation in the 2012 federal budget, following a finance committee study that deemed the coin too expensive to produce and no longer necessary. The late finance minister Jim Flaherty pressed the last penny on May 4 of that year, marking the end of an era.
Bank of Canada’s Carolyn Rogers says supply is the key to solving housing problem
May 05, 2022
The Bank of Canada’s Carolyn Rogers, who has spent much of her career as a regulator and policymaker trying to keep the country’s housing boom from becoming a bust, said the only thing that will moderate prices is more houses.
“We have to fix the supply problem,” Rogers said this week in an interview, her first since replacing Carolyn Wilkins as governor Tiff Macklem’s No. 2 in December. “We keep trying these different things to dampen demand and Canadians still want houses. We have immigration coming in, (and) we have a strong economy.”
Home Capital earnings take hit, CEO points to mortgage demand headwinds
May 04, 2022
Home Capital Group Inc.’s bottom line took a hit in the first quarter due to rising deposit costs, but it is the prospect of a slowdown in sizzling mortgage growth that was a bigger cause for concern following Wednesday’s earnings announcement.
Home Capital’s net income slumped nearly 18 per cent year-over-year to $44.7 million, or $1.02 per share, for the three months ending March 31, the lender said.
Toronto home sales plunge and prices slide as rising borrowing rates bite
May 04, 2022
Toronto home prices slid three per cent on a month-over-month basis and sales slowed significantly in April as rising interest rates started to weigh more heavily on the housing market.
While the average home price of $1.254 million was still up 15 per cent from last year, sales were off 41 per cent from last April and down 27 per cent from the month prior, the Toronto Regional Real Estate Board said Wednesday.
Bank of Canada’s Carolyn Rogers seeks to shore up central bank’s credibility amid political attacks
May 03, 2022
Senior deputy governor Carolyn Rogers re-affirmed the Bank of Canada’s independence from the federal government in her first speech since taking the second-in-command post at the country’s central bank.
In a speech before the Women in Capital Markets in Toronto on May 3, Rogers also emphasized trust and credibility in the central bank as being vitally important during the pandemic and vowed to keep this trust moving forward.
Calgary home prices jump again in April, despite slowing sales
May 02, 2022
Calgary home prices managed to inch higher in April despite a market slow down as homebuyers continue to turn their attention to Alberta’s most populous city.
The benchmark price in the city reached $526,700 in April, jumping 17 per cent from the same time last year, according to data from the Calgary Real Estate Board. That figure was also up two per cent on a month-over-month basis, showing that the prospect of higher interest rates had yet to bite into demand.
Tiff Macklem acknowledges misjudging inflation, pledges to act ‘forcefully’ to bring it down
April 28, 2022
Bank of Canada Governor Tiff Macklem acknowledged he and his lieutenants misjudged the strength of inflation at the start of the year, and pledged to act “as forcefully as needed” to make up for the mistake.
“(We’re coming) out of the deepest recession we’ve ever had,” Macklem said during testimony at the Senate banking committee late on April 27. “We got a lot of things right. We got some things wrong, and we are adjusting.”
Crypto has potential but it won’t usurp the loonie: Bank of Canada governor
April 28, 2022
Bank of Canada Governor Tiff Macklem said crypto currencies have potential, but not so much that they will displace the Canadian dollar.
“In the future, the Canadian dollar will remain at the centre of our current financial system,” Macklem said during evening testimony at the Senate banking committee on April 27. “We have our Canadian currency, and we have a certain exchange rate. So, we need a monetary policy in Canada for Canadians which reflects the needs of Canadians.”
‘Conditions have not been this tight since 2006’: Behind the big rebound in Calgary real estate
April 27, 2022
A recovering energy industry, rebounding downtown commercial market and a competitive tax environment — all at a more affordable price point — have been working in tandem to drive a resurgence in Calgary real estate, according to industry watchers.
Alberta’s largest city kicked off 2022 on a strong note, setting a record for first quarter home sales.
Bank of Canada’s Lane sees major role for private sector in making central bank digital currencies flourish
April 26, 2022
A digital currency sanctioned by the Bank of Canada would likely come in a basic format and rely on private sector innovation to add capabilities, the central bank official overseeing research into a potential digital loonie told a U.K. cryptocurrency conference on Tuesday.
Bank of Canada Deputy Governor Timothy Lane shared his thinking on central bank digital currencies (CBDCs) during a panel discussion at the FT Live Crypto and Digital Asset Summit held by the Financial Times. CBDCs are digital currencies issued by a central bank rather than commercial company and have been the subject of study around the world.
Globalive’s Lacavera calls for more transparency on Freedom Mobile bidding process
April 26, 2022
The head of Globalive Capital Inc. says he is pressing Ottawa to bring more transparency to Rogers Communications Inc.’s sale of the Freedom Mobile wireless brand, part of Rogers’ effort to gain regulatory approval for the acquisition of Shaw Communications Inc.
Anthony Lacavera, founder and chairman of Globalive — which is reportedly among the bidders for Freedom — told the Financial Post Monday that he thinks Francois-Philippe Champagne, the minister of innovation, science and industry, should be concerned that viable competitors are being kept at bay.
Urban exodus slowing down as Canadian homebuyers return to the office: BMO
April 25, 2022
As Canadians are being beckoned back to their downtown offices in the post-pandemic recovery, a new survey has found that homebuyers are also turning their attention back to major urban cities.
The Bank of Montreal found in its latest home finance survey that the so-called “urban exodus” that took hold in the early days of the pandemic is slowing down, with interest in purchasing homes in major city hubs up by five per cent since last year, despite soaring prices.
Royal LePage boosts home price forecast to 15% growth despite rate hikes, cooling demand
April 19, 2022
Royal LePage is boosting its home price forecast for this year, despite signs of cooling in some markets and expectations of higher mortgage rates.
The real estate brokerage now expects aggregate home prices to rise 15 per cent in 2022 to $895,900, up from its December forecast.
The fresh forecast comes after aggregate home prices rose 25 per cent to $856,900 in the first quarter of this year despite rate hikes by the Bank of Canada, a promising sign that prices will remain strong. The price gain was the largest in the first quarter ever recorded by the company.
Canada’s hot housing streak cools as prices, sales fall in March
April 19, 2022
Canada’s real estate markets saw a significant slowdown in March, as a decline in sales pulled the national average price of a home down to $796,000.
While the average price was still up more than 11 per cent year-over-year, it declined two per cent from the February reading of $816,720, according to data from the Canadian Real Estate Association.
March housing starts decline slightly amid growing focus on supply crunch
April 19, 2022
The pace of housing construction dipped in March, with standalone housing starts coming in at 246,243 units, a two per cent decrease from February, according to data released Tuesday by the Canada Mortgage and Housing Corporation.
This follows an overall downtrend in housing starts that saw the six-month, seasonally adjusted moving average reach 252,497 units compared to the February reading of 253,296 units.
Kevin O’Leary-backed WonderFi to acquire Coinberry for $38.5 million in next phase of consolidation strategy
April 18, 2022
Vancouver-based decentralized finance platform WonderFi Technologies Inc. is set to acquire Toronto crypto trading platform Coinberry in a $38.5 million all-share transaction. This comes as the company seeks to position itself as a market consolidator targeting Canadian licensed crypto platforms.
WonderFi said the deal would put about one-third of Canadian registered crypto trading platforms under its wing with more planned acquisitions to come. It would also make the company the largest publicly traded end-to-end crypto platform.
What ‘higher and faster’ Bank of Canada rate hikes could mean for homeowners
April 14, 2022
The Bank of Canada’s move to hike its policy rate by 50 basis points Wednesday will be quickly noticed by variable-rate mortgage holders and Canadians holding a home equity line of credit, but if inflation persists and rates have to rise more quickly — something the central bank’s chief acknowledged was a possibility — the effects are not likely to stop there.
“Higher and faster rate hikes will affect mortgage affordability for a significant population of homebuyers,” RatesDotCA mortgage agent Sung Lee told the Financial Post in an e-mail. “Major banks have already pushed fixed rates higher several times over the past few weeks with some approaching the four per cent mark for uninsured products.”
‘Real impact on homeowners’ wallets:’ What they are saying about the rate hike
April 13, 2022
The Bank of Canada pushed ahead with its first 50-basis point interest rate hike in 22 years on Wednesday, a move that came as no surprise to economists and bank watchers who had widely anticipated the increase. What comes next, however, is less certain.
Economist Royce Mendes from Desjardins Group saw the aggressive move — which included announcing that the central bank would begin quantitative tightening, or reducing the amount of government bonds held on its balance sheet, effective April 25 — as an acknowledgement of the need to move “forcefully” to combat rising prices and return rates to more neutral levels.
Will Ottawa’s plan to hike housing supply move the needle on home prices?
April 12, 2022
Real estate market watchers have increasingly been calling on governments to focus on building new housing to rein in runaway home prices, but were mixed as to whether supply-oriented measures introduced in the budget will have a major impact.
Among other housing-related measures, the Liberals said last week that they plan to set aside $4 billion over five years for a Housing Accelerator Fund in partnership with the Canada Mortgage and Housing Corp. to develop 100,000 net new housing units. The government also plans to spend $1.5 billion over two years to create 6,000 affordable units — 25 per cent of which will be for women-focused housing — and make another $1.5 billion in loans and funding available to develop 6,000 co-op housing units.
Trudeau takes aim at foreign homebuyers in budget, promises support for young Canadians in federal budget 2022
April 07, 2022
Prime Minister Justin Trudeau’s government added arrows worth $10 billion to its quiver of housing measures, pledging to tackle the affordability crisis by taking aim at foreign homebuyers, providing more tools for young Canadians who have been priced out of the real-estate market and pledging to spend billions of dollars to encourage builders to increase supply.
“Buying a house is out of reach for far too many Canadians,” Chrystia Freeland, the finance minister, wrote in the forward of the budget, which she tabled in the House on April 7.
Shoppers Drug Mart tops list of most reputable companies in Canada, Leger survey finds
April 07, 2022
The bonds that tie Canadians to major consumer-facing companies have been eroding over the past decade amid a wider decline in trust for institutions and communication fatigue, according to a report from a major market research firm.
Leger on Thursday unveiled the results of its 2022 Reputation study, which ranks the companies Canadians find most reputable, based on a survey of the opinions and awareness of more than 38,000 people toward 285 companies.
MP Rempel Garner pushes for national crypto regulation framework in bill
April 05, 2022
Conservative member of Parliament Michelle Rempel Garner touted her private member’s bill on cryptocurrencies Tuesday, calling for a national framework she hopes will encourage the growth in the crypto-asset sector.
Bill C-249, which saw its first reading in early February, would call on the Minister of Finance to consult with crypto industry innovators designated by provinces and territories to develop the framework. The bill also states that policy must focus on lowering barriers to entry in the crypto sector and protect industry innovators from crushing administrative burdens.
Toronto home sales cool in March as average price dips to just under $1.3 million
April 05, 2022
Toronto home sales in March could not keep pace with last year’s record, seeing a 30 per cent drop to 10,955 units sold last month.
Despite the dip in sales, the Toronto Regional Real Estate Board called the recent data reading the third-best March and second-best quarter on record.
The average selling price of a home slipped over 2 per cent from the month before to just under $1.3 million, bucking a seasonal trend. However, prices are still up 18 per cent from the same time last year, underscoring a worsening affordability issue amid a tight market.
Vancouver home prices soar more than 20% though sales off record highs
April 04, 2022
Vancouver home sales declined in March from last year’s record-breaking levels, but prices continued to rise, jumping more than 20 per cent amid a dearth of listings.
Residential home sales were down nearly 24 per cent year-over-year at 4,344 units last month, according to data from the Real Estate Board of Greater Vancouver. While the sales tally was below record levels, the board noted it is still historically high and was up nearly 27 per cent from the 3,424 homes sold in February. The board added that there was elevated home buyer demand in the Metro Vancouver area.
Provinces launch ‘full-scale attack’ on home prices — but it likely won’t be enough to slay housing dragon
April 04, 2022
Provinces from B.C. to Nova Scotia are rolling out a wave of new measures aimed at reining in rampant home price appreciation, but many in the real estate industry question whether the moves alone will be enough to tame the country’s housing dragon.
A Bank of Montreal report last week, authored by economist Robert Kavcic, characterized the latest policy changes and the Bank of Canada’s anticipated interest rate moves as a “full-scale attack on Canada home prices.”
RBC to acquire U.K.’s Brewin Dolphin for $2.6 billion, expand wealth management business
March 31, 2022
The Royal Bank of Canada is acquiring U.K.-based Brewin Dolphin Holdings Plc. in a $2.6 billion all-cash deal that will expand its wealth management business as well as its footprint across the pond, the bank announced Thursday.
“(RBC) had a very limited footprint in the U.K. prior to this transaction, so this pulls them up to the No. 3 market position in the U.K. and Ireland,” Canaccord Genuity analyst Scott Chan told the Financial Post. “Because it was very limited, RBC management has talked about using excess capital to support growth in wealth management in Europe, and in the U.S., and to a certain extent in Canada.”
Meta to open new engineering hub in Toronto, expects to create 2,500 jobs
March 29, 2022
Meta Platforms Inc. plans to create up to 2,500 high-tech jobs in Toronto as it builds out a new engineering hub focused on creating immersive online experiences, part of the company’s deepening bet on the metaverse.
While the hub will be located in Toronto, the company said the jobs will offer in-office and remote work options, allowing Canadians from other regions across the country to apply. Meta said it has already begun recruiting efforts and that the jobs would be added over the next several years.
Loonie’s push past 80 cents may have legs, analysts say, but commodity prices aren’t the driving factor
March 29, 2022
The Canadian dollar topped 80 cents against the greenback over the weekend for the first time since January, with analysts predicting that an improving economic backdrop and hawkish central bank mean there is more strength ahead, despite a pullback on Monday.
Karl Schamotta, chief market strategist at Corpay in Toronto, told the Financial Post that a number of factors have been driving the loonie higher in recent weeks, including the ebbing of a safe haven play that saw a rush to the U.S. dollar after Russia invaded Ukraine.
Canadian crypto industry leaders launch Web3 Council to push for national strategy
March 29, 2022
The heads of some of Canada’s biggest cryptocurrency companies are coming together to create a new industry group to push for a national strategy on crypto and digital assets.
The Canadian Web3 Council, which is being formally launched on Tuesday, includes representative from a range of organizations that have been active in the Web3 technologies space, including Wealthsimple, Dapper Labs, Ledn, Ether Capital, WonderFi Technologies Inc., Aquanow, Aciom Zen, Chainsafe Systems, ETHGlobal, Figment and Informal Systems (Cosmos).
Kyle Lowry talks crypto, that Super Bowl ad and his looming return to face the Raptors
March 25, 2022
Kyle Lowry won the hearts of Canadian basketball fans when he helped lead the Toronto Raptors to their first NBA title in 2019. Now the star guard not only has a new team, the Miami Heat, but a new job as well. Last year, the Toronto-based marketplace Bitbuy signed Lowry on as a crypto brand ambassador, featuring him in his very own Super Bowl ad campaign. Leading up to his April return to Toronto to face the Raptors, Lowry spoke with the Financial Post’s Stephanie Hughes about crypto, the partnership with Bitbuy — which was acquired by the Kevin O’Leary-backed DeFi platform WonderFi in a $206 million deal expected to close this week — and his Toronto homecoming. This interview has been edited and condensed.
Canadian firm Draganfly’s drones tapped for Ukraine search-and-rescue, medical missions
March 24, 2022
A Canadian drone manufacturer’s aircraft will soon be searching for wounded civilians and ferrying medical supplies in hard-hit areas of Ukraine after receiving an order from a humanitarian group.
Saskatoon-based Draganfly Inc. announced this week that it would be deploying its medical response and search-and-rescue drone models to Revived Soldiers Ukraine (RSU), a non-profit humanitarian organization providing aid to Ukrainians following the Russian invasion.
Liberal’s deal with NDP puts bank tax back on the table
March 22, 2022
A banking surtax appears to be back on the table as part of an agreement that will see the New Democratic Party support Prime Minister Justin Trudeau’s minority Liberal government for the foreseeable future.
“We will deliver a fairer tax system for the middle class by addressing the profits made by financial institutions during the pandemic,” said Trudeau during a Tuesday morning press conference, reiterating an election promise made back in August last year.
What first-time homebuyers need to know about using RRSPs to fund a down payment
March 22, 2022
The biggest obstacle to home ownership for many is the down payment, especially these days, with home prices in Canada’s hottest markets running rampant.
One way many first-time buyers get over that barrier is with a boost from their registered retirement savings plans (RRSPs) through the Home Buyers Plan. Before depleting this tax-sheltered savings account, there are a few things to consider.
The rate hikes cometh: How to get your mortgage ahead of a rising rate environment
March 22, 2022
The era of ultra-low borrowing costs is over.
When the Bank of Canada raised its benchmark interest a quarter point to 0.5 per cent in early March, it made clear that more increases were on the way.
“The economy is now in a place where moving to a more normal setting for interest rates is appropriate,” Tiff Macklem, the central bank’s governor, said in a speech.
Rent or buy? Here’s how to decide what’s best for you
March 22, 2022
Buy or rent? Simple question, difficult answer.
Renters boast about the flexibility that comes from being unanchored by a mortgage, nor is it their problem when something breaks around the house.
Owners argue that renting is akin to throwing away “dead money.” Why do that, when mortgage payments will eventually make you the owner of a living asset?
Mortgage industry urges Ottawa to tackle housing affordability, takes aim at homebuyer incentive
March 21, 2022
Mortgage Professionals Canada took to Ottawa on Monday morning, taking aim at federal policies it says have failed to address Canada’s housing affordability problem and urging policy-makers to consider the group’s recommendations.
The organization, which represents mortgage professionals across Canada, is calling on politicians to implement the Liberal party’s campaign pledge of increasing the insured mortgage cut-off from $1 million to $1.25 million, and tying the metric with inflation to keep up with today’s home prices. It also wants first-time homebuyers to have access to mortgage terms of up to 30 years for insured mortgages.
More than a ‘flash in the pan’? The TSX is on a roll for now
March 18, 2022
The S&P/TSX composite index is finally getting its time in the sun after more than a decade of underperformance, rallying to all-time highs this week, surpassing 21,800 during Friday trading.
The index had been climbing on soaring commodities, including oil, as well as on the backs of the financial and agricultural sectors, where stocks for heavyweights such as the Royal Bank of Canada, Enbridge Inc. and Canadian National Railway Co. have been on the rise.
Binance confirms it will stop opening new accounts in Ontario
March 17, 2022
The clash between cryptocurrency exchange Binance and Ontario’s financial watchdog is over, as the crypto trading platform has legally committed to ceasing Ontario operations.
The Ontario Securities Commission (OSC) published an undertaking from Binance Holdings Limited and Binance Canada Capital Markets Inc. on March 17. Binance promised it would not open new Ontario accounts, stop trading in existing accounts in the province, and provide fee waivers and reimbursements to some Ontario users.
Hut 8 Mining sees record-breaking revenue in 2021 on bitcoin price rally
March 17, 2022
Crypto miner Hut 8 Mining Corp. reported record annual revenue in 2021 thanks to last year’s bitcoin rally, and said it will use some of the money to diversify by investing in data centres.
The Toronto-based company said on March 17 that it generated revenue of $173.8 million over the 12 months ending Dec. 31, 2021, a 327-per-cent increase from a year earlier. For the quarter, Hut 8 saw revenue rise to $57.9 million from $12.9 million in the fourth quarter of 2020.
Canadian home prices up 20.6% but market could be nearing turning point
March 15, 2022
Canada’s average home price rose more than 20 per cent from the year before in February to $816,720, according to data from the Canadian Real Estate Association.
Sales jumped 4.6 per cent from the lull in January, thanks to a 23.7 per cent increase in new listings. Though strong, the sales fell 8.2 per cent short of the record set in February 2021.
Canadian housing starts rise 8%, beating expectations
March 15, 2022
Canada’s housing supply shortage received some relief in February as the country’s housing starts rose in February.
Standalone housing starts in February came out to 247,256 units, up eight per cent from 229,185 units in January and beating analyst expectations, according to data from the Canada Mortgage and Housing Corporation.
Crypto goes to Ottawa: Digital assets in spotlight following Emergencies Act
March 15, 2022
Canadian cryptocurrency executives said they froze only a small number of accounts as a result of the Emergencies Act and that the crypto industry’s transparency should encourage the government to engage more deeply with the sector during testimony before the House finance committee on Monday.
The hearing was part of a post-mortem on the Act and other measures aimed at tamping down the trucker convoy protests across the country. During this time, the Royal Canadian Mounted Police provided a list of crypto wallets thought to be connected to the protests ordering exchanges not to facilitate transactions for these accounts.
TD, BMO downgraded on earnings headwinds, uncertain acquisition timelines
March 07, 2022
The merger honeymoon is over for at least one bank analyst who downgraded Toronto-Dominion Bank and the Bank of Montreal to a sector perform on Sunday, largely citing new headwinds facing the Canadian lenders but also flagging potential delays and regulatory uncertainty surrounding the two banks’ recent major acquisitions.
A team of analysts at National Bank of Canada led by Gabriel Dechaine downgraded TD to “sector perform” and reduced its price target from $110 to $100 on the grounds that they don’t expect the Canadian lender to close its US$13.4 billion First Horizon Corp. acquisition until the second quarter of 2023, a few months later than TD’s planned first-quarter close. National also cited reduced overdraft fees following a widespread backlash in the United States, which led TD to eliminate those charges if they are US$50 or less. The analysts believe the move will lead to a negative revenue hit of US$250 million on an annualized basis in the second half of 2023.
Grocery bills heading higher as Ukraine conflict continues
March 06, 2022
As the economic fallout continues from Russia’s war on Ukraine, Canadians are facing higher grocery bills as the cost of grain spikes further upwards.
The conflict between Russia and Ukraine has disrupted grain exports from the Black Sea region, putting stark upward pressures on wheat, corn, sunflower seeds, and legumes like pulses. The disruption pulled the price of wheat up about 30 per cent to US$12.09 per bushel on Friday, according to data from Macrotrends. Corn prices grew by nearly nine per cent to US$7.54 per bushel on Friday.
‘Musical chairs’ housing market to drive strong mortgage demand through spring: experts
March 04, 2022
The cost of borrowing started to rise this week after the Bank of Canada’s 25 basis-point rate hike, with major lenders following with their own prime rate hikes, but mortgage experts say it has not yet prompted a demand retreat in the mortgage market.
While the expectation of a steepening path of rate hikes could start to weigh on housing market demand psychology, Dan Eisner, founder and chief executive officer of Calgary-based mortgage firm True North Mortgage, said he has not seen that pan out so far as 75 per cent of his mortgage-seeking clients are still opting for variable-rate products.
‘No direct link’ between quantitative easing and mortgages, Macklem tells finance committee
March 04, 2022
As the Bank of Canada is discussing the prospects of quantitative tightening this week, Members of Parliament were interested in the role quantitative easing played in the housing price run-up over the course of the pandemic during Thursday’s Standing Committee on Finance focusing on inflation.
NDP MP Daniel Blaikie of the Elmwood-Transcona riding in Manitoba asked governor Tiff Macklem to clarify the impact that quantitative easing — the practice of taking more assets onto the bank’s balance sheet to lower interest rates — has had on the housing market over the past two years.
Toronto home prices soar 28% in second hottest February on record for sales
March 03, 2022
Home sales in Toronto saw the second-highest February on record, according to data from the Toronto Regional Real Estate Board.
Realtors from the Greater Toronto Area recorded 9,097 home sales in February, a 16.8 per cent decrease from February 2021. The average selling price for all property types combined rose 27.7 per cent to $1.33 million.
TD profit beats expectations with help from strong U.S. recovery
March 03, 2022
Toronto Dominion Bank saw adjusted net income grow 13 per cent to $3.83 billion in the first quarter of fiscal 2022 fuelled in part by its U.S. operations, which are set to expand following a major acquisition.
Adjusted earnings came in at $2.08 per share, up from $1.83 in the same period last year and ahead of analyst expectations of $2.04 a share, according to IBES data from Refinitiv.
Bank of Nova Scotia beats expectations on mortgage and commercial loan growth
March 01, 2022
The Bank of Nova Scotia beat expectations with adjusted net income of $2.75 billion in its first quarter, up from $2.4 billion last year, as all four business lines saw revenue growth.
Adjusted earnings came in at $2.15 a share, compared to $1.88 last year. Analysts had expected a profit of $2.05 a share, according to IBES data from Refinitiv.
Bank of Montreal beats profit expectations on capital markets boost
March 01, 2022
The Bank of Montreal reported a $2.6 billion adjusted profit in its fiscal first quarter of 2022, a jump of 27 per cent from the same time last year on strength in its capital markets division.
Adjusted earnings came out to $3.89 per share in the three months ending Jan. 31, beating analyst expectations of $3.28 per share, according to IBES data from Refinitiv.
TD Bank expands U.S. footprint with $13-billion deal for First Horizon
February 28, 2022
Toronto-Dominion Bank is expanding its U.S. footprint by agreeing to acquire Memphis, Tennessee-based regional bank First Horizon Corp. in an all-cash deal worth US$13.4 billion or US$25 per share.
Through the acquisition, which is expected to close in TD’s first fiscal quarter of 2023, the bank said it expects to see US$610 million in pre-tax cost synergies and that it will incur merger costs totalling US$1.3 billion, largely within the first two years after the deal closes.
National Bank sees 22% surge in first-quarter profit
February 25, 2022
The National Bank of Canada saw a 22 per cent surge in profit in its fiscal first quarter, fuelled by gains in all of its business segments as well as from the reversal of provisions for credit losses.
National Bank’s net income rose to $932 million for the three months ending Jan. 31 from $761 million in the same period last year. Diluted earnings were $2.65 per share. Analysts had expected $2.23 per share, according to IBES data from Refinitiv.
CIBC beats expectations with 15% profit growth
February 25, 2022
The Canadian Imperial Bank of Commerce posted a 15 per cent increase in profit in its fiscal first quarter as revenues climbed in its core banking and wealth management businesses.
The bank’s net income came out to $1.87 billion with adjusted diluted earnings of $4.08 per share for the three months ending Jan. 31. Analysts had expected $3.67 a share, according to IBES data from Refinitiv.
Royal Bank of Canada beats expectations as profit climbs 6%
February 24, 2022
The Royal Bank of Canada saw net income rise six per cent to $4.1 billion in the first quarter, a gain that the bank attributed to strong growth in its personal and commercial banking segments as well as its wealth management business.
The personal and commercial segment saw 10 per cent year-over-year growth to earn $1.97 billion while the wealth management business posted a $765-million profit, up 24 per cent growth from the same time last year. Earnings were $2.87 per share on an adjusted basis compared to Bloomberg consensus estimates of $2.72 per share.
Analyst downgrades big banks over worries that multiple contractions will outweigh boost from rising rates
February 22, 2022
Canada’s big banks will begin announcing their first quarter earnings later this week, just as the Bank if Canada is expected to raise the overnight interest rate for the first time since the pandemic began.
Analysts tend to agree that a rising-interest-rate environment will benefit the financial giants by easing pressure on their net interest margins, which have been compressed during the pandemic. But whether shareholders see the benefit in the form of higher stock prices may be a different matter altogether.
Bitcoin wallet Nunchuk scolds Ontario court over order to freeze crypto assets
February 22, 2022
Bitcoin wallet Nunchuk.io is pushing back against an order from the Ontario Superior Court demanding the platform freeze and disclose information on digital assets sent to anti-vaccine mandate protesters.
In a letter made public on Twitter, the company stated that it was a self-custodial bitcoin wallet and software provider, not a custodial financial intermediary.
Why halting the flow of crypto to protesters may be harder than the government thinks
February 17, 2022
Ottawa’s invocation of the Emergencies Act may succeed in slowing the flow of cryptocurrency to anti-mandate protesters, but stanching it altogether is a much more difficult proposition, crypto experts told the Financial Post this week.
The act, introduced on Monday, forces financial institutions and intermediaries to freeze and report assets, including cryptocurrencies, tied to accounts suspected of funding the protesters, who have blocked border crossings and set up camp in the nation’s capital.
RCMP asks crypto exchanges to cease transactions with list of protest-related crypto wallets
February 16, 2022
Multiple Canadian cryptocurrency exchanges have confirmed to the Financial Post that they received letters from the Royal Canadian Mounted Police late last night and early this morning ordering that they not facilitate transactions for a list of more than 30 crypto wallet addresses thought to be connected to the vaccine mandate protests that started in Ottawa.
The letter called on exchanges to immediately disclose to the Commissioner of the RCMP “any information about a transaction or proposed transaction” connected to the wallet addresses.
Crypto assets pose mounting risk to financial stability, global watchdog warns
February 16, 2022
A global financial stability watchdog is raising the red flag on crypto assets, warning that they could pose a significant risk to the broader financial system if they remain outside of regulatory scrutiny.
The Financial Stability Board (FSB) said in a Wednesday report that risks like regulatory gaps, fragmentation or arbitrage could “rapidly escalate, underscoring the need for timely and pre-emptive evaluation of possible policy responses.”
Home building gains slip amid calls to boost Canada’s housing
February 15, 2022
The speed at which new homes are built in Canada slowed even further in January, despite rising calls to boost supply to address a national housing shortage.
Housing starts came in at 254,133 units in January, an approximate three per cent decline from the 261,352 units during December, according to data from the Canada Mortgage and Housing Corporation.
Canadian lifecos end 2021 on a strong note but COVID-19 concerns loom
February 10, 2022
Canada’s life insurance giants saw profits surge in 2021, buoyed in part by strength in their wealth management units, but the companies continue to face headwinds from the pandemic in certain segments.
Manulife Financial Corp.’s core earnings hit $1.7 billion or $0.84 per share for the quarter ended Dec. 31, 2021, bringing full year core earnings to a record $6.5 billion, an increase of about 20 per cent on a constant exchange rate basis over the prior year.
KPMG Canada adding bitcoin and Ethereum to its balance sheet in first move into crypto
February 08, 2022
KPMG Canada is making its first-ever move into the crypto space, bringing bitcoin and Ethereum assets into its corporate treasury.
In a release Monday, the company added that it will also be investing in carbon offsets to adhere to its net-zero carbon transaction requirement with its environmental, social and governance (ESG) commitments. The firm has yet to specify how much in bitcoin and Ethereum it will be adding to its balance sheet.
Takeover of Concentra furthers Equitable’s ‘challenger bank’ ambitions, CEO says
February 07, 2022
The chief executive of Equitable Group Inc. says a deal announced Monday to acquire Saskatoon-based Concentra Bank for $470 million help the digital only “challenger bank” accelerate its growth plans.
Andrew Moor, Equitable’s president and chief executive officer, told the Financial Post that the acquisition is in line with the company’s strategy to expand its core business.
CMHC wants market share back, but some observers wonder if timing is right
February 07, 2022
The Canada Mortgage and Housing Corporation has already acknowledged it needs to claw back business it ceded in the mortgage insurance market. Now, it’s getting more specific about its targets.
Once the dominant player in the country, the CMHC’s share of new mortgage insurance originations fell to 26 per cent in the third quarter of 2021, down from 49 per cent in the second quarter of 2020. It’s a major comedown that has eroded the Crown Corporation’s influence, leaving it in third place behind private players Sagen and Canada Guaranty.
Toronto home prices climb in January, following record-breaking sales in 2021
February 03, 2022
Toronto’s housing market had a record-breaking sales year in 2021 and hasn’t slowed down to start 2022, with the average price in the Greater Toronto Area reaching $1.24 million in January. This amounted to a nearly seven per cent jump month-over-month and a 28 per cent jump over last January, according to data released Thursday by the Toronto Regional Real Estate Board (TRREB).
TRREB’s home sales volumes reported through the organization’s multiple listing service (MLS) were slightly subdued at 5,636 units, seeing a roughly 18 per cent drop from the 6,888 sales reported this time last year. The board added that while sales were down compared to the record results from last year, January 2022 still remains as the second strongest in the history for that month.
Meta shares plunge in after-hours trading on weaker than expected guidance
February 02, 2022
Shares of Meta Platforms Inc. plunged by more than 22 per cent in after-hours trading Wednesday after the tech giant, formerly known as Facebook, posted fourth quarter results that came up shy of analyst expectations and offered disappointing guidance. Meta earned US$3.67 per share in the fourth quarter, short of Bloomberg analyst estimates of US$3.86 per share, on total revenue of approximately US$33.7 billion. The company is also forecasting US$27 billion to US$29 billion in revenue for the first three months of 2022, three to 11 per cent growth year-over-year but still less than investors had anticipated. Here’s a look at five key takeaways from the earnings, in which the company broke out the financial performance of its “Reality Labs” division for the first time.
Calgary housing market heats up as homebuyers from Ontario, B.C. help fuel it
February 02, 2022
Tight supply in Calgary’s real estate market pushed the average unadjusted benchmark price to $472,300 in January, a 12 per cent increase over the same time last year, according to data from the Calgary Real Estate Board (CREB).
Housing inventory also reached its lowest point since 2006 at 2,620 units, the organization said, while the 2,009 units sold was nearly double the long term trend.
FP Dealmakers: How a ‘rocket fuel’ tech sector drove the year of the IPO to new heights
January 31, 2022
John Wilkin has seen a number of strong initial public offering cycles during his 23-year career as an M&A lawyer. But he’s never seen one quite like 2021.
A partner at Blake, Cassels & Graydon LLP, Wilkin said the year stood out because nearly every sector took part in the action.
“When I started out in early 2000s, the IPO market was driven by the dot-com trend, and then in the mid-2000s, with the boom in commodities,” Wilkin told the Financial Post in an interview. “This recent increase in activity has been across the board…. I think the strength of the Canadian capital markets across sectors is proving itself out.”
‘Moving without moving’: Don’t expect rush into housing market after Bank of Canada’s rate hike reprieve
January 27, 2022
The Bank of Canada is waiting to raise interest rates, but don’t expect the reprieve to spark a last-minute surge in homebuying.
That’s the message a handful of market watchers gave the Financial Post, noting that while the central bank’s decision to keep overnight rate unchanged at 0.25 per cent until at least March may prompt some remaining prospective buyers to jump in off the sidelines, most of that action has already taken place. And there is no mistaking that rates are on their way up.
What a Bank of Canada rate hike could mean for mortgages and the housing market
January 26, 2022
The era of ultra-low pandemic interest rates, which has helped drive Canadian home prices to all-time highs, may be coming to end.
Many economists anticipate that the Bank of Canada will begin hiking its benchmark overnight rate as early as today, ushering in a pricier borrowing environment with potential implications for heavily indebted Canadians and the red-hot housing market.
Crypto’s US$1-trillion rout puts stock volatility in perspective
January 24, 2022
Stock market watchers were left breathless Monday as major North American indices plummeted before staging a wild recovery. For cryptocurrency owners, that kind of volatility likely sparked more than a glimmer of recognition.
While stocks, particularly those in the technology sector, have been under pressure to start 2022, their drawdown has been only a fraction of the collapse that has hit the crypto space.
Big banks poised to benefit from rising interest rates after emerging unscathed from pandemic
January 20, 2022
Canada’s largest banks escaped the pandemic with record stockpiles of excess capital and now some analysts believe they are poised to benefit anew from rising interest rates as the economy improves.
A Barclay’s report released Wednesday notes that after years of facing net interest margin compression, higher rates would bring “palpable” relief for the Big Five, leading to improved revenue growth and rising valuations.
Iconic pen-maker Bic to acquire Toronto temporary tattoo startup Inkbox for US$65 million
January 18, 2022
Iconic French pen-maker Société Bic SA is buying Canadian temporary tattoo startup Inkbox for US$65 million in a bid to diversify its consumer product portfolio.
The deal will help Bic, which has long leaned on its classic products, such as ballpoint pens, lighters and razors, cater to younger generations that are more interested in self-expression, but who may not want the commitment of a permanent tattoo.
Housing affordability ‘likely to get worse before it gets better’ as listings hit all-time low
January 17, 2022
Canadian home sales inched higher in December as the number of listings fell to an all-time low, according to data from the Canadian Real Estate Association.
CREA said sales were up by 0.2 per cent month-over-month, but down 9.9 per cent from the record posted in December 2020. The number of newly listed properties fell about three per cent from November to December.
Crypto platform Bitfinex plans departure from Ontario, tells users to withdraw funds
January 17, 2022
Cryptocurrency exchange Bitfinex will cease offering services in Ontario as of March 1 and has told users to close out their accounts and withdraw any funds by that time.
In an announcement, the company said it would immediately close the accounts of Ontario users who have no balances on the platform and would cut off their access to peer-to-peer financing markets. No reason was given for the planned departure.
FP CryptoDecoded: Consolidation, GameFi and the metaverse all trends to watch in 2022
January 13, 2022
Industry consolidation, the growth of the metaverse and the expansion of decentralized finance are among the trends that are likely to dominate the rapidly evolving crypto sector in 2022, a panel of experts told the Financial Post on Thursday.
The comments were made during the third installment of the FP Crypto Decoded virtual series, moderated by Financial Post senior business correspondent Barbara Shecter.
Binance’s Changpeng Zhao richest Canadian on Bloomberg list with US$96 billion crypto fortune
January 13, 2022
The chief executive officer of the cryptocurrency exchange Binance has a net worth close to US$100 billion, making him the richest crypto entrepreneur in the world and by far the wealthiest Canadian, according to the Bloomberg Billionaires Index.
Changpeng Zhao, who was born in China but was raised and educated in Canada and who has Canadian citizenship, started Binance in 2017. The Bloomberg Index, which calculated the value of his stake in the company for the first time this week, pegged his net worth at US$96 billion but added that his fortune was likely much larger than that figure since the ranking did not take his personal crypto holdings into account.
CMHC to review down payments on investment properties as part of federal strategy to tackle housing risks
January 12, 2022
The federal government is planning to review the rules surrounding down payments on investment properties in a bid to curb speculation in red hot housing markets, with increases in the downpayment or restriction on the source of funds the most likely measures it might pursue, according to industry experts.
The review was one of a series of measures to combat soaring housing prices laid out within the Fairness in Real Estate Action Plan in the mandate letter from Prime Minister Justin Trudeau to Ahmed Hussen, the minister responsible for housing, in December.
Canadian bank CEOs weigh in on uncertain economic outlook in 2022
January 10, 2022
The head of Canada’s largest bank says uncertainty wrought by the Omicron variant is making it difficult to generate economic forecasts, as the country struggles with rising COVID-19 hospitalizations, employee absences and new lockdown measures.
RBC chief executive Dave McKay made the comments Monday at the RBC Capital Markets Canadian Bank CEO Conference, which brought together the chief executive officers of Canada’s top banks, as well as their primary federal regulator, the head of the Office of the Superintendent of Financial Institutions (OSFI).
Rug-pull scams raked in over US$2.8 billion in crypto in 2021, report finds
January 07, 2022
Cryptocurrency rug-pull scams were responsible for more than US$2.8 billion in illicit activity in 2021, close to an all-time high and up 81 per cent from 2020, according to a recent crime report from Chainalysis, a blockchain research company.
Rug pulls are a relatively new type of scam that has cropped up with the rise of decentralized finance (DeFi), the blockchain-based financial movement that does not rely on central bodies such as banks. In a rug pull, developers create new crypto tokens and promote them to investors to pump up their value and boost overall liquidity. They then drain the funding pool and send the token’s value crashing to zero before disappearing with the money.
CMHC-funded group proposes surtax on homes over $1 million to address housing inequality
January 05, 2022
A think-tank funded in part by the Canada Mortgage Housing Corporation (CMHC) and National Housing Strategy is proposing that homes valued at more than $1 million be subjected to an annual deferrable surtax as part of a plan to tackle housing inequality.
In a report released on Wednesday, the research organization Generation Squeeze argues that such a surtax would hit nine per cent of homes across the country and could raise between $4.54 billion and $5.83 billion to go toward other housing projects.
Kevin O’Leary-backed WonderFi to purchase Bitbuy parent First Ledger in first takeover of regulated crypto platform in Canada
January 04, 2022
Vancouver-based decentralized finance platform WonderFi Technologies Inc. announced Tuesday that it is buying First Ledger Corp, the parent company of cryptocurrency marketplace Bitbuy, for $206 million, in what would be the first acquisition of a fully regulated cryptocurrency platform in Canada.
WonderFi, which is backed by Shark Tank star Kevin O’Leary, will fund the deal by issuing 70 million new shares and pay a total of $50 million in cash, including $20 million up front, the company said in a release.
This number is no longer in service: Farewell to the BlackBerry
January 04, 2022
The year was 2012 and the Canadian crown jewel of the consumer tech scene was near peak popularity with more than 80 million active users. The ubiquitous BlackBerry swiftly became a status symbol from Wall Street to Bay Street to Rodeo Drive. It was the hotline of Barack Obama’s 2008 campaign, with the U.S. president often photographed gripping the phone well after Inauguration Day.
Fast forward to today and the once-popular cellphone has fallen far out of favour. As of Tuesday, older models running BlackBerry 10.7.1 operating systems and earlier will no longer be supported by the company. Those still using these models will no longer be able to use data, send texts, hop online, or even make phone calls.
Binance to continue Ontario operations after working with regulators
December 30, 2021
Cryptocurrency exchange Binance said it will not pull its operations out of Ontario after all, telling users in an email on Wednesday that it was successfully able to cooperate with regulators and set itself on track to register in Canada.
Binance stated its registration as a Money Services Business with the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) would allow the company to resume operations in Ontario while pursuing full registration.
Burning Questions: Could this be the year crypto finally goes mainstream?
December 30, 2021
The Financial Post takes a look at some of the biggest issues Canadians have about business and investing in 2022 in our latest Burning Questions series.
The crypto space has come a long way in 2021, as record-breaking price rallies, more new ground broken in the non-fungible token (NFT) space and the metaverse, and further innovations on the blockchain network drive the industry’s growth.
What portfolio managers are looking at heading into 2022
December 27, 2021
Volatility continues to whipsaw across the markets as COVID-19 uncertainty keeps investors on edge, something portfolio managers expect will carry over into the new year as the Omicron variant takes hold.
Other factors, such as an inflationary environment, the prospect of interest rate hikes and a shifting economic backdrop could also make 2022 another interesting year for the financial markets.
Dye & Durham’s Link acquisition makes it a global player in sector, CEO says
December 22, 2021
Canadian cloud-based software company Dye & Durham Ltd. is set to acquire Australia-based Link Administration Holdings Ltd. for $3.2 billion, an expansion that the company’s CEO says will put it on the map globally in their sector.
“First and foremost, (this deal) really, truly cements us in place as a global B2B software solutions provider,” Matthew Proud, Dye & Durham’s chief executive, told the Financial Post in a telephone interview.
‘It is going to define his legacy’: Bank of the West transaction a defining moment for BMO’s White
December 20, 2021
The Bank of Montreal made the biggest splash of chief executive Darryl White’s four-year tenure Monday when it announced it was buying BNP Paribas SA’s U.S. operations for US$16.3 billion.
BMO expects the deal, one of the biggest in Canadian banking history, will bring it 1.8 million new customers when it closes at the end of next year.
CEO Darryl White, who had been at the helm of BMO since 2017, told analysts on a Monday investor call that the transaction will be funded using cash and excess capital and will meaningfully expand the bank’s already robust growth south of the border.
CARR recommends shifting to CORRA reference rate by June 2024
December 16, 2021
The Canadian Alternative Reference Rate (CARR) recommended that the Bank of Canada moves to a more market-friendly Canadian Overnight Repo Rate Average (CORRA) in a Thursday report, and retire the original model, the Canadian Dollar Offered Rate (CDOR), after June 30, 2024.
CDOR, is partially derived from the London Interbank Offered Rate (LIBOR), was developed in the 1980s and has since been the benchmark reference rate at which Canadian banks are willing to lend.
Credit-card giants aren’t waiting to be disrupted when it comes to crypto
December 16, 2021
In 2019, credit-card giant Visa launched a full-time crypto product team for the first time after noticing that a new generation of fintechs were capturing the imaginations of customers with crypto-based digital wallets and exchanges.
“They were growing very quickly. There were millions of customers signing up … and they had billions of dollars of assets on their (platforms),’” Cuy Sheffield, Visa Inc.’s vice-president and head of crypto, told the Financial Post in a recent interview.
Average home price in Canada hits all-time high of $720,850
December 15, 2021
Canada’s hot housing market became even more heated in November as the average price hit an all-time high at $720,850, according to data from The Canadian Real Estate Association (CREA) released Wednesday.
This seasonally unadjusted figure beat out the previous record of $716,828 set in March, as the disconnect between housing supply and demand continues to push prices higher, said Cliff Stevenson, chair of CREA, in a release. “Even at what is traditionally the slow time of year for housing, conditions and price trends are at the same record levels we saw this spring. Things may calm down a bit through the balance of December and January, but next year’s spring market will no doubt be an interesting one.”
More action to address hot housing coming in budget, Ottawa says — but some are getting impatient
December 15, 2021
Those looking for Ottawa to announce significant new measures to address housing affordability in Tuesday’s fiscal update were out of luck, though the government said the issue was a “priority” and that it would take more action in the spring budget.
“We know housing prices are a real concern, especially for those in the middle class looking to buy their first home,” the government said in its fiscal update. “We will take further action in the upcoming budget.”
Canada’s financial watchdog maintains capital buffer for big banks as risks persist
December 10, 2021
The Office of the Superintendent of Financial Institutions (OSFI) is maintaining the capital buffer the country’s big banks must hold to better protect against risks at 2.5 per cent.
The buffer, which is a policy tool to ensure stability in the country’s financial system, was set at that level in June and came into effect at the end of October.
‘The big challenge is talent’: Louis Têtu on Coveo’s IPO and state of innovation economy
December 09, 2021
Quebec City-based artificial intelligence (AI) and retail tech company Coveo made its market debut on the Toronto Stock Exchange on last month at $15 per share. Louis Têtu, the company’s chairman and chief executive officer, spoke to the Financial Post’s Stephanie Hughes about the decision to go public, the Canadian tech ecosystem and the battle for talent in a tight labour market. This interview has been condensed and edited for brevity.
Mortgage surge helped fuel bank earnings, but observers split on 2022 growth
December 06, 2021
Canada’s big banks reported strong growth in mortgage originations over the past year, fuelled by the country’s hot pandemic housing market, but have differing views on whether that strength can continue in 2022.
Canadian residential mortgage and home equity line of credit (HELOC) volumes have grown by $151.2 billion or 13 per cent over the course of the pandemic, according to Bloomberg News. That growth outpaced the 2.8 per cent pace seen in non-mortgage loans.
Why crypto literacy is crucial for investors eyeing the space
December 03, 2021
Earlier this year, the U.S. website CoinDesk created a crypto literacy test with basic questions about bitcoin, blockchain and non-fungible tokens (NFTs). Out of thousands of respondents taking the online survey, the website reported, roughly 98 per cent failed. Respondents had to score over 60 per cent to pass the test.
Nine out of 10 were unaware of bitcoin’s limited supply cap, believing the cryptocurrency had an unlimited supply (bitcoin actually has a 21 million supply cap). The quiz asked other questions such as what typo of crypto is secured by an underlying asset such as fiat currencies or commodities (the answer is stablecoins) and what the smallest unit of bitcoin is called (answer: a satoshi, named after the pseudonymous creator of bitcoin, Satoshi Nakamoto).
Royal Bank of Canada to hike dividend and buy back shares after earnings miss
December 01, 2021
Royal Bank of Canada became the second Canadian bank to announce a hike in dividends in its fourth-quarter results, saying Wednesday that it would raise its payout 11 per cent to $1.20. RBC will also seek to buy back 45 million of its common shares.
RBC reported a net income of $3.9 billion in the three months ending October 31, amounting to a 20 per cent growth from the same time last year. The bank’s earnings came out to $2.71 per share, missing analyst expectations of $2.81 on average.
Toronto’s Bitbuy first crypto marketplace to receive full OSC approval
December 01, 2021
Toronto-based crypto company Bitbuy Technologies Inc. is set to announce Wednesday that it has received registration approval from the Ontario Securities Commission (OSC), making it the first registered marketplace that is also a brokerage of crypto assets.
Bitbuy was formed in 2013 as a trading platform before pivoting to become a marketplace in November 2019, merging the broker dealer business with a market infrastructure. Michael Arbus, Bitbuy’s chief executive officer, told the Financial Post that the marketplace element sets them apart from other Canadian crypto trading platforms that function solely as a brokerage or have crypto as a feature on a larger business model.
Bank of Nova Scotia hikes dividend as profit beats expectations
November 30, 2021
The Bank of Nova Scotia is hiking its dividend by more than 10 per cent and announced share buybacks Tuesday after reporting strong fourth quarter results to kick off bank earnings season.
Scotiabank said it would be raising its quarterly dividend by 10 cents per common share to $1 after the Office of the Superintendent of Financial Institutions (OSFI) lifted restrictions on dividend hikes earlier this month. The first dividend pay-out will come on Jan. 27.
Duelling metaverse ETFs set to launch in Canada, with different approaches to futuristic space
November 29, 2021
Metaverse ETFs will hit Canadian markets for the first time Monday as both Toronto-based Horzions ETFs and Evolve ETFs launch funds tracking companies involved in the space.
The Horizons Global Metaverse Index ETF (MTAV) will target a number of segments that overlap with the metaverse, including: augmented and virtual reality; the creator economy, in which companies provide platforms for individuals to create and share content; digital infrastructure; gaming; and digital payments.
Alberta looks to cut red tape for growth capital with proposed ‘corporate opportunity waivers’
November 22, 2021
Alberta growth companies could see their pool of potential investors widen if proposed amendments to Alberta’s Business Corporations Act allowing for so-called “corporate opportunity waivers” is passed.
Under proposed amendments tabled on Monday, the waivers would allow private corporations to set their own rules regarding when directors could invest in other companies and take part in projects in related industries, a measure some jurisdiction in the U.S. have implemented to boost venture capital and private equity investment.
What you need to know about bitcoin’s Taproot Update
November 18, 2021
Developers in the crypto space woke up with a new tool in the toolbox this week with bitcoin’s much-anticipated Taproot Upgrade.
Activated on Sunday, the Taproot Upgrade is designed to promote Bitcoin’s privacy, security and scalability while giving developers a larger toolbox to bring new projects to light. Taproot had been locked in earlier in June after it gained 90 per cent of support from miners.
Hamilton youth arrested in alleged $46 million crypto theft following joint probe with FBI
November 17, 2021
Hamilton Police said they’ve made an arrest in a $46 million cryptocurrency theft on Wednesday, calling it the “biggest cryptocurrency theft reported from one person”.
The suspect is described as a “youth” in Hamilton and was arrested for a theft exceeding $5,000. The victim, who is based in the United States, had been targeted in a SIM swap attack, which is a way scammers hijack accounts by tricking cellphone company employees to duplicate phone numbers onto the hacker’s SIM card so that they can intercept two-factor authorization requests.
Royal Canadian Legion creates poppy NFT to honour veterans
November 11, 2021
The Royal Canadian Legion is getting in on the NFT trend for Remembrance Day with a limited-edition non-fungible token of its own to honour the 100th anniversary of the remembrance poppy.
The organization said that the Immortal Poppy NFT will support fallen Canadian heroes in a “new, more lasting way”. The NFT is a three-dimensional 60-second looping image replica of a real poppy picked from Flanders Fields with the names of 118,000 fallen Canadian soldiers inscribed onto the petals. With the unique digital asset linked to the blockchain, the Legion said in a release that it will immortalize the memory of those who fought for their country’s freedoms.
‘A proxy for holding Bitcoin’: Crypto firms set to go public as market hits US$3 trillion
November 08, 2021
The cryptocurrency market’s total value passed a milestone US$3 trillion on Monday fuelled by gains in the prices of bitcoin and Ether, but it isn’t just the currencies themselves that are seeing an inflow of investor interest.
Since the pandemic bull market emerged, demand for publicly traded companies that participate in the crypto ecosystem have surged, too, with a number of firms such as Coinbase and Voyager Digital listing on public markets. Last week, Toronto-based crypto trading platform CoinSmart became the latest to go public, listing on the NEO Exchange, where its shares jumped by 24 per cent on their first day of trading.
Surging bond yields point to rising mortgage rates ahead, industry watchers say
November 08, 2021
Ultra-low mortgage rates offered throughout the pandemic may soon be coming to an end after the Bank of Canada last week ended its bond-buying stimulus program and signalled it would hike interest rates sooner than expected in the face of rising inflation.
The move led to a spike in five-year bond yields, a figure closely followed by mortgage lenders, by nine basis points to 1.43 per cent on the day the announcement was made.
Why Mike Silagadze calls his new DeFi fund the ‘boring way to invest in crypto’
October 28, 2021
Mike Silagadze and Andrew McGrath, known for their educational software company Top Hat, are diving into the crypto space with the launch of a US$25 million DeFi fund with the recently established Gadze Finance. The pair spoke to the Financial Post’s Stephanie Hughes about crypto regulation, democratizing finance, and why their fund is the “boring way to invest in crypto.” This interview has been edited and condensed.
Who is Edward Rogers, family scion at the centre of the Rogers storm?
October 22, 2021
Way before Edward Rogers, son of Rogers Communications Inc. founder Ted Rogers, triggered a crisis in the company’s leadership last month, his father got him a job at Comcast Corp.
Edward was fresh off completing his Bachelor of Arts at the University of Western Ontario in 1992 and Ted was specific in his instructions to his counterpart, Ralph Roberts, founder of Comcast, according to Bob Brehl, who’s written several biographies on the Rogers dynasty.
People are paying real money for virtual real estate in the metaverse
October 21, 2021
Location, location, location. That’s the common phrase for success in the real estate market, and it’s no different when these properties are listed in an alternative virtual reality, called a metaverse.
Square signals Toronto-based executive will lead push into bitcoin mining
October 19, 2021
Square Inc. chief executive Jack Dorsey says the financial services company is considering an entry into the bitcoin mining space — and it appears that one of Square’s Toronto-based executives will be leading the project.
Bitcoin mining is a process in which high-powered computer rigs solve complex mathematical problems, leading to the creation of new bitcoin and supporting the existing network.
Aritzia sales top pre-pandemic levels on strong U.S., e-commerce growth
October 14, 2021
Vancouver-based fashion retailer Aritzia Inc. reported second-quarter sales Wednesday that exceeded pre-pandemic levels as in-store shopping rebounded and e-commerce continued its rapid growth.
Aritzia, which was founded in 1984 as a standalone boutique, posted $350.1 million in net revenue for the three months ending Aug. 29, jumping by roughly 75 per cent since the same reporting period last year.
Crypto is less anonymous than you thought — and it might be a good thing
October 14, 2021
Follow the crypto. That’s what the Federal Bureau of Investigation likely did after Colonial Pipeline Co., a U.S.-based refined oil pipeline operator, was forced to pay US$4.4 million in cryptocurrency after its systems were disabled by a ransomware attack in early May.
To track down the funds, authorities would have accessed the public blockchain ledger that recorded the payment and pulled out the mix of characters that indicated the digital addresses that received the money, according to Pamela Clegg, vice-president of financial investigations at U.S.-based blockchain forensics firm CipherTrace, which researches and works with federal authorities in these kinds of cases.
Posthaste: Small businesses, restaurants call for extension of government pandemic benefits
October 13, 2021
Business leaders are calling on the federal government to extend COVID-19 benefits for small business and food service operators, saying moving ahead with plans to end the wage and rent subsidies on Oct. 23 will pull the safety net out from under struggling business owners.
‘No easy feat’: How Coinberry became Canada’s first regulated crypto-only trading platform
October 08, 2021
Getting nationwide regulatory approval for a crypto exchange is no easy task. But after years of consulting with Canadian regulators, Coinberry became the first pure-play, crypto-only trading platform (and second overall) to be fully registered across all of the provinces and territories in August. Andrei Poliakov, Coinberry’s chief executive officer and co-founder, spoke with the Financial Post’s Stephanie Hughes about what it takes to become a regulated exchange in Canada. This interview has been edited and condensed.
One million new homes needed in Ontario in next 10 years to end ‘cruel game of musical chairs’
October 07, 2021
With Ontario’s population growing rapidly, one policy think tank argues that Canada’s most populous province will need about one million new homes over the next 10 years.
Ottawa-based Smart Prosperity Institute and Ontario Home Builder’s Association arrived at the near-million home figure after exploring how many homes and what types of homes would be needed to reach the needs of the anticipated 2.27 million more people who will reside in the province over the next 10 years, according to the Ontario Ministry of Finance.
Ontario urged to overcome NIMBYism and change zoning laws to ease Toronto’s housing crunch
September 30, 2021
Archaic’ zoning laws are at the heart of Toronto’s affordable housing problems and need to be redrafted, says the province’s real estate association.
The zoning regulations prohibit Toronto neighbourhoods from converting a single-family home into a townhome, duplex, triplex or fourplex.
Vancouver’s Dapper Labs to produce digital football collectibles after reaching deal with NFL
September 29, 2021
Canadian blockchain company Dapper Labs Inc. will be adding NFL highlights to its roster of digital collectibles after signing a partnership agreement with the National Football League (NFL) and the National Football League Players Association (NFLPA), the company announced Wednesday.
The collectibles, also known as “Moments,” will allow fans to buy, sell and trade in-game digital moments from the football league throughout the season as well as some of the greatest plays in the NFL history. The launch date has not yet been disclosed, though the company expects to have these NFTs on the market by the end of the current season. Terms of the deal were not revealed.
More than half of small businesses don’t feel supported by their government and banks
September 28, 2021
As COVID-19 restrictions slowly lift across most provinces and small business owners are able to open their doors again, a recent Equifax Canada survey found that the majority of them do not feel supported by their banks and government.
In a nationwide panel of 300 small business owners, 52 per cent of respondents said they were not getting the proper supports from their banks. Sixty-two per cent said that they felt this way about their government.
There has never been more housing under construction in Canada — but the city that needs it the most is missing the boom
September 24, 2021
Canada is in the midst of a record housing construction boom, but Toronto is notably absent from this surge, according to the Royal Bank of Canada.
Canada has long wrestled with a housing supply shortage problem, but over the past year, it’s not for a lack of building. A report by the Royal Bank of Canada found that housing starts over the past 12 months were at their strongest since 1977 and the number of new housing units currently under construction is at an all-time high.
Mogo’s David Feller talks open banking, the rise of crypto and Canada’s evolving fintech landscape
September 23, 2021
Mogo is no stranger to change. The Vancouver-based fintech company has been working to keep up with innovations in the digital banking world since it was launched in the early 2000s. These days, it’s navigating the growth of crypto, the rise of free stock trading and the pending arrival of open banking. David Feller, Mogo’s founder and chief executive officer, spoke with the Financial Post’s Stephanie Hughes this week about Canada’s rapidly evolving fintech landscape and his company’s plans.
CIBC rolls out new logo in makeover strategy
September 22, 2021
The Canadian Imperial Bank of Commerce (CIBC) is getting a makeover with a new logo the company plans to roll out across all of its marketing and advertising platforms this Thursday.
Customers can also expect to see the new logo in their own branches over the coming year.
Cryptocurrencies swept up in China property crisis that’s rattling the world
September 21, 2021
China’s growing property crisis kicked off the week by sending the markets into a spiral, and cryptocurrencies were not spared the turmoil.
The Chinese property developer, Evergrande Group, has been plagued with a ballooning debt crisis that prompted a crackdown on real estate firms by Xi Jinping’s government.
Canada faces skilled labour crunch when 700,000 tradespeople retire this decade, warns RBC
September 16, 2021
Addressing Canada’s skilled trade shortage problem will be no easy feat, but it’s an issue that employers and policymakers will need to address before the country is hit with a skilled labour crunch, according to Royal Bank of Canada in a report released Tuesday.
Canada’s workforce will see a 10,000-worker deficit in 56 nationally recognized so-called Red Seal trades over the next five years — a scarcity that could be widened tenfold when 250 provincially regulated trades are added into the mix. Red Seal certificates ensure a worker has met the national standard in their trade. The report added these shortages will be particularly felt in high-demand jobs such as industrial mechanics, boilermakers and welders.
Crypto gains can come with a hefty — and unexpected — tax bill
September 16, 2021
The potential for big returns has been drawing more and more Canadians into cryptocurrency markets in recent years, but for some cashing in has come with a hefty — and unexpected — tax bill attached.
“It’s not as straightforward as buying some stock,” said Mehran Sedigh, a cryptocurrency tax expert at Toronto-based accounting agency Triple M Professional Corp. who has worked with a number of clients audited by the Canada Revenue Agency (CRA) because their crypto earnings were misfiled.
Canadians consider splitting a mortgage with friends. But it’s complicated
September 14, 2021
Canada’s hot housing markets have been pushing home affordability out of reach for younger Canadians over the years, meaning that in order to get a piece of the market, some Canadians will have to get creative.
According to a survey by real estate company RE/MAX, one in three Canadians are looking into alternative ways to finance their dreams of home ownership, such as multi-person housing, which could have a group of friends or family pool together their finances to get approved for a mortgage. At least 13 per cent of those surveyed are seriously considering a group financing option to afford a home.
Posthaste: Non-homeowners twice as likely to miss a bill payment — underscoring wealth inequality in Canada
September 10, 2021
The average Canadian homeowner owes $393,887 in total debt, according to a study by the Canadian credit and financial services company Borrowell. That’s about 19.5 times the amount that non-homeowners owe, though real estate-owning Canadians tend to have an easier time with rising costs of living, the report suggests.
Canadian homeowners shoulder an average of $359,597 in mortgage debt and $34,290 in non-mortgage debt.
Choppy waters: Ontario canoe maker posts jobs only for ‘unvaccinated individuals’
September 07, 2021
An Ontario canoe company turned heads this week when it posted a job ad requiring applicants to not be vaccinated against COVID-19.
“Please DO NOT apply if you have taken any vaccines for COVID-19,” read the job posting for watercraft retailer Souris River Canoes. “We will only be considering unvaccinated individuals.”
Real estate doubters can now double down as Horizons’ introduces leveraged sector ETFs
September 03, 2021
A new ETF product is giving investors the chance to double down on their negative bets on Canada’s real estate sector, which has defied its doubters for years.
Horizons ETFs Management (Canada) Inc. this week launched a pair of leveraged ETFs that track the Solactive Equal Weight Canada REIT Index, and give investors the chance to place bets either for or against the sector.
Bomb Squad combines a retail experience with NFTs for a good cause
September 02, 2021
David Krovblit’s art often gives objects a different meaning. For example, the Toronto-based artist’s Fabergé grenades take tools of warfare and turn them into works of art. Now, his grenade art will be featured in the Bomb Squad NFT launch in collaboration with packaging and accessories brand Clikbo Labs, with a portion of the sales going to an anti-violence campaign.
Non-fungible tokens (or NFTs) are digital assets, such as a digital painting or online collectible, that are one-of-a-kind. Demand for them exploded in early 2021, pushing the NFT marketplace OpenSea to a record sales volume of US$1.9 billion in August alone. As the NFT trend picks up steam, more people are looking to get on board.
Crypto mortgages are coming, but there are big hurdles to their acceptance
September 02, 2021
This summer, cryptocurrencies moved into new territory in Spain when a bill was introduced that would allow borrowers to pay their mortgages using the digital assets. The proposed legislation, aimed at deepening the acceptance, use and regulation of digital currencies, would also allow the real estate industry to invest in mortgage pools using crypto and encourage banks to use blockchain technology to keep track of mortgages and insurance.
Spain is further along than Canada in contemplating the incorporation of crypto into daily financial affairs, but it is hard not to wonder whether it is just a matter of when — not if — crypto mortgages become a reality here.
New mortgages surge to record high, raising red flag about HELOC growth
August 31, 2021
House-hungry Canadians drove new mortgage volumes up to a quarterly high, soaring 60.2 per cent to more than 410,000 in the second quarter from the year before, according to new data from credit company Equifax Canada.
The size of the average new mortgage loan also jumped by 22.2 per cent from last year to more than $355,000.
This is how much the Big Six banks would have to pay if Trudeau’s tax goes through
August 26, 2021
The Liberal Party is vowing to target bank and life insurance profits with a three per cent surtax on profits over $1 billion, a move they expect will free up an additional $2.5 billion a year in government revenue over the next four years starting from 2022.
Given the sizeable earnings the Canadian banks reported this week, the Big Six could end up contributing a significant amount to government coffers under the plan. But just how much would each bank be forced to pay?
Hut 8 Mining CEO Jaime Leverton on Canada’s bitcoin mining boom
August 26, 2021
The recent run-up in the price of bitcoin is fuelling a new round of interest in crypto mining, especially after a crackdown in China sent miners scrambling for more receptive pastures, including Canada. For Jaime Leverton, who has been chief executive of the Canadian bitcoin miner Hut 8 Mining since December, that spells opportunity. Leverton spoke to The Financial Post’s Stephanie Hughes about the Canadian bitcoin mining scene and what she has in store for Hut 8. This interview has been edited and condensed.
Visa is jumping on the NFT bandwagon with $150,000 CryptoPunk purchase
August 25, 2021
Credit card giant Visa Inc. is wading into the non-fungible token (NFT) space with the purchase of a “CryptoPunk,” which it bought with US$150,000 worth of the Ethereum cryptocurrency.
CryptoPunks, a series of digital avatars each with a unique design, were among the first NFTs on the Ethereum blockchain network when they were released back in 2017.
Liberal housing platform includes foreign home buying freeze, blind bidding ban
August 24, 2021
The Liberal Party is proposing to place a freeze on foreign home buying and to ban blind bidding as part of an election housing platform aimed at improving affordability in Canada’s major cities.
Party leader Justin Trudeau unveiled the platform in a speech to media in Hamilton, Ont., Tuesday.
Posthaste: Credit market rebound may point to an economic recovery – but don’t count out Delta
August 24, 2021
Recovering credit demand may be a sign that the economy is slowly finding its feet again, according to a new report out this morning.
The study by consumer credit reporting agency TransUnion found that overall credit market health improved, with the performance of key consumer credit trends rising by nine basis points from the first quarter to 93.5 points in Q2 2021. The score, tracked by the firm’s Credit Industry Indicator, is influenced by credit supply, consumer behavior and performance.
National Bank becomes the first major Canadian bank to scrap online trading commissions
August 23, 2021
Just in time for Canada’s bank earnings season, the country’s sixth largest bank is stepping up its game by announcing on Monday that it would be scraping its online trading commissions, calling it the “most competitive online brokerage fee structure on the Canadian market.”
Zero-commission trading would take place within clients’ direct investments accounts for Canadian and U.S. stocks, as well as exchange-traded funds, the bank said in a statement. National Bank is expected to be the first major Canadian bank to do so, putting its competitors on notice.
How federal parties plan to fix housing crisis after years of failed policies
August 20, 2021
One of the most pressing issues for Canadians as the election campaign heats up is the soaring cost of housing. The Conservatives and NDP wasted no time in releasing platforms with promises to address the problem, using solutions largely targeting new home construction and favourable tax measures.
The Liberals haven’t been as quick to the draw in releasing a full-fledged party platform on housing. But after years of policies that real estate analysts and financial watchdogs say have failed to meaningfully move the needle, Prime Minister Justin Trudeau has plenty of work to do to convince priced-out younger Canadians that he can rein in runaway home prices.
