Canada’s unemployment rate jumped to its highest level since January 2017, bolstering bets for another outsized interest-rate cut at the next Bank of Canada policy meeting.Nathan Denette/The Canadian Press
Getting caught up on a week that got away? Here’s your weekly digest of the Globe’s most essential business and investing stories, with insights and analysis from the pros, stock tips, portfolio strategies and more.
Canada’s unemployment rate jumps to multiyear-high
Canada’s unemployment rate jumped to its highest level since January 2017, bolstering bets that the Bank of Canada will announce another outsized interest-rate cut at its policy meeting next week, Matt Lundy reports. The unemployment rate jumped to 6.8 per cent in November, Statistics Canada said in a report, and was 6.5 per cent in October. But it was also a robust month for hiring. The economy added close to 51,000 jobs in November – roughly double analyst expectations. As of Friday morning, swaps markets were placing an 83-per-cent chance that the BoC opts for larger than a 50-basis-point move next week.
Canada Post strike enters fourth week after union sends counter-proposals to mediator
Canada Post and the union representing more than 55,000 striking workers appear closer to resuming negotiations as the strike enters its fourth week. The Canadian Union of Postal Workers said it sent new counter-proposals to the mediator in the hopes that talks can resume. Canada Post said it’s reviewing them. The federal mediation was temporarily suspended last week because both sides remained “too far apart” on critical issues. Meanwhile, Purolator and UPS have paused shipments from some courier companies as they try to work through a deluge of deliveries brought on by the strike.
Canada Post employees and supporters rally at Canada Post headquarters in Ottawa, on Nov. 28.Sean Kilpatrick/The Canadian Press
Decoder: Canada’s trade surplus with the U.S. highlights the risk of a new tariff battle
Canada’s trade surplus with its top trading partner, the United States, fell to the lowest it’s been this year, according to Statistics Canada data. In October, Canada exported $6.2-billion more in goods to the United States than it imported from that country. For Canada, that was the smallest trade surplus with the U.S. since mid-2023. (A surplus for Canada is a deficit from the U.S. perspective.) U.S. president-elect Donald Trump, who has long complained about the U.S. trade deficit with Canada, threatened tariffs on exports last month – and the most recent data highlights the risk of a tariff battle. In this week’s Decoder series, Jason Kirby takes a closer look at the numbers.
A breakdown of the big Canadian banks’ fourth-quarter earnings
Canada’s biggest banks reported their fourth-quarter earnings this week, covering the three months that ended Oct. 31. Analysts anticipated that the latest bank earnings will begin the transition out of a year marked by rising loan loss provisions, higher expenses and muted profits. Canadian Imperial Bank of Commerce, Royal Bank of Canada and National Bank of Canada all posted profits that beat analyst estimates. Meanwhile, Toronto-Dominion Bank, Bank of Montreal and Bank of Nova Scotia posted earnings that missed analyst estimates. Perhaps the wildest results came from TD, which pled guilty this fall to conspiracy to commit money laundering and must pay a penalty of more than US$3-billion and address strict requirements to resolve the issues.
Investors have fled preconstruction condos and no one knows when they are coming back
Investors are abandoning preconstruction condos. Can anything bring them back to the market? The waning interest is due to preconstruction condo units no longer soaring in value every year and rent no longer covering the cost of owners’ loan payments and other expenses, Rachelle Younglai reports. Many investors say they have no plans to buy more units, raising questions about whether the market will ever return to its previous strength. Experts predict interest in preconstruction condos will remain weak until they become money makers again – but prices have to come way down, interest rates have to drop further, demand has to increase and rents have to go up.
Construction cranes dot the skyline as condo towers are seen under construction at the Oakridge Park shopping centre redevelopment, in Vancouver, on Nov. 23, 2023.DARRYL DYCK/The Canadian Press
Air Canada to bar carry-on bags, impose seat selection fee for lowest-fare customers
Air Canada announced earlier this week that starting Jan. 3, customers booking an economy basic fare will no longer be entitled to carry-on baggage. Basic fare passengers will have to check duffel bags, rolling suitcases and large backpacks for a fee – $35 for the first, $50 for the second – when travelling to Canada, the U.S. (including Hawaii and Puerto Rico), Mexico, Central America and the Caribbean. Lower-tier customers will also have to pay if they want to change the seat assigned to them at check-in. Finance writer Barry Choi writes that the move is certain to anger travellers but makes sense for Air Canada and its revenue which, of course, is the biggest winner here.
No wild week is complete without more rants from Donald Trump. Who did the U.S. president-elect just threaten with 100 per cent tariffs?
a. Countries that refuse to buy U.S. oil
b. Countries that try to undermine the U.S. dollar
c. Countries with big trade surpluses with the U.S.
d. Countries that send unwanted migrants to the U.S.
b. Countries that try to undermine the U.S. dollar. Mr. Trump said he would levy the 100 per cent tariffs against the nine countries in the BRIC alliance – Brazil, Russia, India, China, South Africa, Egypt, Ethiopia, Iran and the United Arab Emirates – if they tried to introduce a BRIC currency that would allow them to avoid using the U.S. dollar for international transactions.
Get the rest of the questions from the weekly business and investing news quiz here, and prepare for the week ahead with The Globe’s investing calendar.