Good morning! Shari Kulha catching you up on the business news we’re keeping on top of today. While the angst over Trump’s tariffs died down in most places, steel towns were still jumpy; Bombardier Aerospace lost 1% on the markets after two deadly aircraft crashes over the past couple of days; and Aurora Cannabis and Canopy Growth rose 2.82% and 4.98% respectively. On to the major stories:
If B.C. pushes through its speculation tax, many out-of-province second-home owners might rush to sell. Geoffrey Morgan reports that many in Alberta and Saskatchewan own homes in B.C. and are waiting with “fear and uncertainty” to see what transpires. B.C. expects the tax will apply to about 15,000 residences — those that aren’t lived in by the owners or aren’t rented out.
Quote: LandQuest Realty Corp. president Richard Osborne said buyers are laying low right now — and that the new tax will also impact business at wineries, salmon fishing outfits and ski resorts. “It’s like Saskatchewan putting (poison) on all their fields.”
Canada’s debt is being watched closely by central bankers at home and abroad, Geoff Zochodne reports. Equifax Canada said consumers owed $1.821 trillion as of the fourth quarter of 2017, a new high. That figure came a day after the Bank for International Settlements posted early warning signs of a banking crisis in three jurisdictions: Canada, China and Hong Kong.
Bottom line: Equifax’s 90-day delinquency rate fell 6.4% year-over-year, as consumer bankruptcies dropped 1.7%, indicating we’re managing to hold our own for now. BIS said Canada’s credit-to-GDP gap and debt-to-service ratio were “flashing red” under the group’s colour-coded scheme, but added that the report isn’t “a definitive warning,” just a first step toward a broader study.
Shares of Cara Operations, the country’s biggest restaurant company, leapt 12% yesterday, after reporting higher-than-expected fourth-quarter and annual sales at its 1,272 restaurants, Hollie Shaw reports. The owner of Swiss Chalet, Milestones and The Keg has been on a spending spree in an industry mired in a decade-long slump, by renovating or closing underperforming locations and opening new ones. “They have also been reinvesting in very intelligent use of smart marketing,” an observer noted.
Bottom line: Bucking the trend in its overall dining category, Cara “appears to be in the early stages of a turnaround,” a BMO analyst said in a research note, upgrading the shares to outperform from market perform.
After a strong rally over the past eight months, oil may dip below US$60 a barrel again, ING Groep NV says. The U.S. is shipping increasingly more oil to Asia — the Middle East’s go-to market — which could undermine the OPEC output deal. Demand is high enough that the Saudi state oil company considered going behind OPEC and its allies’ backs and shipping to Asia via a U.S. subsidiary. U.S. crude shipments will soar to almost four million barrels a day by the mid-2020s, rivalling shipments from Iraq and Canada.
Quote: Asia is “a market the Middle East does not really want to give up,” ING said. “Compliance is likely to slip. The deal will still officially be in place, but once we get into 2019 there’s no chance we will see some sort of deal.”
Yesterday François-Philippe Champagne, who refers to himself as Canada’s “chief marketing officer,” launched Investment in Canada, an agency aiming to convince global companies to set up their next office or plant here. As Kevin Carmichael writes, Canada lacked a one-stop shop for global investors, one reason we rarely attracted foreign cash despite consistently ranking as one of the world’s better places to do business.
Bottom line: Foreign direct investment was $34 billion in 2017, the lowest since 2010, even as GDP grew 3%. So a new bureaucratic unit and a couple of dozen additional trade commissioners will be added, at the cost of $218 million over five years.