The annual pace of new home construction rose nearly 16 per cent in July compared with June, the Canada Mortgage and Housing Corporation said.
CMHC said the seasonally adjusted annual rate of housing starts rose to 245,604 in July, up from 212,095 in June.
Canada’s long-run average is for about 200,000 new homes to be built every year, so the current pace is well ahead of that. The six month average now sits at 204,376 as of July, up from 199,778 in June.
Economists had been expecting the rate to come in at around 210,000, according to Bloomberg.
Most of the surge came from a boom in multiple-unit construction for things like condos and apartments, which rose 18.8 per cent to 184,431. Single detached urban starts climbed 12.3 per cent to 47,564.
Rural starts were estimated at a seasonally adjusted annual rate of 13,609 units.
” Housing starts continue to rebound nicely,” Bank of Montreal economist Priscilla Thiagamoorthy noted. “Strong underlying demand and low rates mean builders likely won’t be packing away those hammers anytime soon.”
Construction increased in every province except Manitoba. Alberta’s number rose for the first time in three months, but the province is still see construction activity well below the usual level.
Saskatchewan ramped up, bringing home construction to the highest level in the province since October 2014. Ontario climbed 8 per cent following a 36 per cent increase the month earlier.
Quebec held steady while activity increased in Atlantic Canada, especially New Brunswick where construction activity hit the highest level since 1990.
Passengers who are unable to wear a face mask due to a medical condition must now present an official doctor’s note stating that they are exempt from the rule, or they will be denied boarding.
Since April 20, it’s been mandatory for air travellers to cover their mouth and nose during airport screenings while boarding and at all times during a flight, unless while eating, drinking or taking oral medication. Infants are not required to wear masks.
WestJet, one of Canada’s two largest airlines, said in a statement on Twitter that its passengers have done an excellent job of adhering to the rule so far.
“Travellers are required to show that they have a suitable face covering prior to boarding a WestJet flight and will be asked to temporarily remove the mask while their identification is verified,” the company said. “Should a guest be unable to provide a physician’s exemption, they will be denied travel until clearance is produced.”
The airline said if travellers want to fly without a mask, they must provide a medical note that:
has been issued by a medical professional.
is on official letterhead.
clearly states the passenger’s name and that they have a medical condition that prevents them from wearing a mask.
There are medical reasons that could make wearing a mask difficult, from certain lung conditions to anxiety disorders.
As mandatory mask rules have rolled out in cities across the country during the pandemic, some groups have created and distributed illegitimate medical exemption cards to protest city bylaws.
Canada’s border with the United States is still closed to nearly all non-residents, and Transport Canada continues to recommend against all non-essential travel. International travellers are required to isolate for 14 days upon their return to Canada.
French rail giant Alstom SA is warning that problems at Bombardier’s train division may affect negotiations to buy it, but says it still plans to go ahead with the takeover deal.
Alstom says that “negative developments” around the train unit’s operations and finances revealed in Bombardier’s quarterly earnings report last week have prompted the would-be buyer to “take into account the consequences” during upcoming discussions.
On Thursday, Bombardier reported an additional charge of $435 million US at its rail business, largely related to costs at late-stage projects in the U.K. and Germany.
Late last month the European Commission gave the green light to Alstom’s US$8.2-billion purchase of the Bombardier train unit following an investigation that found the transaction raised serious competition issues, prompting “significantly improved” commitments from Alstom, according to European competition authorities.
A Bombardier spokesperson says it is complying with all the conditions of the deal and that it will continue to work toward signing the final agreement as soon as possible.
The sale, which would help ease Bombardier’s US$9.3-billion debt, was initially slated to close in the first half of 2021.
A strong surge in the price of Canada’s most desirable houses seems to fly in the face of an economy facing a record wave of bankruptcies and a sharp loss in jobs.
But as we try to disentangle the complexities of the COVID-19 pandemic’s impact, we may be observing a powerful economic force exacerbated by the promise of a long stretch of low-interest loans.
Effectively what we are seeing is that while parts of the economy weaken, the weakness is not shared equally. A similar process applies to people who have kept their jobs — and thus their incomes — flowing and to businesses, both able to profit from their short-term budgetary advantage.
While many smaller corporations and even more small businesses, such as corner stores and restaurants, go under, companies and individuals with a solid base and a strong cash flow can borrow at historically low rates — allowing them to stock up on assets they expect will keep their value once the crisis is over.
House prices not falling
National figures on house prices from the Canadian Real Estate Association are out a week from today. But early speculation that property prices would fall has certainly not been borne out in Canada’s hottest markets.
And that comes despite new figures on Friday that show 1.3 million Canadian jobs have disappeared since the pandemic struck.
Even while rental properties face a glut, sales and prices for homes in Vancouver and Toronto are both up sharply. In Toronto, real estate board figures show detached home prices in July rose more than 25 per cent year over year — increases similar to the biggest boom years, from 2010 to the spring of 2017, of what many described then as a growing real estate bubble.
“We’re seeing the results today of pent-up activity, from both homebuyers and sellers, that had been accumulating in our market throughout the year,” Colette Gerber, chair of the Real Estate Board of Greater Vancouver, said last week. “Low interest rates and limited overall supply are also increasing competition across our market.”
Mortgage brokers report that banks have tightened their requirements for who can get a loan, but for those eligible, five-year fixed mortgages can be two per cent or lower.
And of course that’s the trouble with cheap money, especially at times when people are in danger of losing their jobs and businesses: It tends to go to those who need it the least — in other words, those most certain to pay it back.
Research in the United States shows that while small businesses owned by Black people failed at an astounding rate of 41 per cent — almost double the still very large decline of 22 per cent for all small businesses — there is evidence that government support did not go to the areas of greatest need. The smallest businesses received less support, as did businesses owned by people of colour.
In those cases, poorly designed aid programs that were rushed out the door to stave off a crisis may have been part of the problem, wrote Gillian Tett in the Financial Times.
“The more the pandemic spreads, the more it risks exacerbating inequity in unexpected ways, particularly, but not exclusively, in the U.S.,” Tett suggested.
There are increasing signs the same thing is happening in the corporate world. There were reports that mergers-and-acquisition activity, as company takeovers are called in the business world, slumped early in the pandemic when fears for the economy were highest.
“COVID-19 could further exacerbate concentration, with many larger incumbents able to purchase distressed companies cheaply — as we’ve seen with the U.S. tech giants, which continue with their mergers-and-acquisition activity, even while under investigation for antitrust violations,” said Denise Hearn, co-author of The Myth of Capitalism, writing in Canada’s Hill Times last week.
When businesses whose finances have been stretched too far go broke during a downturn, some die and disappear. But other companies with stronger cash flow or deeper pockets step in to pick off the companies or portions of companies they think will be worthwhile following the crisis — effectively preserving value to the economy created by the previous owner.
Just as in the housing market, low interest rates matter because stable companies with cash flow and deep pockets have access to all that cheap money created by central banks. Quite reasonably, for lenders, bankrupt companies already deep in debt are not such good prospects.
While this capital concentration may be natural, fulfilling the proverb “them that has, gets” — which traces its origins at least as far back as the New Testament (Matthew 25:29) — making the rich richer and big companies bigger is not necessarily politically desirable.
There was speculation early in the pandemic that the crisis might be the catalyst for a move away from wealth polarization. But just as they did after the 2008 crisis, lower-for-longer interest rates have once again flowed straight into the pockets of the wealthiest.
As governments brainstorm on how to phase out support for the financial victims of the coronavirus, it appears they may not be able to depend on low rates alone to solve the long-term trends toward greater inequality and capital concentration.
Most consumers want to buy local, but it’s tough to resist deals during a pandemic
Many of us are being urged to shop local and support small businesses struggling to survive in the wake of COVID-19. But while polls show that most Canadians support this idea, experts say it’s hard to get consumers to prioritize shopping locally when they can often secure better deals online from big-box stores. And with more and more people facing financial insecurity, it can be difficult to make decisions based on things other than price. Read more about the challenges facing small businesses.
Everything you need to know about using face masks properly
Now that wearing a mask is an everyday activity for most Canadians, it’s a good time to make sure we’re using them effectively. For example, pulling a mask down to your chin in between uses might be convenient, but experts say that’s not a good idea. Get answers to your burning questions about masks here.
It doesn’t look likely that the Canada-US border will open any time soon.
With COVID-19 cases still rising in many American states, the border closure is set to continue. “There’s really no reason why the Canadian government, at this point, would want to open it up and subject Canadians to an increased rate of COVID infections,” says U.S. immigration lawyer Len Saunders. Canadians can still fly to the U.S., but that rule isn’t reciprocal. U.S. visitors remain prohibited from entering Canada via any mode of transport unless they’re visiting immediate family members, including dependent children, spouses, and common-law partners. Read more about where the status of the border here.
Many of us are looking to get our driveways freshly paved this summer, but not all contractors are created equal. Have you had a challenging experience with a paving contractor? Or has a door-to-door contractor taken your money and not finished the job? Tell us your story at email@example.com.
Do you have a buzzworthy product that you think is bogus? Whether you’ve seen products that seem too good to be true on Instagram, trendy items on TikTok, or fishy ones on Facebook, we want to hear about it. Email us at firstname.lastname@example.org.
Catch up on past episodes of Marketplace any time on CBC Gem.
U.S. employment growth slowed considerably in July amid a resurgence in new COVID-19 infections, offering the clearest evidence yet that the economy’s recovery from the recession caused by the pandemic was faltering.
Non-farm payrolls increased by 1.763 million jobs last month after a record 4.791 million in June, the Labour Department said on Friday. Economists polled by Reuters had forecast 1.6 million jobs would be added in July.
The unemployment rate fell to 10.2 per cent, from 11.1 per cent in June, but it has been biased downward by people misclassifying themselves as being “employed but absent from work.” At least 31.3 million people were receiving unemployment checks in mid-July.
“The steam has gone out of the engine and the economy is beginning to slow,” said Sung Won Sohn, a finance and economics professor at Loyola Marymount University in Los Angeles. “The loss of momentum will continue and my concern is that the combination of the virus resurgence and lack of action by Congress could really push employment into negative territory.”
The labour market step-back is more bad news for President Donald Trump, who is lagging in opinion polls behind former vice-president Joe Biden, the presumptive Democratic Party nominee for the Nov. 3 election.
It also piles up pressure on the White House and Congress to speed up negotiations on a second aid package, which have been dragging over differences on major issues including the size of a government benefit for tens of millions of unemployed workers.
Infections of the respiratory illness soared across the country last month, forcing authorities in some of the worst affected areas in the West and South to either shut down businesses again or pause reopenings, sending workers back home. Demand for goods and services has suffered.
The slowdown in hiring challenges the U.S. stock market’s expectation of a V-shaped recovery. The S&P 500 index is up nearly 50 per cent from its March trough. As COVID-19 cases spiral, and Republicans and Democrats bicker over another stimulus package, economists see a W-shaped recovery.
Economists estimate the Paycheck Protection Program, which gave businesses loans that can be partially forgiven if used for employee pay, saved around 1.3 million jobs at its peak. The extra $600 US weekly unemployment checks made up 20 per cent of personal income and helped to boost consumer spending in May and June.
Our weekend business panel discuses the unprecedented economic crisis in Lebanon following this week’s deadly explosion in Beirut. Plus, Ottawa is imposing retaliatory tariffs on U.S. goods in response to President Donald Trump’s decision to restore a 10 per cent tariff on Canadian aluminum imports. Is Canada headed for another trade war with the U.S.?
Walmart Canada will require all customers and staff to wear a mask or other type of face covering in its stores nationwide, starting Aug. 12.
The company says the move is the latest safety measure it is taking in response to the COVID-19 pandemic.
“Health Canada has identified that, when worn properly, a person wearing a mask/face covering can reduce the spread of his or her own infectious respiratory droplets,” corporate affairs manager Felicia Fefer said in an email to CBC News.
Walmart has more than 400 stores in Canada.
Fefer said local government mandates already require face coverings in more than 60 per cent of those stores, but the company wanted to go further and “help bring more consistency across our store network.”
“Safety continues to be Walmart’s No. 1 priority and we will continue to take measures necessary to ensure the well-being of our customers and associates,” she said.
“We trust that customers in the rest of our stores where we are initiating this policy will respect and follow it and will bring their own face coverings when they shop.”
Canadian customers likely won’t start frequenting stores for items not on their shopping list until there’s a vaccine for COVID-19, Indigo Books & Music Inc. founder and chief executive said Friday.
“I think our own view is that customers will continue well, well into the months ahead to make shopping an activity they do when they have something specific to buy,” Heather Reisman said during a conference call with analysts. The company released its first-quarter financial results after markets closed Thursday.
Foot traffic is “still way down” for the book retailer, which shuttered all its stores to help stop the spread of the coronavirus and only reopened nearly all 182 of its locations by the end of its most recent quarter.
The Toronto-based company’s revenue for the 13 weeks ended June 27 fell to $135.1 million from $192.6 million due to store closures. It recorded a net loss of about $31.6 million or $1.15 per common share compared with a loss of about $19.1 million or 69 cents per share in the same quarter last year.
Since reopening, retail store sales have tracked at about 72 per cent of sales at the same time last year, said chief financial officer Craig Loudon.
However conversion and average transaction size are both “way up,” noted Reisman.
“So, that’s saying that you’ve got a deliberate customer and we think that that’s going to remain, frankly, until there’s a vaccine.”
In Canada, people watch the news and are afraid of the virus, she said.
“So, all in all, we predict that the retail consumer will remain a cautious consumer,” she said.
The company is working to make the shopping experience easy and safe and is planning for the important holiday shopping season although it remains to be seen how consumers behave during a usually busy period.
The company accelerated efforts during the first quarter to help serve customers safely during the holiday season, including “a robust click-and-collect capability and Instacart service,” said Reisman. These efforts should be implemented in the current quarter.
The company’s e-commerce revenue grew threefold, jumping up 214 per cent for the quarter compared with last year. That demand “has moderated, but remained strong” as stores reopened, said Loudon.
Indigo’s shares, which have plunged from a high of $8.06 last August, surged 19 per cent or 20 cents at $1.25 in afternoon trading on the Toronto Stock Exchange.
Enerplus Corp. says it has restored North Dakota crude oil production halted during the pandemic-linked oil price crash in May despite a court ruling last month that the Dakota Access Pipeline must be shut down.
The Calgary-based company says it is confident that crude-by-rail shipping from the state can be ramped up if the decision, stayed by an appeal court earlier this week, is restored and the pipeline that moves oil out of the state is out of commission for a longer term.
Last month, a U.S. District Court judge ruled the three-year-old pipeline must be closed down and emptied while the U.S. Army Corps of Engineers conducts a more extensive environmental review. The stay by the U.S. Court of Appeals this week is only a temporary reprieve.
Getting barrels out of the North Dakota Bakken oil basin won’t be a problem because up to 800,000 barrels per day moved by rail before the 570,000-bpd pipeline began operating, pointed out Enerplus chief financial officer Jodine Jenson Labrie on a conference call on Friday.
The higher cost of rail, however, would likely result in lower profit margins for oil producers, she said.
“There remains a lot of rail infrastructure in the Bakken,” she said, noting that discount pricing in relation to benchmark U.S. crude would likely widen from about $5 US per barrel to between $6 and $8 US with rail transport.
“In terms of impact to Enerplus, if we were to assume the pipeline could not operate for all of 2021, we estimate the wider Bakken differential would impact our corporate netback by approximately 80 cents per boe (barrel of oil equivalent),” she said.
The company “hit the brakes” on oilfield activity in North Dakota in May as oil prices plummeted due to a global glut of barrels from OPEC-plus overproduction as demand fell thanks to the COVID-19 lockdowns, said CEO Ian Dundas.
“As we entered May, with the weakness in the oil market, our teams began curtailing volumes rather than risk negative margins,” he said.
“We ended up curtailing approximately 25 per cent of our corporate liquids volumes and, as the market continued to improve in June, we began restoring curtailed volumes.”
Enerplus reported a second-quarter net loss in Canadian funds of $609 million or $2.74 per share due to non-cash impairments of $630 million on assets and goodwill as a result of market volatility and low commodity prices.
That compares with a net profit of $85 million or 36 cents in the same period of 2019.
Excluding those impairments and other non-cash or non-recurring items, its adjusted second quarter net loss was $41.2 million, versus adjusted net income of $74.4 million a year earlier.
Analysts said the company’s financial results beat consensus estimates, as did second-quarter production of 87,360 barrels of oil equivalent per day, down 11 per cent from the first quarter.
Enerplus reinstated its 2020 guidance cancelled earlier this year, calling for an unchanged capital budget of $300 million and average production of between 88,000 and 90,000 boe/d.