Today’s news: Trending business stories for September 18, 2023


Breadcrumb Trail Links News The latest business news as it happens Published Sep 18, 2023  •  Last updated 1 day ago  •  10 minute read Shoppers browse produce at a Loblaw Cos. Ltd. grocery store in Toronto. Photo by Cole Burston/Bloomberg files Article content Today’s top stories Advertisement 2 This advertisement […]

The latest business news as it happens

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Today’s top stories

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6:17 p.m.

Big grocers agree to find ways to lower food prices

Canada’s five biggest grocers — Loblaw Cos. Ltd., Sobeys’ parent Empire Co. Ltd., Metro Inc., Wal-Mart Canada Corp. and Costco Wholesale Canada Ltd. — agreed to work with Ottawa to stabilize food inflation in a “historic” meeting with the federal government.

“This is a step in the right direction,” said industry minister François-Philippe Champagne. “We’ll keep on pushing them, trust me. This is just the beginning.”

While the grocers agreed to work with the government, it’s not yet clear what exactly that work will look like.

Champagne’s spokesperson Audrey Champoux said the next step is for the companies to come up with their own plans on tackling inflation and present them by Thanksgiving.

Read more.

5:30 p.m.

Unifor asks members to ‘prepare for all scenarios’ as Ford strike deadline nears

A general view of the Ford Michigan Assembly Plant in Wayne, Michigan.
A general view of the Ford Michigan Assembly Plant in Wayne, Michigan. Photo by Bill Pugliano/Getty Images files

Contract talks between Ford Motor Co. and Unifor union officials are continuing ahead of a midnight strike deadline.

“As of now a tentative agreement has not been reached,” Unifor national president Lana Payne said in a statement. “While we remain at the table the likelihood of a strike increases with each passing hour.”

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Unifor, which represents more than 5,600 members at Ford facilities in Canada, has asked workers to “prepare for all scenarios, including strike action.”

Payne said the union’s priorities remain the same: pensions, wages, electric-vehicle transition and investment.

4:30 p.m.

TSX composite down almost 130 points, U.S. stock markets essentially flat

Losses in technology and base metal stocks helped lead a broad-based decline as Canada’s main stock index fell almost 130 points, while U.S. stock markets lost steam midway through the trading day to essentially end flat.

The S&P/TSX composite index was down 129.51 points at 20,492.83.

In New York, the Dow Jones industrial average was up 6.06 points at 34,624.30. The S&P 500 index was 3.21 points points at 4,453.53, while the Nasdaq composite was up 1.90 points at 13,710.24.

The Canadian Press

3:44 p.m.

Bank of America expects soft landing for U.S. economy

The Marriner S. Eccles Federal Reserve building in Washington, DC.
The Marriner S. Eccles Federal Reserve building in Washington, DC. Photo by JIM WATSON/AFP via Getty Images files

Bank of America Corp. chairman and chief executive Brian Moynihan said he feels like a “curmudgeon” for saying young people are making a bigger adjustment to higher interest rates than their elders who have seen it all before — but that didn’t stop him from doing so at the opening of the Sibos 2023 conference in Toronto.

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It’s “a whole different world where cash is not free,” Moynihan said from the conference stage on Sept. 18, laying out the reaction of those including his own colleagues who are too young to have lived through a much higher rate environment in the 1970s and 1980s and who got used to near-zero rates following the 2008 financial crisis.

During a discussion on the first day of the four-day finance conference organized by global financial transaction network Swift, Moynihan said Bank of America is expecting a soft landing for the U.S. economy, but cautioned there is still a risk the Federal Reserve could make an “error of over-hiking” rates before the previous increases have fully worked their way through the system to tame inflation.

He said his team was initially predicting a recession but they have tempered their view as a result of the momentum in the economy.

The bank CEO struck a lighter note when discussing Bank of America’s experience developing technology to allow customers to bank quickly when and where they want to do business. The transition involved turning to experts outside the financial institution, at first, to ensure customer queries about finances were recognized by the technology and prompted an accurate response.

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“The question, ‘What’s my balance?’ means different things if you ask it outside the financial services realm,” Moynihan said. “Like, you might get an invitation to yoga class out of that.”

Barbara Shecter

3:28 p.m.

Ottawa urges U.S. appeals court to reverse Line 5 shutdown order

The east leg of the Enbridge Inc. Line 5 pipeline near St. Ignace, Michigan.
The east leg of the Enbridge Inc. Line 5 pipeline near St. Ignace, Michigan. Photo by Dale G. Young/Detroit News via AP files

Ottawa is urging a U.S. appeals court to reverse a Wisconsin judge’s order that threatens to shut down the Line 5 cross-border pipeline by June 2026.

Forcing a shutdown would violate Canada’s treaty rights, government lawyers argue in an amicus brief filed today with the U.S. Seventh Circuit Court of Appeals.

A Wisconsin court ruling in June gave Calgary-based Enbridge Inc. an ultimatum: reroute the pipeline around an Indigenous reserve within three years or shut it down.

Read more.

The Canadian Press

2 p.m.

Air passenger complaint backlog tops 57,000 — a new peak

Passengers line-up during flight delays and cancellations at Toronto's Pearson International Airport. The backlog of air passenger complaints at Canada’s transport regulator has hit a new high.
Passengers line-up during flight delays and cancellations at Toronto’s Pearson International Airport. The backlog of air passenger complaints at Canada’s transport regulator has hit a new high. Photo by Aaron Vincent Elkaim/The Canadian Press

The backlog of air passenger complaints at Canada’s transport regulator has hit a new high topping 57,000, as dissatisfaction over cancellations and compensation persist three and a half years after the outbreak of the COVID-19 pandemic.

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The numbers reveal that an average of more than 3,000 complaints per month have piled up at the Canadian Transportation Agency (CTA) over the past year, with the current tally well over three times the total from September 2022.

Vancouver residents Chad Kerychuk and Melissa Oei say they are mulling a complaint after they arrived in Halifax six hours later than planned on a flight from their hometown in August 2021 and found themselves separated on board despite buying pricier tickets to select side-by-side spots in advance.

The couple said WestJet Airlines Ltd. has rejected their request for a partial refund.

“More than a year has lapsed since the departure date and the claim period has expired. As such, your claim cannot be approved,” WestJet told them in an email.

Kerychuk said the response “feels like a wrong way to treat loyal customers” after years of opting for that carrier over competitors.

“There was no effort made to support us, because we supported them during the pandemic. And I thought that was completely unfair,” he said in a phone interview.

WestJet said the disruption was caused by unplanned maintenance, an exclusion from compensation rules that the federal government says will soon be unavailable to carriers.

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In June, the government passed legislation to overhaul Canada’s passenger rights charter, laying out measures to toughen penalties and tighten loopholes around traveller compensation as well as streamline the complaints process as a whole.

The Canadian Press

12:30 p.m.

U.S. auto workers’ strike enters fourth day with no sign of deal

United Auto Workers members strike at the Ford Michigan Assembly Plant over the weekend in in Wayne, Michigan.
United Auto Workers members strike at the Ford Michigan Assembly Plant over the weekend in in Wayne, Michigan. Photo by Bill Pugliano/Getty Images

The United Auto Workers’ strike against Detroit’s Big Three went into its fourth day today with no signs of an early breakthrough and against the threat that the walkout could soon spread.

In a sign of the potential economic and political of a long strike, President Joe Biden is sending two top administration officials to Detroit this week to meet with both sides.

UAW President Shawn Fain said Monday that the Biden administration won’t broker a deal.

“This is our battle. Our members are out there manning the picket lines,” Fain said on MSNBC. “This battle is not about the president, it’s not about the former president.”

Rather than launching an all-out strike of its 146,000 members, the union opted to target three factories — one at each company.

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A key feature of the strategy is the threat of escalating the strike if the union is unhappy with the pace of bargaining. On Friday, Fain said more factories could be targeted: “It could be in a day, it could be in a week.”

Meanwhile, Canadian auto workers and Ford Motor Co are facing at strike deadline at midnight tonight.

The Associated Press

12 p.m.

Midday markets: TSX down as U.S. drifts higher

The TSX is down more than 150 points at midday led by losses in technology and base metals while U.S. stocks drifted higher ahead of the U.S. Federal Reserve’s rate decision Wednesday.

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Financial Post

10:40 a.m.

Big grocers summoned to Ottawa over food prices

Grocers have been threatened with new tax measures if they couldn't work with the federal government to come up with a plan to address Canada's food inflation crisis.
Grocers have been threatened with new tax measures if they couldn’t work with the federal government to come up with a plan to address Canada’s food inflation crisis. Photo by Getty Images

The CEOs of Canada’s top grocers have been summoned to Ottawa today to come up with a plan to address Canada’s food inflation crisis.

Industry minister François-Philippe Champagne called the meeting after Prime Minister Justin Trudeau threatened the big grocers with new tax measures if they couldn’t work with government to find a solution to high food prices.

The Financial Post’s Jake Edmiston fills us on what the meeting is about and what it is likely to accomplish.

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9:30 a.m.

Stock markets are open

Canada’s main stock index opened in the red this morning, but it’s a mixed bag of gains and losses on Wall Street.

The S&P/TSX composite index was down 72.40 points to 20,549.94 in early morning trading.

In the U.S., the S&P 500 was down 1.57 points to 4,448.75. The Dow was up 39.91 points to 34,657.85 and the Nasdaq was down 10.02 points to 13,698.31.

9:15 a.m.

Heather Reisman returns as CEO of Indigo

heather reisman
Heather Reisman, founder of Indigo, has returned as the retailer’s CEO. Photo by Kevin Van Paassen/Bloomberg

Indigo Books & Music Inc. says founder Heather Reisman has returned to the retailer as chief executive officer.

She fills the void left by the abrupt resignation of Peter Ruis from the top job earlier this month.

Reisman had served as chief executive until last year, when Ruis took over, and retired from the Indigo board last month.

As part of her return to the company, Reisman was also reappointed to the board.

The retailer also announced that Craig Loudon, Indigo’s chief financial officer, has been appointed chief operating officer.

In his new role, the company says he will continue to act as the chief financial officer and lead the finance team.

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The Canadian Press

8:30 a.m.

Housing starts edge down in August

Construction of a low-rise condo development in Coquitlam, B.C.
Construction of a low-rise condo development in Coquitlam, B.C. Photo by Darryl Dyck/The Canadian Press

Canada Mortgage and Housing Corp. says the annual pace of housing starts in Canada edged down one per cent in August compared with July.

The national housing agency says the seasonally adjusted annual rate of housing starts in August came in at 252,787 units compared with 255,232 in July.

The decrease came as the rate of urban housing starts fell one per cent to 233,075 units in August.

The pace of multi-unit urban starts decreased one per cent to 191,250, while the rate of single-detached urban starts rose two per cent to 41,825.

The annual rate of rural starts was estimated at 19,712.

The six-month moving average of the overall monthly seasonally adjusted annual rate of housing starts was 244,507 units in August, up 0.8 per cent from 242,552 in July.

The Canadian Press

7:30 a.m.

BMO to close retail auto finance business as bad debt mounts

Bank of Montreal signage in Toronto's financial district. The bank will close its retail auto finance business.
Bank of Montreal signage in Toronto’s financial district. Photo by Stephanie Foden/Bloomberg

BMO Financial Group plans to close its retail auto finance business in order to reroute resources, as borrowers dig deep to stay on top of recent interest rate hikes.

The decision will also trigger an unspecified number of layoffs in Canada and the U.S., the Bank of Montreal said.

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It comes after the company’s bad debt provisions more than tripled to $492 million in the quarter ended July 31 compared to a year earlier. In its retail line, the bank’s provisions for credit losses rose 800 per cent to $81 million last quarter from $9 million the year before.

Those dents on the income statement hint at the financial strain facing consumers, who have struggled to cope with a spike in interest rates over the past year and a half.

The higher borrowing costs have begun to slow some lending demand and deal making amid heavy competition among Canadian banks on mortgage rates and wider concerns about a general economic slowdown.

The Bank of Montreal’s indirect retail auto loans segment works with car dealerships to arrange financing for car buyers, who in turn make monthly payments to the lender — the bank. BMO’s commercial banking business, which backs auto dealers through inventory financing, is unrelated to the upcoming shutdown.

“By winding down the indirect retail auto finance business, we have the ability to focus our resources on areas where we believe our competitive positioning is strongest,” BMO Financial Group spokesman Jeff Roman said in a statement.

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Read the full story here.

Stock markets: Before the bell

Stock chart, September 18, 2023

United States stock futures are fluctuating this morning after a sell-off on Friday and after oil neared $95 a barrel.

In Europe and Asia, equities dropped sharply, mirroring the decline that took the S&P 500 down more than one per cent at the end of last week. Societe Generale SA slumped as much as 11 per cent after cutting profitability targets. Apple Inc. gained in U.S.premarket trading, with analysts positive about early signs of demand for the latest iPhone.

What to watch today

The 24th World Petroleum Congress kicks off in Calgary today and runs until Sept. 21.

Hundreds of executives and government officials from oil-producing nations around the world are gathering in Calgary this week, against the backdrop of growing global pressure to reduce greenhouse gas emissions.

The World Petroleum Congress, one of the largest oil-and-gas conferences in the world, has not been held in Canada since 2000. It will count among its attendees heavyweights such as Exxon Mobil Corp. chief executive Darren Woods, Repsol S.A. CEO Josu Jon Imaz and Amin Nasser, the CEO of Saudi Aramco, the world’s largest oil company.

Today is also the deadline for contracts between Unifor and the Detroit Three automakers to expire. Contracts are up at Monday at 11:59 p.m.

Additional reporting by The Canadian Press, Associated Press and Bloomberg

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