Equifax Canada exploring use of payday loan data in credit score calculation

The Canadian Press

Equifax Canada says it's exploring how using payday loan data could affect people's credit scores.

The agency says including data sources that aren't traditionally used to calculate credit scores could help paint a more complete picture of consumers' credit health. 

Equifax says this could improve credit scores for consumers with "responsive repayment of payday loans," potentially leading to better loan terms and interest rates for those customers as they seek to rebuild their credit. 

Last month, Equifax said it was exploring the use of rental data in calculating credit scores, adding that including "alternative data" could establish or enhance the credit scores for millions of Canadians. 

The federal budget called on banks, fintechs and credit bureaus to prioritize launching tools that would allow renters to opt in to reporting their rent payment history

The government says this could help more renters become homeowners by strengthening their credit scores if they have a history of on-time rental payments. 

This report by The Canadian Press was first published May 17, 2024.

 

 

Bank chief executives summoned to House of Commons environment committee

The Canadian Press

A parliamentary committee has summoned Canada's big five bank CEOs to talk about the environmental and climate impacts of the financial system.

The House of Commons environment committee has set a date of June 13 for the chief executives of RBC, TD Bank, CIBC, BMO and Scotiabank to appear, according to meeting minutes. 

A summons, similar to a subpoena, is generally used to compel attendance when invitations to appear are declined.

RBC, BMO, CIBC and Scotiabank all confirmed that their chief executives will attend the committee meeting, while TD did not immediately respond to a request for comment. 

The banks have faced scrutiny for their lending practices and environmental track record, including the hundreds of billions of dollars in funding they've provided to fossil fuel companies in recent years. 

Banks have made both short and long-term emission reduction targets, but face criticism for not moving fast enough. 

This report by The Canadian Press was first published May 17, 2024.

 

CMHC says regulations, 'fragmented' construction sector weigh on housing starts

The Canadian Press

A study by Canada's national housing agency says housing starts aren’t keeping pace with available residential construction resources due to restrictive regulations and a "highly fragmented" industry.

In an analysis published Thursday, Mathieu Laberge, Canada Mortgage and Housing Corp. senior vice-president of housing economics and insights, said Canada has the potential to build more than 400,000 homes per year — around two-thirds higher than the 240,267 housing starts last year.

That's based on a calculation of housing start potential for 2023 had it reflected the level of construction labour productivity of the early 2000s. It also reflects a scenario where the national rate of housing starts equalled that of the most productive major cities — Calgary, Edmonton and Vancouver.

"We could build, actually, a lot more based on what we used to do before, or based on what is being done right now in the best performing cities across the country in terms of housing starts," Laberge said in an interview.

He said those calculations even account for Canada's growing construction labour shortage, noting there were roughly 650,000 workers building homes in Canada in 2023, which is "the most we’ve ever seen."

Earlier this year, the shortage was cited by CMHC in its housing supply report as one of three main factors contributing to longer construction times.

"If you look 20 years ago, we built housing starts with a lot less labour, and so that begs the question: why? I haven't heard a compelling response to that," said Laberge.

"We need to get into why, from the early 2000s to early 2010s, were we able to build ... the same level of housing starts with a lot less labour than now."

Laberge proposes regulatory reform, particularly at the municipal level, as one solution to increasing productivity. He said rules around permit delivery, how many storeys and units a building can contain and development charges stand in the way of further development in many regions.

Some regions have seen movement on that front. Laberge's study points to zoning reforms introduced by the B.C. government, to be implemented by municipalities, allowing for more density.

"What we see is the highest performers in that ratio are also those that have the more flexible regulation," he said.

"When it comes to permitting process, that plays a big role. When it comes to densification and zoning, it plays a big role. When it comes to development charges, it plays a big role."

He also argues industry consolidation could help build homes more efficiently, with 69 per cent of construction businesses currently having fewer than five employees.

Fragmentation in the Canadian residential construction sector is more apparent in some regions of the country, according to the agency. It said low market consolidation hinders investment in research and development, efficient recruitment, training, resource allocation and project management.

The report said consolidation could help generate economies of scale and enable some production savings to be passed on to Canadians.

The federal government unveiled a plan last month to build 3.87 million new homes by 2031.

It said provinces, territories and municipalities will also need to step up, dubbing the plan a “call to action" for various levels of government to work together and create incentives that will spur housing development.

Laberge said that goal remains possible but it will require changes, like those he recommends, to happen soon.

"Structural changes take time," he said.

"What we need is for the structural changes to occur now, so that down the road, we get to a point where we need to be."

This report by The Canadian Press was first published May 16, 2024.

 

Hard-working fire crews, rain help keep Fort McMurray wildfire from growing

Bob Weber, The Canadian Press

Every day since a wildfire began menacing the city of Fort McMurray, Alta., grimy, exhausted firefighters have been spilling out of helicopters at the end of another one of the toughest shifts around.

Hard, manual labour?

"Yes," said Gavin Hojka, incident commander in charge of 172 wildland firefighters. "Very."

There is no road access to the front lines of the fire, which did not grow Thursday thanks to cool, damp weather and the hard work of the crews.

Teams of between eight and 20 are dropped off by helicopters early each the morning. They make their way on foot to the flames carrying pumps, chainsaws, shovels, axes and hoses — lots and lots of hoses.

"They'll be bringing a dozen boxes of hose for the day," Hojka said. 

"Every single day we're bringing out more hose. There are thousands and thousands of feet of hose."

Each box of hose weighs about 27 kilograms. The pumps that fill them weigh about 30 kilograms, carried on someone's back to the nearest beaver pond, stream or river. 

With water and hand tools they attack the fire for between 12 and 14 hours at a stretch, fuelled only by the bag lunch in their packs. Then the helicopter comes to pick them up for a little rest before they're back at it.

"We do everything we can to bring them home at night," said Hojka. "We make sure we have someone flying around in a helicopter being an eye in the sky, a lookout."

Still, the fire remained out of control and about 6,600 residents of the oilsands hub remained out of their homes. 

Neighbourhoods such as Beacon Hill and Grayling Terrace were deserted Thursday, garbage cans lined up neatly on driveways beside cars, trucks and ATVs. Police, emergency workers and birds were the only ones around.   

In Grayling Terrace, crews were setting up sprinklers capable of spraying 600 litres of water a minute on trees and bush near the homes. In Beacon Hill, young poplars near homes were sprayed a deep shade of orange from fire retardant — a portion of the 168,000 litres of the phosphate-based chemical that's been sprayed around the city. 

Still, the fire remained about 200 square kilometres in size and just under six kilometres from Fort McMurray's southern outskirts. Despite the favourable weather, evacuees aren't expected to be allowed back until after the long weekend.

The city's court system was temporarily shut down and schools were closed. 

Thousands of residents fled the city on Tuesday, fearing a repeat of the 2016 wildfire that forced out the entire community and torched more than 2,400 homes.

But the city was slowly coming back to as normal as possible. 

Grocery stores were open and well stocked, with an abundance of toilet paper. Restaurants, many of which closed Tuesday, reopened.

"We closed down for the initial day, just so all of our staff could look after their families," said Shelby Thompson of Montana's BBQ and Bar. 

"We opened the next day," Thompson said. "Regular hours."

At the city's Peter Pond Mall, there was initial confusion about Tuesday's evacuation order and stores shut their doors, said Shauna Hannam, the mall's specialty leasing manager.

Many employees, fearing a 2016 rerun, "rushed to get ahead of the game," she said. 

"For a lot of people, it was history repeating itself: 'I'm just going to get my family out of here right now.'

"The next day, when half the city wasn't evacuated, that's when the confusion set in. People weren't sure whether they were going to work."

Slowly, they are. Hannam said more than half the mall's stores were open Thursday.

Other fires across Western Canada have also forced residents out of their homes.

In northern British Columbia, a blaze threatening Fort Nelson was about 120 square kilometres in size but heading away from the town. The community of 4,700 remained under an evacuation order.

Rob Fraser, the mayor of the Northern Rockies Regional Municipality, said some structures were damaged on rural properties outside Fort Nelson. He did not say how many or if they included homes.

Cooler temperatures and higher humidity were expected to help firefighters over the coming days. Fraser said there was no timeline for when evacuees might return.

"We don't want to be in that situation where we turn people back to the community and three days later we just send them out again," Fraser said. "That would be just a nightmare." 

In Manitoba, 675 people have been forced out of the area in and around the northwestern community of Cranberry Portage. There was no word on when they might be able to return.

The province said the fire remained less than two kilometres from the community. Power and phone service have been restored.

This report by The Canadian Press was first published May 17, 2024.

 

Canada is exploring higher tariffs on Chinese EVs, trade minister says

Brian Platt, Bloomberg News

Canada is examining whether it needs to raise tariffs on Chinese-made electric vehicles after the White House announced major new levies on them, Trade Minister Mary Ng said.

“We are looking at this very carefully and we have an open dialogue with our American partners,” Ng said in a phone interview from Peru, where she’s attending meetings of the Asia-Pacific Economic Cooperation forum.

The Biden administration announced sweeping new tariffs against China this week, targeting semiconductors, solar cells and other products. The new U.S. tariff on Chinese-manufactured electric vehicles will take effect this year, with a final tariff rate of 102.5 per cent, up from 27.5 per cent. 

Canada imposes a small tariff of about 6 per cent on Chinese vehicles. Asked whether it may need to align its own tariffs with the U.S., Ng said again the government is speaking with U.S. officials about the policy, “and we are absolutely looking at this.”

Ng stressed that Canada’s main focus is on producing electric vehicles domestically. She pointed to agreements that Prime Minister Justin Trudeau’s government has signed with automakers such as Honda Motor Co. and Volkswagen AG to make electric vehicles, batteries or components in Ontario, Canada’s most populous province.

The country’s auto sector is highly integrated with U.S. vehicle makers; parts and finished cars and trucks flow easily across the border between Ontario and key U.S. manufacturing states such as Michigan and Ohio. 

Chinese factories have a very small share of Canada’s auto market, but the country has recently witnessed a surge of imports of Chinese-made Tesla Inc. models manufactured in Shanghai. 

The number of cars arriving from China at the port of Vancouver rose more than fivefold last year, to about 44,400, after Elon Musk’s automaker started shipping Model Y vehicles from there.

If Canada follows U.S. lead on Chinese EV tariffs, impact could be huge

Kristian Koschany, BNN Bloomberg

In a strategic election-year manoeuvre, U.S. President Joe Biden has introduced substantial tariff increases on various Chinese goods, aiming to strengthen domestic production in crucial sectors. This initiative, designed to shield American labour and businesses from what Biden deems unfair practices such as theft and dumping of under-priced goods, nearly quadruples tariffs on Chinese electric vehicles (EVs) and extends tariffs to semiconductors, batteries, solar cells, and critical minerals.

According to the White House, these amendments will affect approximately US$18 billion of annual imports. Biden described these tactics by China as not merely competitive but outright cheating, highlighting the detrimental impacts they've had on the American economy. The move aims to safeguard the burgeoning U.S. EV sector from competitive pressures posed by Chinese manufacturers.

“We do not have first mover advantage; the Chinese are so far ahead of everybody,” says Ian Lee, associate professor of management at the Sprott School of Business at Carleton University. “And [according to the International Energy Agency], they have 60 per cent world market share of EVs. They are so far ahead of the U.S. and Canada it's not funny.”

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The Biden administration is also intensifying its scrutiny of Chinese automotive companies in Mexico as concerns grow that China may find ways to bypass the new tariffs.

The U.S. Trade Representative, Katherine Tai, indicated that the government is vigilant about Chinese efforts to establish manufacturing bases in Mexico, which could serve as a backdoor for Chinese EVs into the U.S. market.

Adding to the complexity, BYD Co., a leading Chinese EV manufacturer, this week revealed ongoing negotiations to build an EV plant in Mexico, with plans to finalize the location by year-end. This development follows the introduction of BYD's first truck in Mexico, marking a significant step in the company's expansion strategy in the region.

Could Canada and other countries follow suit?

German Chancellor Olaf Scholz and Swedish Prime Minister Ulf Kristersson have cautioned the European Union against emulating the United States' approach of imposing import duties on Chinese electric vehicles (EVs). Speaking at a joint press conference in Stockholm on Tuesday, Kristersson emphasised the importance of global trade and warned against the repercussions of a broader trade war.

“It is fundamentally a bad idea to dismantle global trade,” Kristersson said when questioned about potential EU tariffs on Chinese cars. He acknowledged the need for a level playing field and recognised the potential for disruptions in sourcing, but stressed that blocking each other’s products is not conducive for industrial nations like Germany and Sweden.

• Top commodities headlines, all in one place

Chancellor Scholz echoed these sentiments, highlighting the collaborative efforts between Germany and Sweden in advancing energy transitions, particularly in wind and hydrogen power, and expanding their innovation partnership in defence and space.

Major impact

Ian Lee cautions that were Canada to impose similar tariffs, it would have some fairly negative repercussions. “If Canada was to follow suit and put tariffs on, it would make EVs unaffordable for most people except for perhaps the top 20 per cent of the population. And so I think that there's going to be a political blowback if they went down that road.”

The Government of Canada is aiming to phase out the sale of new combustion vehicles by 2035 – requiring zero-emission vehicles to make up all new car sales in their place. To that end, the federal government and several provincial governments have been striving to secure a share of the North American EV market for Canada. They have already pledged substantial funds to attract other manufacturers, including Honda Motor Co. and Stellantis NV, to build out their EV supply chain in this country.

Imposing tariffs, according to Mr Lee, could prevent that goal from being met. “If we want to get to 100 per cent and the Americans are blocking Chinese EVs coming in to the United States, we're going to have to import them directly from China to meet that target, or we're going to have to extent reduce the aggressiveness of that target of 100 per cent EV [sales] by 2035 to allow domestic North American industry to build up and respond ... there's some very tough trade off decisions that will have to be made.”

Chinese-made Teslas pour into Canada as Biden erects U.S. tariff wall

Monique Mulima and Thomas Seal, Bloomberg News

The Biden administration is quadrupling U.S. tariffs on electric vehicles manufactured in China. But Chinese-made cars are still finding their way into a receptive North American market — just to the north. 

Canada is seeing a surge of imports of Chinese-made EVs, particularly Tesla Inc. models made in Shanghai. The number of cars arriving from China at the port of Vancouver rose more than fivefold last year, to 44,400, after Elon Musk’s automaker started shipping Model Y vehicles made there.

The situation is drawing howls of protest from some auto-industry players who want Prime Minister Justin Trudeau to follow the White House and do more to protect the domestic industry.

Canada imposes only a small tariff on Chinese-made vehicles — about six per cent. It also allows consumers to tap a federal rebate program when they buy foreign-manufactured EVs. Since Tesla started exporting from its Shanghai factory last year, many purchasers have begun using that incentive.  

“Here you can buy a Tesla made in Shanghai and get a $5,000 purchase incentive that is funded by Canadian taxpayers — including the Canadian companies who are competing with Tesla for that vehicle purchase,” Flavio Volpe, president of Canada’s Automotive Parts Manufacturers’ Association, said in an interview. 

“We’ve raised this publicly, we’ve raised it privately, everything short of yelling at the moon from the top of a mountain to get somebody to close that door,” he said. “And it’s wide open. It’s noticed in the U.S.”

Officials with Canada’s transportation department did not reply to requests for comment. 

Three of every 10 EVs buyers requesting Canada’s federal rebate in the year ended March 31 bought a Tesla, according to data from Transport Canada — totaling some 51,000 cars. Some provincial governments, such as British Columbia, offer additional rebates worth thousands more dollars to EV buyers.

Canada remains a relatively nascent market for Chinese-made vehicles compared with Mexico, where companies including BYD Co. and Anhui Jianghuai Automobile Group Co. have made huge inroads over the past decade with relatively cheap cars. Among Asian countries exporting EVs into Canada, Japan and Korea still dominate. 

And, as in the U.S., electric vehicles remain a relatively small part of the Canadian auto market. Canadians registered about 185,000 battery electric and plug-in hybrid electric vehicles last year — an increase of nearly 50 per cent from the year before, but still only 11 per cent of all new vehicle registrations.

The subsidies for purchasers are an attempt to drive that number higher. Trudeau’s government has set an ambitious target — 60 per cent of all new light-duty vehicles sold in the country should be zero-emission by 2030, the government says, and 100 per cent by 2035. 

Volpe and others say that’s too aggressive, and that Canada’s goals should align more closely with the U.S. The Biden administration’s recent auto-emissions rules would potentially boost battery electric vehicles to more than 50 per cent of the market by 2032, according to modeling from the U.S. Environmental Protection Agency.

Teslas sold in Canada come from Shanghai or Fremont, California, according to the company’s Canadian sales center. The company declined to comment how many vehicles exported to Canada originated at each plant. Customers can request the manufacturing location from the company, or find it with their vehicle identification number.

Canadian car dealers have started to see a growing number of Teslas manufactured in China appearing on the used car market, too, according to Huw Williams, a lobbyist for the Canadian Automobile Dealers Association. He expects that the disparity between Canadian and U.S. policy will grow in importance. 

“A legitimate question for Canadian policymakers to address is how the Biden announcement and how some of the influx of products from overseas — which countries it’s coming from — affects the Canadian mix,” Williams said. “I think you’re going to see more and more attention paid to that issue here in Canada as a result.”

 

One oil cargo's odd journey highlights global market strains

Sharon Cho and Lucia Kassai, Bloomberg News

A dearth of heavy crude is forcing one of the world’s biggest buyers to go the extra mile to get the barrels it needs, offering another example of how sanctions and OPEC+ curbs are recasting the supply chain.

Reliance Industries Ltd., India’s largest private refiner, purchased about 2 million barrels of Canada’s Access Western Blend crude from the recently expanded Trans Mountain pipeline, its first such cargo. And although that grade suits processors with sophisticated refineries such as Reliance, there were plenty of unusual logistical complexities that came with the deal.

To get the shipment delivered, Reliance is first having to load it onto four smaller tankers from Burnaby port because of local depth restrictions, according to people with knowledge of the matter. The quartet of cargoes will then be transferred onto a single very large crude carrier, before that vessel makes the more-than-19,000-kilometer voyage to India via the Pacific, they said. An alternative, possible route via the Atlantic would be longer still.

Reliance didn’t respond to a request for comment.

The complex journey reflects underlying changes in the global market that have combined to make supplies of dense and sulfurous crude harder to find. First, U.S. sanctions against Venezuela have been reimposed, cutting that nation’s supplies of heavy crude. At the same time, OPEC+ cutbacks have crimped flows of similar grades, while Mexico, another supplier, is also exporting less. Rounding it off, more heavier barrels from the Middle East are getting used locally for power generation during the hot summer months.

The increased availability from Canada, “is welcome news given that India has lost access to Venezuelan crude,” said Dylan Sim, senior oil market analyst at FGE. Still, given other options remain available, the economics of the arrangement have to be extremely favorable for the flow to stay, he said.

Some similar-quality varieties are pumped in countries including Iraq, Brazil, Colombia and Mexico. 

While some Indian buyers have performed multiple ship-to-ship transfers in the past in waters off the U.S. Gulf Coast for cargoes from America and Canada, using four tankers is rare as it’s time-consuming and costly, said the people, who asked not to be identified as the information is private.

The expanded Trans Mountain began operating earlier this month after years of delays. The upgrade more than triples the capacity of the only export conduit from Alberta to the British Columbia Coast, allowing an extra 590,000 barrels a day of exports to Asia or the western U.S.

Besides India, cargoes via the pipeline have already been scheduled to go to China and California.

 

High levels of immigration partially offset Canada's aging population: economist

Daniel Johnson , BNN Bloomberg

Canada’s rapid population growth, due to high levels of immigration, has worked to reduce costs associated with an aging population while spurring other economic challenges, according to one economist. 

Carrie Freestone, an economist at RBC, said in a report Wednesday that there is now a shift in public attitudes toward immigration, which has resulted in a cap on non-permanent residents and limits on international study permits. She said these recent policy moves have been in response to the impact of population growth on housing affordability. However, the report said immigration has “long been viewed” as a strategy to slow the “pace of population aging.” 

“But, reducing immigration also has longer-run economic costs. The Canadian population—like many advanced economies— is getting older. The share of the population that is over age 65 is increasing rapidly as the large baby boom generation flows through to retirement,” Freestone said. 

She also highlighted in the report that caps on non-permeant residents are likely to curb population growth, as Canada’s population will be at least 2.5 per cent smaller than it otherwise would be in 2027. 

However, despite the recent caps on newcomers, Freestone said Canada’s population will continue to rise, as the migration rate is nearly double that of the U.S. 

“Even with immigration caps in place, the hit to Canadian finances from an aging population will be much smaller than in other countries, because of migrants,” she said. 

Freestone said an aging population can create an imbalance between economic output and consumer demand. 

“It will add to structural labour shortages, higher price pressures, and structurally higher interest rates in the economy,” the report said. 

“It also creates a large government funding gap as income tax revenue growth slows while demand for services, particularly for things like healthcare, accelerates as the population gets older.” 

Food driving inflation lower, but groceries much more costly than a few years ago

Rosa Saba, The Canadian Press

Food inflation may be down from its highs, but prices at the grocery store are still significantly higher than they were just a few years ago.

Statistics Canada reminded consumers that grocery prices are up 21.4 per cent compared with three years earlier, even as it reported that food prices were one of the main factors driving inflation lower in April. 

The agency reported that inflation on groceries was just 1.4 per cent in April. 

Cooling inflation on products like meat, fruit, seafood and non-alcoholic beverages helped overall inflation tick lower to 2.7 per cent, down from 2.9 per cent in April. 

• Inflation in Canada slows to 2.7%, boosting June rate cut odds

However, slowing inflation doesn't mean the price growth of the past several years is being erased.

Between April 2021 and April 2024, grocery prices have increased 21.4 per cent, Statistics Canada said. 

Consumers are still grappling with that significant increase, said RBC analyst Irene Nattel in a note. 

Because of that, shoppers will likely continue to seek out lower prices through discount stores, promotions and private-label products, she said. 

Higher food prices have led many shoppers to change their habits, going to discount stores for groceries and seeking out sales or store-brand products. Canada's largest grocers have been responding by increasing their discount footprints across the country in an effort to meet the demand. 

Prices on some food products decreased year over year, such as seafood, bread, fresh fruit and margarine, according to Statistics Canada. Meanwhile, some other food products saw double-digit price increases, such as sugar and syrup, grapes, carrots and onions. 

Inflation on restaurant prices also eased in April, growing by 4.3 per cent compared with 5.1 per cent in March. Price growth at restaurants has been outpacing grocery inflation in recent months. 

Political and public pressure on the major grocers has been mounting as consumers grapple with the effect of higher food prices. The government has called on the grocers to do their part in stabilizing prices, and this month a group of consumers say they are boycotting Loblaw-owned stores. 

Inflation has also led to higher levels of food insecurity in Canada. In 2022, 18 per cent of families in Canada reported experiencing food insecurity within the previous 12 months, up from 16 per cent of families in 2021. 

Market watchers are eyeing June for a potential interest rate cut from the Bank of Canada as inflation continues easing. 

Despite several months of good news on the inflation front, June is still a "close call," said BMO chief economist Douglas Porter in a note, adding that any cuts from the Bank of Canada will be gradual. 

This report by The Canadian Press was first published May 21, 2024.

 

Loblaw boycott organizers say they plan to keep movement going past May

The Canadian Press

The organizers of a month-long boycott of Loblaw-owned stores say they've decided to extend the boycott past May.

After a Reddit group created to vent and talk about high grocery prices attracted tens of thousands of members, plans formed for a 31-day boycott of Canada's largest grocer.

In a press release sent by organizer Emily Johnson on Tuesday, the boycott organizers say a poll of the community's members suggests most want to keep the movement going. 

The release says the boycotters plan to focus on advocacy efforts in the months ahead. 

Loblaw has pushed back against criticisms of the company as frustration mounts over food inflation, saying it is not responsible for higher food prices. 

“As a well-known company and Canada's largest grocer, it is natural that Loblaw would be singled out as a focal point for media and government and of course consumer frustrations,” said Loblaw chairman Galen Weston at the grocer's annual meeting earlier in May. 

He said the company has been working hard to bring more value to customers through its discount stores, new promotions, and pushing back on supplier price increases. 

Loblaw and the other major Canadian grocers have been expanding their discount store footprints as more and more shoppers are flocking to those stores due to the rising cost of living. 

Food inflation has been moderating under the weight of higher interest rates, helping drive overall inflation lower in April, but prices are still significantly higher than they were a few years ago. 

Last year, the government called on grocers to do more to help stabilize food prices for consumers. 

Ottawa has also been putting pressure on the major grocers to sign on to the grocery code of conduct, an agreement meant to level the playing field in the food industry for suppliers and smaller retailers.

Last week, Loblaw announced it's ready to participate in the code after several months of discussions with the industry group leading its creation. The grocer had been a high-profile holdout on the code since last December, when it told a House of Commons committee that it was concerned the code could lead to higher prices. 

"The code now is fair, and it will not lead to higher prices," said Loblaw CEO and president Per Bank last Thursday. He said the company is ready to sign on as long as the other major industry players do too. 

In the press release, the boycott organizers said their statement reflects "the collective determination of a community fed up with the disparity between rising grocery prices and the record profits reported by companies like Loblaw." 

The Reddit group currently has more than 80,000 members. The poll conducted on Reddit shows almost 6,300 people participated, with about 3,700 voting to continue the boycott past May and about 1,900 voting to keep it going for the rest of the second quarter. 

This report by The Canadian Press was first published May 21, 2024.

Independent stores and grocery alternatives

 see sales boost amid Loblaw boycott

Rosa Saba, The Canadian Press

As the month-long boycott of Loblaw-owned stores wears on, small independent food retailers and alternative grocery options say they’re seeing a boost in traffic and sales. 

At Forage Market in Edmonton, sales rose 57 per cent during the first half of May, compared with the same period a month before.

“It's just awesome that people are actually putting thought behind where their food comes from,” said business manager Courtney Hanak. 

Forage Market is like an online farmers market: it hosts local vendors selling meat, produce and more, and warehouses their products so customers receive everything they order in one shipment. 

The boost in sales could help Forage act on its plans to expand to Calgary sooner, said Hanak. 

She hopes that shoppers’ interest in buying from local and smaller companies continues beyond May. 

“Is this just going to be something that’s too good to be true? Maybe we're just having a really good few weeks, and then it'll go back.”

After a Reddit group created to complain about Loblaw and the other major grocers gained thousands of members, talk of a boycott started to gain traction earlier this year as consumers grew increasingly frustrated with high food prices and industry concentration. The organizers planned a boycott of all Loblaw-owned stores in May.

Loblaw chairman Galen Weston, as well as the company's chief executive Per Bank, pushed back on what they called “misguided criticism” at the company’s annual meeting May 2. 

Loblaw has said it's not responsible for food inflation, and that it has been trying to mitigate rising prices by pushing back on price increase requests from suppliers. 

Last week, the grocer said it's ready to sign on to a voluntary grocery code of conduct, an agreement meant to level the playing field for suppliers and smaller retailers. 

Some of the food retailers seeing a boost from the boycott as shoppers look for local options are grocery co-operatives, an alternative model where the store is owned by members — in many cases, by customers. 

Steep Hill Food Co-op in Saskatoon has seen an uptick in membership this month, which has helped the organization in a big way.

The area’s main grocery store closed down two years ago and in recent months, the co-op has been expanding its wares to include more conventional fare alongside the fair-trade and organic products it’s known for, manager Amielle Christopherson said.

“We have started pivoting a bit to ...  keep our doors open,” she said, “and to be doing so by meeting the needs of the people in this neighbourhood.”

That pivot had already helped increase membership, said Christopherson, but in the last week of April, growth really ramped up. 

“We’re selling two or three memberships a day,” she said. “And it was not like that before.”

Christopherson thinks joining a co-op can help people gain a much-needed sense of community. 

“Especially around food, it’s so central to our lives,” she said. “And so those two things meld really well together.”

Karma Co-op in Toronto also saw a surge in membership after the boycott began. The co-op said in a May 10 press release that the organization had already seen new members joining in record numbers, with month-over-month growth of more than 50 per cent, making 2024 the co-op’s biggest year for recruitment. 

In the past several years, apps and websites offering new models for buying groceries have popped up. Those companies are also seeing customers increasingly showing interest. 

Odd Bunch is one of those. The company sends customers boxes of produce and fruit deemed not good-looking enough for retail stores, saving shoppers money while also avoiding food waste, said CEO and founder Divyansh Ojha: “It really is a win-win situation.”

The service started in London, Ont., and expanded rapidly across the province. 

In May, sign-ups to Odd Bunch have been “above and beyond” normal numbers, said Ojha — between 60 to 70 per cent higher traffic and conversions in the first week of May compared with a year earlier.

“People are at the very least wanting to try out an alternative,” he said. 

But it’s important that the company finds a way to sustain that interest past May, he added. 

Tre’dish, another grocery delivery service, sells groceries directly from producers to consumers. Its boxes offer up to 30 per cent average savings compared with a traditional grocer, said CEO Peter Hwang, thanks to the model’s ability to cut down on supply chain costs.

After launching its direct-to-consumer service in Mississauga and Hamilton in early March, the platform has seen significant week-over-week growth, said Hwang. Tre'dish expanded into Toronto just a couple of weeks before the Loblaw boycott began. 

“The timing was just really good for us to launch in Toronto,” said Hwang. 

Tre'dish has seen its subscriber base grow by 186 per cent since the Toronto launch in April. 

Hwang thinks consumers are more interested in alternative models for grocery shopping as their frustrations over prices, transparency and sustainability grow. 

“It's a very different model that ... I think is very much needed,” said Hwang.

“Hence the reason why I think we're seeing the uptake and interest that we're seeing.”

This report by The Canadian Press was first published May 21, 2024.

 

Canadians Split on Trudeau’s Capital Gains Tax Boost, Poll Finds

Laura Dhillon Kane and Jay Zhao-Murray, Bloomberg News

, Nanos Research for Bloomberg

(Bloomberg) -- More Canadians have a negative view of Prime Minister Justin Trudeau’s planned capital-gains tax hike than a positive one, while most lack confidence that housing will become affordable in five years, according to a new poll.

The survey by Nanos Research Group for Bloomberg News found that 45% believe the tax changes will lead to decreased investments and innovation, which will weaken the economy. Some 38% said the increase is fair and would close the gap between the rich and poor. The remainder were unsure.

The government’s budget, released last month, included plans to tax Canadian companies on two-thirds of their capital gains, up from half currently. The change will also apply to individual taxpayers when they have gains over C$250,000 ($183,000) in a year, although people will still be able to sell the homes they live in tax-free. 

The money raised by the tax hike is to be spent on a number of programs, including initiatives to help younger people afford a home. But the poll suggests many are not swayed by the plan. 

Debate over the capital-gains tax is likely overshadowing other elements of the federal budget. The post-budget tracking by Nanos suggests the opposition Conservatives continue to enjoy a lead of 18 percentage points over the ruling Liberals. An election is due in 2025. 

“If the budget was intended as a potential reset of the Liberal government agenda in order to help close the gap with the Conservatives, the research suggests it is unlikely to succeed,” Nik Nanos, the firm’s chief data scientist and founder, said in an email.

The capital-gains increase sparked an outcry from businesses that warned the move would exacerbate the country’s investment and productivity woes. Finance Minister Chrystia Freeland has yet to introduce legislation to enact the tax change, but she has defended it as merely “asking those who are benefiting from the winner-takes-all economy to pay a little bit more.”

Residents of the Prairie provinces, home to Canada’s energy industry, were much more likely to say the changes would weaken the economy than those in Quebec or Atlantic Canada. Perhaps most troubling for Trudeau, the changes are less popular with younger Canadians than with older voters. 

Read More: Young Canadians Feel Poorer in Warning Sign for Economy, Trudeau

Some 46% of Canadians ages 18 to 34 oppose the tax increase, a figure that rises to 48% for those aged 35 to 54, before falling to 41% among those over 55. The outcome is not what Trudeau and Freeland had hoped for from a budget aimed at “generational fairness.”

Support for Trudeau’s Liberals has been slipping among all age groups, but younger Canadians were crucial in clinching the party’s electoral majority in 2015. His budget included a new housing strategy, with plans to free up federal land for homebuilding and allow first-time buyers to pay off their mortgages over longer periods, in an effort to ease the housing affordability crunch. 

But Nanos found that a large majority of Canadians of all ages — 80% — aren’t confident housing will be more affordable in five years. That’s similar to public opinion on the same question last year. 

When broken down by age groups, some 82% of those aged 18 to 34 don’t believe housing will be more affordable in five years, compared with 77% of those over 55.

Nanos surveyed 1,086 Canadians by phone and online between April 28 and May 1. The poll has a margin of error of three percentage points, 19 times out of 20. The range of error may be wider when referring to subsets of the overall population because the sample size is smaller.

©2024 Bloomberg L.P.