Top headlines: RCMP launches probe into Ontario housing development scandal
Today’s top headlines
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Yesterday’s investing solutions will not work tomorrow, so here’s some cash-flow options that might
4:35 p.m.
Market close: TSX gains more than 250 points, U.S. stock markets also rise
Canada’s main stock index gained more than 250 points today amid a broad-based rally led by energy stocks, while U.S. markets also rose.
The S&P/TSX composite index closed up 255.13 points at 19,501.20.
In New York, the Dow Jones industrial average was up 134.65 points at 33,739.30. The S&P 500 index was up 22.58 points at 4,358.24, while the Nasdaq composite was up 78.60 points at 13,562.84.
Read more: Here are Tuesday’s top 3 performers on the TSX, including a precious metals newbie
The Canadian Press
4:09 p.m.
RCMP launches probe into Ontario housing development scandal
Canada’s national police force has opened an investigation into the Ontario government’s decision to allow tracts of protected land near Toronto to be used for housing, creating new political pressure for Premier Doug Ford.
The probe comes after Ford’s government removed about 7,400 acres of land from an area known as the Greenbelt, in which development is restricted. The decision immediately made those parcels far more valuable, but a report by the province’s auditor-general found that certain developers had received “preferential treatment” because they enjoyed special access to the housing minister’s chief of staff.
The Royal Canadian Mounted Police’s sensitive and international investigations unit is conducting the probe, the police agency said in an email to Bloomberg News, confirming an earlier report by the Toronto Star. The RCMP didn’t say which people are targets of the investigation, adding that it wouldn’t be providing further updates right now.
The SII unit handles investigations into corruption and criminal allegations involving government officials. A spokesperson for the premier didn’t immediately respond to emailed requests for comment.
The Greenbelt controversy forced the resignation of provincial Housing Minister Steve Clark and his chief of staff. After initially defending the decision, saying it was necessary to help meet the goal of increasing the housing supply, Ford reversed the policy in September, placing the land back under protected status.
Ontario is the largest province with 15.6 million people, 39 per cent of Canada’s population. It has added about 460,000 residents in a year, according to Statistics Canada estimates, contributing to a surge in rents and a rebound in home prices in a number of markets after last year’s slump.
Bloomberg
3:41 p.m.
OSC exploring AI use in capital markets
Ontario’s securities regulator says it is evaluating the potential role it can play in overseeing and guiding responsible adoption of artificial intelligence to protect investors and the integrity of capital markets.
The Ontario Securities Commission’s report released today says use of AI in capital markets is primarily focused on improving the efficiency and accuracy of operations, trade surveillance and detection of market manipulation, and supporting advisory and customer service.
It says AI can improve the ability to gather information and detect patterns, or anomalies from large volumes of data by automating processes normally handled manually — leading to better market forecasting and hedging.
Large firms are also currently using AI to provide automated customer support and help for client-facing advisers, but the report says its use for trading, asset allocation and risk management are so far limited.
The regular warns of major challenges for AI adoption in the sector because of data constraints and the ability to attract and retain AI talent due to competition from tech firms.
It also cites obstacles related to corporate culture, saying market participants may have trouble adapting operating models and culture to benefit from AI, and that issues related to privacy, bias and fairness can play a role.
The Canadian Press
2:25 p.m.
Teck won’t necessarily sell coal assets to highest bid, CEO says
The highest bid for Teck Resources Ltd.’s lucrative coal assets won’t necessarily be the winning bid, said chief executive officer Jonathan Price.
Teck is weighing multiple potential deals for its steelmaking coal unit, as the company seeks to rebrand as a standalone metals producer. The sales process caps a dramatic year for the Canadian miner, after it publicly rejected a takeover attempt by Glencore PLC, and then was forced back to the drawing board on its coal strategy when an earlier split proposal didn’t muster enough shareholder support.
Glencore has since offered about US$8.2 billion to buy only the coal business, which had also drawn interest from Nippon Steel Corp., JSW Steel Ltd. and Canadian mining financier Pierre Lassonde, Bloomberg has previously reported. The company could either sell the entire unit or offload a stake before spinning out the remainder to its own shareholders, Price said in an interview at Bloomberg’s London office Oct. 10.
Teck will consider a range of factors beyond valuation, including execution risk and the environmental track record of prospective buyers for the four coal mines in British Columbia, Price said. He declined to comment on specific bids or the potential outcome of the process, which he hopes to conclude by year end.
Any deal will need to be approved by the Canadian government, which has been adamant that the operator of the coal mines must have a strong environmental track record and a commitment to maintaining the local workforce.
Jacob Lorinc, Bloomberg
1:40 p.m.
Unifor reaches tentative agreement with GM
Less than 24 hours after hitting picket lines, Unifor says it has reached a tentative deal with General Motors Co. in an agreement similar to the one it reached with Ford Motor Co. last month.
Union president Lana Payne says the terms include all of the items the company had pushed back against including pensions, retiree income supports and moving temporary workers into permanent positions.
The new tentative agreement covers almost 4,300 autoworkers at GM’s Oshawa, Ont. assembly plant, St. Catharines, Ont. propulsion plant, and the Woodstock, Ont. parts distribution centre.
Unifor says strike actions that began at midnight are on hold to allow the membership to vote on the tentative agreement.
GM Canada president Marissa West says in a statement that the agreement recognizes the many contributions of team members with significant increases in wages, benefits and job security.
The company says it expects work to resume at its three facilities this afternoon.
The Canadian Press
12:50 p.m.
Food industry leaders launch alliance to champion net zero in agri-food sector
A group of leaders in the agriculture and food industries is launching a national alliance to work toward achieving net zero in Canada’s agri-food sector by 2050.
The Canadian Alliance for Net-Zero Agri-food includes companies such as Royal Bank of Canada, Loblaw Cos. Ltd. and Maple Leaf Foods Inc., as well as organizations like the University of Guelph’s Arrell Food Institute.
In a press release, the alliance says if the agri-food sector continues along its current trajectory, its emissions could reach 196 million tonnes by 2050, representing 19 per cent of Canada’s total emissions.
The alliance’s first two initiatives are focused on advancing climate-smart agriculture and growing a national network to produce biogas.
David Hughes, chief executive of non-profit The Natural Step Canada, says in the press release that Canada is primed to become a ’global beacon of sustainable agriculture.’
The alliance says it’s aiming to advance technology, policy, infrastructure and funding needed to help the agri-food sector work toward net zero.
The Canadian Press
12:28 p.m.
Former Bank of Canada governor Mark Carney attacks Rishi Sunak’s green policies reversal
Former Bank of Canada governor Mark Carney has accused Rishi Sunak of questionable economics over his decision to postpone environmental measures and start drilling for oil in the North Sea.
Speaking to The Policy Institute at King’s College London, Carney said the U.K. prime minister’s plans to delay a ban on new petrol and diesel vehicles was “disappointing” and that the new stance on climate action may deter investment in the U.K.
Approving a drilling licence for the Rosebank oil field and promising more “can be called into question from an economic perspective, let alone an environmental one,” he added.
Carney, the United Nations special envoy on climate action, has led global efforts to bring financial markets into the campaign for net zero since he was at the Bank Of England between 2013 and 2020.
The U.K. was a leading nation in “forging a consensus around net zero,” Carney said. “The government has now fallen back a bit.”
In the last month, Sunak has pushed a ban on new combustion engine cars from 2030 to 2035, postponed requirements for landlords and homeowners to insulate their properties and upgrade boilers, and has promised hundreds of new licences to drill for oil in the North Sea.
Carney suggested that the government’s new stance could hurt business investment in the U.K.
“What I find when speaking to companies is their first question is: Am I getting clean power? If you start throwing that into doubt it becomes a much more difficult discussion,” he told The Policy Institute. “The U.K. was in that camp, now it’s blurred around it.”
On the delays to petrol car bans and insulation, he said: “What was disappointing is the government said we are not going to do certain things but they didn’t swap in alternative.”
Doing so makes it look like the green transition is a trade-off when Sunak’s renewed commitment to net zero by 2050 makes clear it isn’t. Creating the appearance of a trade-off focuses attention on visible prices, which complicates the challenge.
Sunak’s reversal was a wasted opportunity because “if you are credible and make a credible forward commitment the markets do most of the work for you,” Carney said. “There was little weight given in the communication of that.”
Drilling new wells in the North Sea makes no sense because the world will hit peak oil this decade according to the International Energy Agency, he said.
That will leave the U.K. with a “stranded assets problem” when the rigs will have to be decommissioned, which raises questions about “the wisdom of exploring new fields.”
Philip Aldrick, Bloomberg
12:06 p.m.
Midday markets: TSX up nearly 300 points, U.S. stock markets also higher
Canada’s main stock index was up nearly 300 points in late-morning trading as gains in energy stocks helped lead a broad-based rally and U.S. stock markets also pushed higher.
The S&P/TSX composite index was up 293.78 points at 19,539.85.
In New York, the Dow Jones industrial average was up 230.36 points at 33,835.01. The S&P 500 index was up 41.45 points at 4,377.11, while the Nasdaq composite was up 154.86 points at 13,639.10.
The Canadian Press
10:15 a.m.
TD Bank hit with proposed class action over employee pay
A proposed class action lawsuit alleging unpaid vacation and holiday pay has been filed against Toronto-Dominion Bank in an Ontario court.
The lawsuit, served to TD on Oct. 6, alleges the bank failed to properly pay vacation or public holiday pay on top of the set commissions and other non-salary compensation earned by more than 1,000 of its mobile mortgage specialists over various years.
The statement of claim seeks total damages of up to $500 million. The allegations in the claim have not been tested or proven in court.
Toronto-based lawyers from Roy O’Connor LLP, Cavalluzzo LLP and Whitten & Lublin PC are representing lead plaintiff Jason Chiang, a mobile mortgage specialist who spent nearly 13 years working for TD in Vancouver.
“We will be bringing a motion to request that this case be certified for this class of employees and, if it is certified, a court will subsequently consider and evaluate the issues alleged in the claim,” the lawyers said in a press release Oct. 10.
The team of lawyers had previously settled a similar class-action lawsuit filed in 2007 against Canadian Imperial Bank of Commerce alleging systemic unpaid overtime of retail branch employees.
On Jan. 5, CIBC agreed to pay out a total of $153 million to compensate about 30,000 current and former front-line retail staff for alleged unpaid overtime, lawyers involved in the settlement said. The amount included legal fees and the cost of distributing the settlement funds.
Denise Paglinawan, Financial Post
10 a.m.
Stock markets are open: TSX, U.S. stocks head higher
North American stock markets are following global markets higher at the opening bell on some potentially encouraging news about interest rates, which have been dragging markets lower since the summer.
In Canada, the S&P/TSX composite index jumped 210.60 points to 19,456.67 at 10 a.m.
On Wall Street, the S&P 500 was up 17.47 points to 4,353.13, the Dow Jones industrial was up 68.61 points to 33,673.26 and the Nasdaq rose 67.63 points to 13,551.87.
The Associated Press, Financial Post
9:30 a.m.
Scotiabank, Sun Life reach deal to let wealthy clients invest in private credit
Bank of Nova Scotia is partnering with Sun Life Financial Inc.’s asset-management division to give the lender’s affluent clients in Canada the chance to tap into private credit and other alternative assets growing in popularity.
Under the arrangement, Scotiabank’s Canadian high-net-worth clients will gain access to alternative investments in real estate, private credit and infrastructure through Sun Life’s SLC Management, which has about $361 billion in assets. SLC Management is also committing to invest $100 million in seed capital for future funding opportunities.
The partnership is the latest example of banks finding ways to break into the hot market for private-credit investments. Last month, Wells Fargo & Co. teamed up with Centerbridge Partners on a private-debt fund targeting at least US$5 billion, Societe Generale SA announced a partnership with Brookfield Asset Management Ltd. and Deutsche Bank AG launched a new investment manager focused on private-credit opportunities.
“Once the domain of the most sophisticated institutional investors, private alternative investments have been increasingly sought after for their important role in enhancing portfolio diversification and risk-adjusted returns,” Glen Gowland, Scotiabank’s group head of global wealth management, said in a statement.
Banks are also on the hunt for greater fees from high-net-worth clients as they face uncertain revenue streams in other businesses, such as trading. Scotiabank chief executive Scott Thomson said at a conference in September that he wants to “double down” on the lender’s wealth-management business. It’s the third-largest in Canada, with $631 billion in assets under administration globally as of July 31, but it lacks a United States presence, unlike its other large domestic competitors.
Thomson, who took over as CEO in February and plans to unveil a refreshed strategy for the bank in December, recently hired Royal Bank of Canada executive Jacqui Allard to lead Scotiabank’s wealth-management business. She will take over at the beginning of the year from Gowland, who will move to a vice-chair role.
Christine Dobby, Bloomberg
7:30 a.m.
IMF cuts global growth on high interest rates, geopolitical rifts
The world economy has lost momentum from the impact of higher interest rates, the invasion of Ukraine and widening geopolitical rifts, and it now faces new uncertainty from the war between Israel and Hamas militants, the International Monetary Fund warned Tuesday.
The IMF said it expects global economic growth to slow to 2.9 per cent in 2024 from an expected three per cent this year. The forecast for next year is down a notch from the three per cent it predicted back in July.
It also dropped its growth projection for Canada’s economy to 1.3 per cent for 2023, off from its earlier projections of 1.7 per cent in July and 1.5 per cent in April. But the IMF also boosted its Canadian outlook for 2024 to 1.6 per cent, up from 1.4 per cent in July and 1.5 per cent in April. Both are down from the 3.4 per cent growth Canada experienced in 2022.
By comparison, the United States economy is now expected to grow 2.1 per cent this year and 1.5 per cent in 2024, both of which are higher than the IMF’s earlier projections. Overall, the world’s advanced economies are expected to grow 1.5 per cent in 2023 and 1.4 per cent in 2024. “About 90 per cent of advanced economies are projected to see lower growth in 2023,” the IMF said in its World Economic Outlook released Oct. 10.
The deceleration comes at a time when the world has yet to fully mend from a devastating but short-lived COVID-19 recession in 2020 and now could see fallout from the Middle East conflict, particularly to oil prices.
A series of previous shocks, including the pandemic and Russia’s war in Ukraine, has slashed worldwide economic output by about US$3.7 trillion over the past three years compared with pre-COVID trends.
“The global economy is limping along, not sprinting,” IMF chief economist Pierre-Olivier Gourinchas said at a news conference during the organization’s annual meeting in Marrakech, Morocco.
The IMF expectation of three per cent growth this year is down from 3.5 per cent in 2022 but unchanged from its July projections.
So far, the world economy has displayed “remarkable resiliency,” Gourinchas said, at a time when the United States Federal Reserve and other central banks worldwide have aggressively raised interest rates to combat a resurgence in inflation.
The hikes have helped ease price pressures without putting many people out of work. That combination, he said, is “increasingly consistent” with a so-called soft landing — the idea that inflation can be contained without causing a recession.
The IMF sees global consumer price inflation dropping from 8.7 per cent in 2022 to 6.9 per cent this year and 5.8 per cent in 2024.
The Associated Press
Unifor workers kick off strike at GM plants
Unifor workers have kicked off strike action at General Motors Co.
In a message on the union’s website, Unifor national president, Lana Payne says the bargaining team announced the move, affecting all unionized GM members at the Oshawa Assembly Complex and CCA Stamped Products, the St. Catharines Powertrain Plant and the Woodstock Parts Distribution Centre.
Her statement goes on to blame the strike on the company’s unwillingness to agree on the union’s pattern-bargaining demands on pensions and other supports for those retiring. She says there are also unresolved differences when it comes to making sure temporary part-time workers are given a clear path to permanent employment.
The strike includes approximately 4,280 autoworkers from Locals 222, 199 and 636.
Unifor Local 88 members at the CAMI Assembly Plant in Ingersoll, Ontario are covered by a separate collective agreement and will continue operations.
Officials say its members will remain on strike until the union’s pattern agreement, as established in the ratified collective agreement with Ford Motor Co. of Canada, is met.
General Motors issued an early morning statement via social media, saying “While we have made very positive progress on several key priorities, we are disappointed that we were not able to achieve a new collective agreement.” The statement also notes GM’s willingness to stay at the bargaining table.
The Canadian Press
Stock markets: Before the opening bell
Shares climbed Tuesday in Europe and Asia after Wall Street advanced on potentially encouraging news about interest rates, which have been dragging markets lower since the summer.
Fuelled by optimism over a respite from rising interest rates, Germany’s DAX jumped 1.6 per cent to 15,375.23 and the CAC 40 in Paris was up 1.4 per cent to 7,117.90. Britain’s FTSE 100 gained 1.5 per cent to 7,604.40.
The futures for the S&P 500 and the Dow Jones industrial average edged 0.2 per cent higher. On Monday, the S&P 500 gained 0.6 per cent, flipping from losses to gains after two United States Federal Reserve officials suggested interest rates might remain steady at their next policy meeting because a jump in longer-term bond yields may be helping to cool inflation without further market-rattling hikes by the Fed.
The Dow gained 0.6 per cent and the Nasdaq composite climbed 0.4 per cent.
In Canada, the S&P/TSX composite index closed up 108.26 points at 19,246.07 on Friday. Markets were closed for the Thanksgiving holiday on Monday. Find out last week’s top three performers here.
The Associated Press
What to watch today
MTY Food Group will release its earnings results this morning.
The United States will release data on wholesale trade for August.
Need a refresher on Friday’s top headlines? Get caught up here.
Additional reporting by The Canadian Press, Associated Press and Bloomberg
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