CANADA

Unemployment rate drops slightly to 5.1% in November, labour market still hot

Nojoud Al Mallees, The Canadian Press

Canada's unemployment rate is still holding near historical lows even as the Bank of Canada cranks up interest rates to slow the economy and stifle inflation.  

Statistics Canada says employment was little changed in November, with a modest gain of 10,000 jobs.

In its latest labour force survey, the federal agency says Canada's unemployment was 5.1 per cent last month, down from 5.2 per cent in October.

"The main overriding feature of today's report was that you were continuing to gain jobs in Canada," TD's director of economics James Orlando said Friday. 

"If you add up just the number of jobs gained [in] November and October, it's pretty substantial."

In October, the economy added a whopping 108,000 jobs, taking forecasters by surprise with the strong jobs gain. 

Employment rose in several industries in November, including finance, insurance, real estate, rental and leasing, manufacturing and in information, culture and recreation, while it fell in construction as well as wholesale and retail trade.

Statistics Canada also noted in its report that the employment rate among core-aged women aged 25 to 54 hit 81.6 per cent in November, a record high in comparable data going back to 1976.

Canada’s labour market has remained remarkably strong despite signs of an economic slowdown. The unemployment rate fell to a record-low of 4.9 per cent in the summer and has edged up only slightly since then.

"The economy is clearly still doing very well. When you look at the labour market, you have not seen a slowdown," Orlando said. 

Centre for Future Work director Jim Stanford noted Canada's unemployment rate is quite low by historical standards. At the same time, he said, it's difficult to gauge where the labour market is headed. 

"We had several months of very weak reports through the summer and early autumn, then we had a gangbusters report in October. And now we're kind of back to a treading water kind of report," he said. 

Wages have continued to growth in October, though at a rate that lags inflation. 

In November, wages were up 5.6 per cent compared to a year ago, marking the sixth consecutive month of above 5.0 per cent growth.  In October, the annual inflation rate was 6.9 per cent.

Bank of Canada governor Tiff Macklem has characterized Canada’s low unemployment rate as unsustainable and said it’s contributing to high inflation.

"If you think the unemployment rate was already too low, then today's number is bad news." Stanford said. 

The central bank is hoping to see the labour market ease in response to its aggressive interest rate hikes this year.

Recent research from the Bank of Canada suggests it believes it can bring inflation down without causing a large increase in unemployment.

Stanford is critical of the Bank of Canada's assertion that a tight labour market is to blame for inflation given real wages have fallen. 

"It's, I think, mathematically impossible to say that wages are the source of inflation," he said. 

The central bank began raising interest rates in March, when it delivered the first of six consecutive rate hikes, and is expected to deliver another interest rate increase next week.

As the Bank of Canada nears the end of the rate hiking cycle, markets will be watching out for any indication next week on whether to expect another rate hike in January.

Orlando said job report Friday supports the forecast of a half-percentage point rate hike next week, with the door open to another rate hike in January. 

"I don't think by January you're going to have enough data to convince you that the economy has turned enough," he said. 

"So you probably will likely see the policy rate getting into about 4.5 per cent [in] early 2023."

This report by The Canadian Press was first published Dec. 2, 2022.

Outgoing Enbridge CEO talks pipelines, industry transition

Holly McKenzie-Sutter, BNN Bloomberg

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The outgoing chief executive of Enbridge Inc. discussed how the energy giant has changed during his 10 years at the helm, with an expanded roster of energy sources and responses to growing environmental concerns that have been aimed at the industry.

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Al Monaco spoke with BNN Bloomberg's Tara Weber ahead of his Jan. 1 retirement from the president and chief executive officer position. Current Enbridge board chair Greg Ebel is set to replace him in the top job.

Monaco said he’s seen the industry improve in response to political opposition over the last decade, with a greater focus on building relationships with Indigenous communities and responding to consumer demand for more sustainable energy sources.

RENEWABLE ENERGY TRANSITION, NATURAL GAS

Enbridge has tried to look to the “future of energy,” Monaco said.

The company has focused on growing its natural gas assets, he said, and has added a “small component of renewables” as Enbridge looks to expand its wind, solar, hydrogen and carbon capture positions.

That has been balanced with what Monaco calls “conventional energy” like oil. He predicted the global energy transition may take some time as companies like Enbridge diversify their assets.

“I do think we're on the right track,” he said. 

PIPELINE OPPOSITION

Pipelines and other energy infrastructure have been a “point of attack” as opposition to fossil fuels has grown, Monaco acknowledged, saying the company has had to focus its messaging to the public in response.

Opposition has plagued some of Enbridge’s expansion plans over the last decade. The Line 3 replacement pipeline project was completed years behind schedule after controversy in Minnesota. Enbridge is still facing legal battles related to the Line 5, an oil supply conduit that the state of Michigan is seeking to shut down over environmental concerns.

Monaco said he’s not surprised that Line 5 has seen such pushback because pipelines have become a focal point of environmental and climate change concerns for many.

“It’s sort of the meat in the sandwich and it’s very critical, so if you want to attack conventional energy that’s the place to start, and I think it’s been effective if you want to look at it from an opposition point of view,” he said.

In response, Monaco said the company has focused on communicating with the public about the purpose of energy infrastructure, and has stressed the importance of affordable and reliable energy sources – an issue he said came into greater focus during the pandemic.

COMMUNITY ENGAGEMENT, FIRST NATIONS OWNERSHIP

Completing energy projects now takes strong “ground game” and engagement with communities, Monaco said, pointing to that strategy as key to the ultimate completion of the beleaguered Line 3 project.

He said Enbridge had to engage more with Indigenous communities in the U.S. and Canada to complete the project and said such relationships are critical to the future of the industry, pointing to the growing trend of Indigenous ownership stakes in energy infrastructure projects.

“Today, it's very common to talk about Indigenous ownership as part of how you run assets in the future,” Monaco said. “I think it's going to be a critical component.”

NEXT STEPS

Looking back at his time as CEO, Monaco said he’s “pleased” with the safety changes the company made after a 2010 oil spill in Michigan. He said he’s also proud of the company’s expanded presence on the U.S. Gulf Coast – allowing for more participation in the global energy market – and its engagement with Indigenous communities, as well as steps to reduce the company’s carbon footprint like using carbon capture technology and adding renewable sources.

Monaco did not give hints about his next career move, but said he’s “looking forward to doing some other things.”

Blackstone to buy TD warehouse portfolio in tight Toronto market

Natalie Wong, Bloomberg News

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A Blackstone Inc. business has agreed to buy six industrial properties in the Toronto area.

Blackstone Real Estate is paying more than $400 million (US$297 million) in cash for the properties, which total 140,000 square meters and are all fully leased. The transaction is one of the largest trades of a private industrial portfolio in Canada in recent years.

“Global logistics is one of our highest-conviction investment themes, and high-quality, last-mile industrial properties like these continue to benefit from some of the strongest real estate fundamentals in Canada,” said Janice Lin, Blackstone’s head of Canada real estate.

The private equity firm is purchasing the properties from the asset-management arm of Toronto-Dominion Bank, according to a person familiar with the matter, who asked not to be named because the information is private. A Blackstone spokesperson declined to comment, while a TD representative had no immediate comment.

Blackstone has plowed money into industrial properties in recent years, spending roughly US$1 billion since September to acquire spaces globally in areas such as Europe, China, Canada and India.

Logistics and rental housing have been two big areas of focus for the private equity firm even as the broader U.S. real estate industry slows down. Blackstone hasn’t been immune to the softening market, with one of its key property vehicles, Blackstone Real Estate Income Trust Inc., facing a rise in redemption requests as overseas investor appetites wane.

The deal for more logistics space will expand Blackstone’s reach in Canada, where it bought Pure Industrial Real Estate Investment Trust in 2018. Canada’s industrial market remains tight, with the rate of space available at a record low of 1.6 per cent in the first quarter, according to CBRE Group Inc.

 

Canadians look to side hustles to make up for inflation pressure, but at what cost?

Caitlin Yardley, The Canadian Press

Canadians' budgets are being stretched thin as the cost of living climbs — and to compensate, some are taking on a side hustle.

From reselling used items or dog walking to taking shifts driving for delivery services and acting as a brand ambassador, there are plenty of ways to earn some extra cash.

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Erin Rappaport, a Montreal-based human resources generalist, has made extra money in a few different ways.

Rappaport has worked as a brand ambassador for various companies, offering free samples and proving product information at famous sites around Montreal such as the Bell Centre. 

She also uses reselling platforms such as Poshmark and Facebook Marketplace to sell used shoes, clothing and furniture from around the house.

"I have weeks where I have four sales and then sometimes I have none, it really depends," said Rappaport.

New data from professional service company Accenture found that 41 per cent of Canadians plan to take up a side hustle such as babysitting, dog walking, and selling items online to earn additional income before the holidays. 

Another 39 per cent said they would take on additional work hours to make up the extra cash, according to the survey of 1,510 Canadians who had purchased an item for personal use in the last six months.  

Whether it is to save money in the long term or the short term, the first thing to do is to indicate the pressure point of a budget, said Anne Arbour, spokeswoman of the Credit Counselling Society

Then, understand how much time is available for the side hustle and what strengths could be used to make additional income, said Arbour. 

However, there are additional factors to consider in pursuit of additional income such as reporting the earnings and claiming deductions and making sure there is not a conflict of interest with a primary source of income. 

"If the purpose of this is to improve your financial situation check that the extra income isn't putting you in a higher tax bracket, so you might inadvertently be hurting yourself more than helping yourself," said Arbour. 

Having a side hustle grew in popularity when many people had more time on their hands during COVID-19 lockdowns. And for those who were laid off during the pandemic, their side hustle became a full-time reality.

One side hustle that became particularly popular during the pandemic was gig economy work such as driving for a ride share company or a food delivery service. 

In 2017, Jennifer Scott began working full-time as a bike carrier, delivering food for a number of delivery apps in Toronto, and has some words of caution for those with thoughts of joining the industry. 

Often having to navigate traffic and challenging weather conditions, Scott said she injured her knee and had to switch to delivering on foot. 

"I am constantly reminded that if I'm hurt at work when I'm delivering in these conditions, I have nobody, I have only myself to try and figure out how to deal with that," said Scott. 

Workers in the gig economy are considered private contractors, which means they are not entitled to similar employment protections as other workers. 

“There are no sick days there," said Scott. "There's no insurance, there's nothing."

Arbour said that when picking up an additional source of income, it is important to check with insurance to see what needs to be covered. 

But for some, such as Scott, additional protections for the job such as private health care are a luxury. 

"For folks who have that, that's excellent, but for most people who do this work, it's not possible," said Scott.

Whether it is delivering food or taking on shifts as a brand ambassador, it should be considered that when combined with a full-time job, the extra work hours may lead to burnout or exhaustion.  

While taking on a side hustle while working full-time is tiring, Rappaport said that it is the additional money that keeps her going.

This report by The Canadian Press was first published Dec. 6, 2022.