MONOPOLY CAPITALI$M

Federal committee will take another look at Rogers-Shaw deal

The Canadian Press

The House of Commons industry and technology committee is planning to hold another study into the proposed Rogers-Shaw merger.

Conservative MP Rick Perkins and New Democrat MP Brian Masse confirmed to The Canadian Press the committee plans to meet on Jan. 25 to review the proposed $26 billion transaction.

The Federal Court of Appeal will hear the Competition Bureau's appeal of a decision that cleared the way for Rogers Communication Inc.'s takeover of Shaw Communications Inc. on Jan. 24.

The committee had previously reviewed the merger in March and recommended against the transaction.

Now it will conduct a second study into the deal, which has since changed to include the sale of Shaw-owned Freedom Mobile to Quebecor-owned Videotron Ltd.

Perkins said in an interview that Parliament should have the opportunity to review the deal as it now stands since the study conducted in March was of a previous version of the proposed transaction.

Canada can make case for EV production

during Biden visit: Ont. finance minister

Holly McKenzie-Sutter, BNN Bloomberg

The finance minister of Canada’s largest province said an expected visit from U.S. President Joe Biden is an opportunity to position Ontario as a friendly hub for electric vehicle production.

Ontario Minister of Finance Peter Bethlenfalvy told BNN Bloomberg it’s “fantastic” that Biden plans to travel north on an official visit in March.

“I think it’s long overdue that the president is coming to Canada,” Bethlenfalvy said in a Tuesday television interview from New York. “We’re very focused on doing more trade and good bilateral trade with our friends in the U.S.”

The presidential visit, Biden’s first since taking office two years ago, will be a platform to build on Ontario’s efforts to host more electric vehicle part manufacturing, Bethlenfalvy said, highlighting billions of dollars in recent funding announcements as the province’s auto sector expands its footprint in the EV rush.

Bethlenfalvy also highlighted the geopolitical benefits for the United States if Ontario makes progress on its ambitious goals to mine in the province’s north for critical minerals that are in high demand as the world ramps up battery production.

“The president doesn’t have to call China or Russia for a safe, secure supply of critical minerals that will go into batteries which go into the electric vehicles which help us with emissions down the road,” he said.

Biden, Prime Minister Justin Trudeau and Mexican President Andrés Manuel López Obrador are meeting in Mexico this week to discuss trade. Manufacturing and supply chains have been a sticky subject among the closely tied trio recently as the U.S. embraces Biden’s protectionist “Buy American” stance, though last year a major green incentives bill in the U.S. was expanded to include vehicles produced in North America, not just in the United States.

While the federal leaders met in Mexico City, Bethlenfalvy was in New York promoting Ontario and its plans to build infrastructure to Wall Street investors. He said Ontario is the first or second largest trading partner with more than half of U.S. states, and touted the province’s U.S. trade successes as tied to Canada’s at large.

Behtlenfalvy also discussed government bonds the province offers, noting that Ontario mostly sells short-term bonds to outside investors, though he said interest is growing in the province’s green bonds. 

CES: Made-in-Canada Project Arrow unveiled

Holly McKenzie-Sutter, BNN Bloomberg

A made-in-Canada electric vehicle concept car was unveiled to the world on Thursday.

Project Arrow was showcased at the Consumer Electronic Show (CES) tech conference in Las Vegas, after smaller-scale previews in Canada last year.

Flavio Volpe, president of the Automotive Parts Manufacturers’ Association (APMA) of Canada, called the project an “all-Canadian effort” before unveiling the drivable EV prototype.

The APMA said the car will be designed, engineered and built in Canada as the country aims to reduce emissions and transition its auto manufacturing industry over the coming decades.

Carleton University’s School of Industrial Design worked on the design and Ontario Tech University Automotive Centre of Excellence is leading the build on the EV.

More than 50 Canadian industry partners are involved the project, including companies that worked on elements of the car like data privacy and battery production.

Ontario Minister of Economic Development Vic Fedeli was on site in Las Vegas at the event, where he gave brief remarks about the province’s recent push to bring more EV manufacturing work to Ontario.

“This is where you want to be if you’re in the electric vehicle sector,” he said.

Project Arrow takes its name from the Avro Arrow jet aircraft that was designed and built in Canada in the 1950s. The EV project began as a design contest in 2020.

The prototype showcase came after months of EV manufacturing funding announcements as Canada tries to cash in on growing global demand for zero-emissions cars and hybrid vehicles.

The federal government recently proposed new regulations that would require one-fifth of all passenger cars sold in Canada be electric by 2026.

Canada is also aiming to provide minerals needed for EV parts as the world ramps up production plans.

Clearco CEO Romanow steps down as firm slahes jobs

Amber Kanwar, BNN Bloomberg

Canadian fintech Clearco – once a high-flier in this country’s high-tech sector – is undertaking another major round of layoffs and will replace the company’s co-founder Michele Romanow as CEO.

Clearco plans to reduce its workforce by another 25%-- just six months after a similar layoff at the company saw 125 employees let go. Romanow, who started the company in 2015 with four other founders and became CEO less than a year ago, will become Executive co-Chair and remain on the board. She is expected to be replaced as CEO by Andrew Curtis, who has been working as an advisor with the company for the past 6 months.

Toronto-based Clearco, whose official name is CFT Clear Finance Technology, lends money to people and companies based on revenue rather than assets.

The company is coming off a tumultuous year. Two years ago, Clearco embarked on an ambitious international expansion. But by the end of last August, the company announced it was exiting all international markets. At the time, the company blamed a combination of rising interest rates, inflation, currency swings and an overall slowdown in e-commerce, as well as supply chain constraints the companies it lends to were dealing with.

Clearco is by no means the only tech company finding itself in deep cost-cutting mode. Last summer, Shopify cut its workforce by 10%. In the U.S., major tech companies like Meta, Amazon, Salesforce and Twitter have announced thousands of job cuts. A total of 237,874 tech jobs were lost last year according to TrueUp, which tracks tech layoffs. So far in 2023, more than 30,000 jobs have been cut.

Still, it marks a tremendous turn of fortunes for a company that was valued at $2 billion dollars less than two years ago when Softbank led the funding round.  Clearco, which has yet to turn a profit, has raised almost $700 million in funding over the past several years, according to Crunchbase. Part of that is a debt investment from Silicon Valley Bank. Sources say that recently the debt has become increasingly difficult to service.

Incoming CEO Andrew Curtis has a finance and capital markets background. He was brought in as an advisor six months ago, in part to help with capital structure issues the company has been working through. Curtis denied any struggles with servicing the debt from Silicon Valley Bank in an interview with BNN Bloomberg saying, “We are able to service the Silicon Valley Bank debt and have been able to service the Silicon Valley Bank debt.”

Late last summer, Clearco hired U.S. fintech investment bank Financial Technology Partners to explore strategic options, including a possible sale. There was some inbound interest but the focus of the strategic review was injection of capital instead of an outright sale, according to a source familiar with the matter.  Financial Technology Partners had no comment. In an interview with BNN Bloomberg, Romanow denied that the purpose of the engagement with Financial Technology Partners was to sell the company, "I wouldn’t call that a failed process at all because that wasn’t the purpose of that.”

In addition to layoffs and management changes, the company also intends to raise more capital. “We have a plan for profitability, so we may be taking on additional capital raises,” said Curtis in an interview, “but that doesn’t mean we don’t have very strong liquidity right now.” In October, Clearco raised US$30 million from existing investors and founders. “In our business there is always a need to raise capital,” added Romanow.

XTINCTION REBELLION SAYS; NO FUTURE

Experts weigh in on whether younger generations need life insurance

Rosa Saba, The Canadian Press

Life insurance may not be top of mind for many young Canadians, but experts say age shouldn't be the deciding factor in getting such coverage. 

According to insurance tech company Zelros, younger people across Canada, the U.S. and Europe are less likely to have life insurance compared with older generations, with just more than half of those aged 18-34 covered.

But certified financial planner Jackie Porter says the decision about whether to get life insurance isn’t about how old you are, it’s about what life stage you’re at.

If you have dependants, such as children, or you owe a large sum of money, such as a mortgage, you should look into life insurance, said Porter. You could be 25 or 35 — it’s all about whether someone else is depending on you, and would be in trouble financially if you were to pass away.

Porter added that dependants could also be your aging parents, or your spouse if you have a mortgage together or you make significantly more money than they do.

Andrew Ostro, co-founder and CEO of digital life insurance provider PolicyMe, said his company sees the most uptake between the ages of 35 and 45.

“As you start to have a family, as you start to get a mortgage, that’s when it really begins.” 

If you’re 25 years old, single and with no children, PolicyMe’s algorithm would tell you not to get life insurance, said Ostro; at that life stage, he’d rather see your money put in a savings vehicle than in life insurance. 

The big question to ask is whether someone is relying on your future income, said Ostro.

If you don’t have dependants or major debt, Porter suggests looking at “living insurance” instead, such as critical illness insurance, for coverage that will help you if something happens that will impact your income.

According to the Canadian Life & Health Insurance Association (CLHIA), 22 million Canadians have life insurance, with 83 per cent of life insurance sold to individuals and the rest as group plans. 

There are two broad kinds of life insurance, according to CLHIA. Term insurance covers a specified stretch of time, such as five or 10 years, and premiums normally increase every term. Term insurance can usually be converted to permanent insurance, which is for lifelong protection and can also be used to cover financial emergencies or to supplement retirement income. Meanwhile, whole and universal are two different kinds of permanent life insurance.

Term life insurance is for people who have time-limited expenses, like a mortgage, while permanent is for the full lifetime, said Sarah Hobbs, director of policy at CLHIA. Premiums for permanent life insurance are usually higher, and there are add-ons that can cover costs during your life such as long-term care.

Most younger people who are good candidates for life insurance should get term insurance, said Porter. The term should align with the length your mortgage will take to pay off, for example, or the approximate length of time your children will be financially dependent on you. 

When it comes to how much coverage to get, Ostro recommends getting enough to pay off your mortgage, plus whatever would be needed to keep your dependants financially stable. 

Term life insurance isn’t that expensive for most people, said Ostro. For example, someone in their mid-30s might only pay between $30 and $40 a month, he said — though if you smoke, you’re looking at double the premiums no matter your age. 

Your premiums may get more expensive when you renew, so even though the premiums on a longer term might cost a little more monthly, they’re worth it in the long run, said Ostro. 

Aside from mortgages with more than one person on them, debt isn’t passed directly on to your dependants but is paid out by your estate, meaning there would be less of your assets and savings to be divided among your family, said Ostro. So you should include all debt in your coverage calculation. 

There are some people who should get life insurance before becoming parents, said Porter. Because you can lock in lower premiums when your health is good, anyone concerned about health based on their family history who’s planning to start a family within a few years should lock in those premiums now before future illness drives up the cost of insurance. 

Many people have life insurance through their workplace benefits, known as group insurance, but might not know what that insurance actually includes. 

Group life insurance usually covers less, said Hobbs. For many younger people it may be enough, but you shouldn’t assume it is — she suggests getting to know your policy and deciding for yourself whether to supplement it with an individual policy, as many people do. 

Most group life insurance covers between $50,000 and $100,000, said Ostro. It might sound like a lot of money, but it’s definitely not enough to cover, say, two children until they’re financially independent. 

You should consider your work policy secondary, not primary, Porter said, especially as you may not be at that workplace forever. The policy may be enough during your current life stage, but if you have dependants she recommends getting an individual policy.

“It's a good idea to read what exactly you're covered for,” she said. 

This report by The Canadian Press was first published Jan. 17, 2023.

Bombardier says 2022 revenue hit US$6.9B, cash flow US$735M in preliminary results

The Canadian Press

Bombardier is set to beat its own financial results expectations for 2022, the company said Tuesday as it released preliminary results.

The aircraft maker said key factors like revenue, earnings, and especially free cash flow will come in ahead of what it had guided earlier last year.

Bombardier, which reports in U.S. dollars, initially expected free cash flow of around US$50 million for the year but increased its guidance to US$515 million last August. It now expects free cash flow of US$735 million.

When it increased the cash flow guidance last August, the company said the amount had increased because of stronger working capital performance and increased interest cost savings from accelerated deleveraging.

Revenue of US$6.9 billion will be ahead of the more than US$6.5 billion it had previously guided, while the 123 aircraft it delivered compares with the more than 120 it had guided.

It said preliminary results point to adjusted earnings before interest, taxes, depreciation and amortization of about US$930 million for the year compared with its guidance for more than US$825 million.

The COVID-19 pandemic led to a surge in demand for business jets as flight cancellations, wariness of exposure to the virus and surging wealth among the ultra-rich helped boost interest. 

Bombardier is expected to release its full financial results for its fourth quarter and all of 2022 on Feb. 9.

MINING;NOT GREEN NOT SUSTAINABLE

'Smoke and mirrors': Northern miners call for more support for critical minerals

Emily Blake, The Canadian Press

Mining companies with projects in the North say more federal support is needed following the release of Canada's new critical minerals strategy, while some environmental advocates are wary of the potential impacts. 

Several projects in the North focus on critical minerals — so-called because they are considered critical to Canada's economy and strategic industries like clean technology — including zinc, copper, cobalt, bismuth, tungsten, uranium, and nickel. Canada's first rare earth elements mine, Nechalacho mine owned by Vital Metals subsidiary Cheetah Resources, opened in the Northwest Territories in 2021. 

Robin Goad, president and chief executive officer of Fortune Minerals Ltd., said his company has been speaking with the federal government about critical minerals for more than five years, but has yet to see substantive action. Fortune owns the proposed Nico mine, a cobalt, gold, bismuth and copper project in the N.W.T.

"It's time we stop talking about this and actually (start) doing something," Goad said. 

"We got this tremendous amount of money announced in the federal budget, but it's all smoke and mirrors right now." 

The federal government released a strategy last month that aims to increase the responsibly sourced supply of 31 critical minerals. It's backed by $3.8 billion in the 2022 budget, including $40 million to support northern regulatory processes and a 30 per cent exploration tax credit for targeted minerals.

Goad believes support should be focused on advanced projects that can quickly transition into production like the Nico mine, as well as processing. He said once the company secures financing, it could begin production within three years. 

Regulatory environments are "cumbersome and expensive," Goad added, and the N.W.T., whose economy relies on mining, is a high-cost jurisdiction with limited infrastructure. 

The strategy aims to accelerate strategic projects, build sustainable infrastructure, reduce duplication and make assessments more efficient. It also plans to promote climate action and environmental protection, as well as advance reconciliation with Indigenous peoples.

Brandon Macdonald is the chief executive officer and director of Fireweed Metals, which owns the zinc, lead and silver Macmillan Pass project and the tungsten Mactung project on the Yukon-N. W. T boundary. 

He said he'd like the government to extend flow-through tax credits as there is capital scarcity during the lengthy permitting process, as well as invest in infrastructure like roads, power grids, smelters and refineries. 

"With increased resource nationalism around critical minerals, they're going to want to keep more of these products in the country, or at least with close allies," he said.

"It requires a bit of a leap of faith on government supporting these critical mineral projects and pushing that project forward."

Osisko Metals Inc. plans to resurrect the N.W.T.'s former Pine Point mine as a zinc and lead project. Chief operating officer and director Jeff Hussey said incentives are welcome, as exploration can be risky and it takes a long time to develop mines while Canada has set emissions reduction targets for 2030 and 2050.  

"The sooner the better and the more encouragement the better, but I think we're off to a good start," he said.

Hussey said he'd like to see the permitting process made more efficient while still ensuring protection of the environment and communities.  

The World Bank Group, in a 2020 report, found global demand for minerals used in clean energy technologies could increase nearly 500 per cent by 2050, with more than three billion tonnes needed to meet climate change goals.

Prime Minister Justin Trudeau visited Vital Metals' rare earth elements processing plant in Saskatoon on Monday as part of a three-day tour of Canada's battery supply chain. He spoke about the importance of reliable supply chains, environmental responsibility and partnerships with Indigenous people. 

"This is the way the world is moving and fortunately Canada is extraordinarily well positioned to do just that," he said. 

N.W.T. legislature member and longtime environmental advocate Kevin O'Reilly said he sees the strategy as a push for deregulation of the mining industry.

"I don't think that this is terribly helpful and I don't think that this is the right approach when it comes to the climate crisis," he said.

O'Reilly said these projects can be risky both financially and environmentally and more work should be done to examine the potential environmental and human health impacts from processing these minerals. 

Jamie Kneen with MiningWatch Canada said the strategy ignores many issues relating to mining.

"What we've got here is a plan to promote mining, not a plan to really ensure that Canada's doing anything more than accelerating the kinds of extractive processes of an extractive economy that we're already engaged in."

Kneen said there should be greater emphasis on planning and co-ordination with Indigenous governments so communities can adequately engage with and respond to resource projects. 

The federal government plans to discuss energy and resource priorities, including critical minerals, the territories and provinces. 

This report by The Canadian Press was first published Jan. 17, 2023. 

This story was produced with the financial assistance of the Meta and Canadian Press News Fellowship.

PERVERSE LOGIC OF CAPITALI$M

Surprise jobs gain increases the odds of a Bank of Canada rate hike: experts

Hilary Punchard, BNN Bloomberg

Experts are flagging the latest jobs gain raises the probability of the Bank of Canada (BoC) increasing its key policy rate at its next meeting.

On Friday, Statistics Canada reported the Canadian economy exceeded economist expectations by adding 104,000 jobs in December. Canada’s jobless rate also fell to a near record low of 5.0 per cent.

Economists tracked by the Bloomberg terminal were expecting an increase of 5,000 positions and a jobless rate of 5.2 per cent.

In a note to clients on Friday, Andrew Grantham, executive director and senior economist at CIBC Capital Markets, said this jobs gain could translate into another 25 basis point (bps) interest rate hike at the Bank of Canada’s next meeting.

“The strong headline readings raises the probability of another 25bp hike at the January meeting, and is a clear risk to our forecast for a hold,” Grantham said.

“However, the next CPI (Consumer Price Index) report and the BoC's own business and consumer surveys, released in two weeks' time, will also be important in making that final decision.”

The Bank of Canada will be releasing its Business Outlook Survey on Jan. 16 and Statistics Canada will post the latest read on Canadian inflation with the Consumer Price Index on Jan. 17.

WEAKER TOTAL HOURS AND WAGE GAINS

While the December job gains surpassed economists’ expectations, the Labour Force Survey wasn’t strong across the board.

Total hours worked were up 1.4 per cent compared to a year ago.

“Total hours worked, which feeds more directly into GDP calculations, was little changed on the month. Despite the apparent hiring spree, the economy didn’t seem to be producing much more goods and services,” said Royce Mendes, managing director and head of macro strategy at Desjardins Group, in a note to clients on Friday.

“Our tracking for Q4 (fourth quarter) GDP will likely remain around 1.5 per cent.”

The annual pace of wage gains also decelerated last month. Year-over-year wage growth came in at 5.1 per cent, marking the seventh consecutive month its been above five per cent.

“Overall, the picture painted by today’s Labour Force Survey is hardly as strong as the headline jobs reading would suggest,” Mendes said.

“Still, the surge in hiring is probably enough to tilt the odds in favour of a final 25bp rate hike from the Bank of Canada later this month.”

Union calls CRA labour complaint hypocritical ahead of strike votes and tax season

Rosa Saba, The Canadian Press

The Canada Revenue Agency (CRA) headquarters Connaught Building is pictured in Ottawa on Monday, Aug. 17, 2020. The Canada Revenue Agency (CRA) has filed an unfair labour practices complaint against the union representing taxation employees, claiming it is not bargaining in good faith. (THE CANADIAN PRESS/Sean Kilpatrick)

The union representing more than 35,000 Canada Revenue Agency (CRA) employees said the agency's recent labour practices complaint against it is hypocritical as strike votes loom ahead of tax season.

"I find it insulting," said Marc Briere, national president of the Union of Taxation Employees (UTE).

On Friday, the Canada Revenue Agency (CRA) filed an unfair labour practices complaint against the Public Service Alliance of Canada -- Union of Taxation Employees (PSAC-UTE), claiming it is not bargaining in good faith.

 It asked the Federal Public Sector Labour Relations and Employment Board to force the union to return to the bargaining table before being allowed to declare or authorize a strike.

The union declared an impasse in negotiations on Sept. 1, then withdrew from mediation on Dec. 20, the same day it began.

The union said it withdrew from mediation because the Treasury Board had announced a return-to-work order for all employees just a few days before mediation was set to start, which the CRA chose to comply with even as return-to-work was a key bargaining issue.

Briere said the union initially declared a bargaining impasse because the CRA refused to table a wage offer, and said the return-to-work was the final straw for the union and CRA employees.

"Our team was just livid," he said.

The CRA did not respond to a request for comment.

The union said it asked the CRA to withdraw its return-to-work order and discuss telework during mediation, and when the CRA refused, the union chose to withdraw from mediation.

Three days before the labour complaint was filed, the union announced it would be launching strike votes to be conducted from Jan. 31 to April 7, during which time the union and the CRA will also be engaging in Public Interest Commission hearings recommended by the labour board on Jan. 27 and Feb. 20.

When the union left the bargaining table, the CRA said there were more than 200 outstanding bargaining demands, many of which involve what it deems to be significant costs to the CRA and taxpayers. Briere disputed this characterization.

The union's move toward a strike position would affect the tax filing season, the revenue agency said, adding that it's disappointed in the union's actions.

Briere said that's the point. He said based on what he's hearing from CRA employees, he's "extremely confident" the union will receive a strong strike mandate, and will be in a legal position to strike in April.

Unless the employer is prepared to launch expedited negotiations and reach a deal, he expects the CRA to come to a standstill at its busiest time of year (the deadline to file taxes is April 30).

"I'm going to shut it down exactly when it hurts," he said.

"It's very unfortunate. It's not what we want. But we reached a point of no return."

The union, in its release announcing the strike votes, said that wages keeping pace with inflation and a sensible remote work policy are critical in reaching a deal with the CRA. Briere added that working hours are a big sticking point for CRA employees as well.

He said that bargaining between PSAC-UTE and the CRA has been strained for years, marked by delays, and the union had hoped after the CRA's efforts during the pandemic, this round would be different.

"We are really fed up with the way that bargaining has been going on, not just this round, but the last three rounds," said Briere.

"We pulled the plug because ... the system is broken."

This report by The Canadian Press was first published Jan. 16, 2023

Canadians more worried about rising debt amid high cost of living: MNP

Holly McKenzie-Sutter, BNN Bloomberg

Canadians are increasingly worried about their levels of debt amid rising interest rates and high inflation, according to quarterly poll results released by MNP Ltd. on Monday.

The MNP Consumer Debt Index, a quarterly snapshot of consumer sentiment in Canada, fell 15 points to 77 in a new low for the index that speaks to Canadians’ mounting concerns about their personal finances

The report also found that nearly half of respondents were concerned about their debt at 47 per cent, a record-high figure that jumped seven points from the last survey.

MNP also said that fewer people were confident in their ability to pay for living expenses this year without going further into debt, at 51 per cent, and 68 per cent said they were already feeling the effects of central interest rate hikes after last year’s tightening cycle from the Bank of Canada.

Grant Bazian, president of insolvency firm MNP, said the results show how higher interest rates and inflation are hitting Canadian’s attitudes about their debt.

“For many, this represents a double whammy, because inflation is eroding household budgets and, at the same time, financially fragile and overleveraged Canadians face sharply rising borrowing costs,” Bazian said in a written statement.

More people reported that their ability to absorb a one percentage point interest rate increase had worsened, up nine points from the last survey at 26 per cent. Three in five people said they are more concerned about their ability to pay their debts as interest rates rise, and 59 per cent said they would be in financial trouble if interest rates go much higher, the report found.

Just under half of respondents, at 45 per cent, said they are $200 away or less from not being able to meet all their financial obligations, and 30 per cent said they already don’t make enough income to cover their bills. Those figures remained consistent from the last quarter.

Canadians with household incomes lower than $40,000 and people aged 18 to 54 were most likely to feel the squeezing effects of interest rate increases and be concerned about their debt repayment abilities.

More than half of respondents said feeding their families and saving money are less affordable, and a similar percentage said transportation, clothing and housing were becoming less affordable.

A growing percentage of Canadians also reported taking on more debt. More people said they have only paid back the minimum on their credit cards or lines of credit compared with December 2021, and that they borrowed money they can’t pay back quickly. One in five people reported their would use savings to pay their bills, and one in 10 said they would use their credit cards or borrow money from friends or family.

METHODOLOGY

The MNP Consumer Debt Index measures Canadians’ attitudes toward their consumer debt and gauges their ability to pay their bills, endure unexpected expenses, and absorb interest-rate fluctuations without approaching insolvency. Conducted by Ipsos and updated quarterly, the Index is an industry-leading barometer of financial pressure or relief among Canadians.

The data was compiled by Ipsos on behalf of MNP LTD between December 1-6 2022. For this survey, a sample of 2,000 Canadians aged 18 years and over was interviewed. Weighting was then employed to balance demographics to ensure that the sample's composition reflects that of the adult population according to Census data and to provide results intended to approximate the sample universe. The precision of Ipsos online polls is measured using a credibility interval. In this case, the poll is accurate to within ±2.5 percentage points, 19 times out of 20, had all Canadian adults been polled. The credibility interval will be wider among subsets of the population. All sample surveys and polls may be subject to other sources of error, including, but not limited to coverage error, and measurement error.

Canadians focused on repaying debt in 

2023: CIBC survey

Holly McKenzie-Sutter, BNN Bloomberg

Repaying debt is a common financial goal for Canadians heading into 2023, a new survey has found, as inflation, high interest rates and fears of a potential recession stay top of mind.

Eighteen per cent of people surveyed in an annual CIBC poll on financial priorities said repaying debt was their number one goal for the new year, while 17 per cent said keeping up with bills was their top priority.

Another 14 per cent pointed to growing investments as their main goal for the year. Secondary goals included saving money, avoiding taking on more debt and reducing discretionary spending.

At 65 per cent, more than half of respondents said inflation was their top financial concern, followed by rising interest rates at 30 per cent and fear of a recession at 24 per cent.

Carissa Lucreziano, vice-president of CIBC Financial and Investment Advice, said people are focused on “what is in their sphere of control” in uncertain economic times.

"The current economic environment has, understandably, prompted Canadians to re-assess their financial priorities for 2023," she said in a written statement.

Just over half of the poll respondents said they need to get a better handle on their financial situation in the next year. One in four people said they have taken on more debt in the last 12 months, due largely to higher cost of living and expenses that stretch beyond monthly income.

Forty per cent of people said they are concerned about job security in the current uncertain economic environment, and 68 per cent said that uncertainty makes it difficult to plan ahead.

But despite concerns about personal finances and the rocky economic situation, 62 per cent of people said they feel financially prepared for the unexpected and 59 per cent said they believe their financial situation can withstand a recession – a possibility that a significant majority of respondents said they are worried about, at 74 per cent.

METHODOLOGY:

This Maru Public Opinion survey was undertaken between December 12 and December 19, 2022 by the sample and data experts at Maru/Blue and involved 1,523 randomly selected Canadian adults who are Maru Voice Canada online panelists. For comparison purposes, a probability sample of this size has an estimated margin of error (which measures sampling variability) of +/- 2.5%, 19 times out of 20. The results have been weighted by education, age, gender and region (and in Quebec, language) to match the population, according to Census data. This is to ensure the sample is representative of the entire adult population of Canada. Discrepancies in or between totals are due to rounding.

https://warwick.ac.uk/fac/arts/english/currentstudents/undergraduate/modules/fulllist/special/statesofdamage/syllabus201516/graeber-debt_the_first_5000_years.pdf

David Graeber, Debt: The First 5000 Years - University of Warwick 

Debt : the first 5,000 years I David Graeber. p. em. Includes bibliographical references and index. ISBN 978-1-933633-86-2 (alk. paper). 1. Debt-History. 

After a strong year for the economy, 2023 will be shaped by high interest rates

Nojoud Al Mallees, The Canadian Press

The Canadian economy started off the year with a remarkable recovery from the COVID-19 pandemic, but heading in 2023, high interest rates are expected to take a significant toll. 

"2022 was quite a rollercoaster," said Randall Bartlett, senior director of Canadian economics at Desjardins. 

After taking a deep plunge during the pandemic, the economy bounced back this year with strong growth and record-low unemployment. The housing market also boomed thanks to low interest rates spurring purchasing activity.

This exuberance in the economy, however, along with global pressures, led to arguably the most pressing economic issue of the year: decades-high inflation.

In turn, the Bank of Canada responded to rapidly rising prices with one of the fastest monetary policy tightening cycles in its history, setting the stage for a rockier year ahead.

"We're really expecting to see the rubber meet the road in terms of the implications of interest rate hikes in the first half of next year," Bartlett said.

Since March, the central bank has raised its key interest rate seven consecutive times, bringing it from 0.25 per cent to 4.25 per cent. That's the highest it's been since January 2008.

Canadians and businesses facing higher borrowing costs are expected to pull back on spending more noticeably in the new year. Economists expect that process to slow inflation, though how quickly, is unknown. 

"The thing that we're looking at is how quickly does inflation come down?" said James Orlando, TD's director of economics. 

Inflation peaked at 8.1 per cent in June and has been steadily declining since. Last month, the annual inflation rate fell to 6.8 per cent, showing slight but positive progress.

Orlando said TD expects inflation to fall significantly in the new year as growth globally and domestically slow. 

In its October monetary policy report, the Bank of Canada forecasted the Canadian economy will stall toward the end of year and into the first half of 2023. That's in line with projections by many forecasters, though some are accounting for a recession in the new year. 

There have been some early signs that the impending economic slowdown is already underway, with consumer spending declining in the third quarter. 

As the economy takes a turn, labour groups in particular have been concerned about the effect of interest rate hikes on employment.

However, many economists are optimistic that unemployment won't rise too dramatically given the current tightness in the labour market. 

In November, the unemployment rate was sitting near record lows at 5.1 per cent. 

"We are starting the year with very high interest rates, still stubbornly high inflation, but a solid foundation with respect to employment [and] savings for Canadians," said Orlando.

Although Desjardins is one of the forecasters predicting a recession next year, Bartlett said it's not all doom and gloom. 

"Households are coming into this in a much better position than previous recessions," he said, adding that the economy should recover toward the end of next year. 

One factor that will influence the depth of the economic downturn is whether the Bank of Canada will continue to raise interest rates.

After its last interest rate decision in early December, the central bank signalled a willingness to press pause on its aggressive rate hike cycle.

"Looking ahead, governing council will be considering whether the policy interest rate needs to rise further to bring supply and demand back into balance and return inflation to target," the central bank said.

However, forecasters are split on whether the Bank of Canada is actually ready to stop raising rates.

TD is betting on one more interest rate hike in January, while Desjardins is in the camp of no more hikes.

As high interest rates begin to weigh more noticeably on the economy, discussion is bound to turn to cuts.

Both TD and Desjardins expect the Bank of Canada to begin cutting interest rates toward the end of the next year, supporting a bounce back for the economy.

"We don't think that the central banks will be able to keep interest rates at these very high levels for too long," Orlando said. 

This report by The Canadian Press was first published Dec. 23, 2022.