CEBA repayment deadline arrives as businesses warn of closures without extension
The deadline for Canadian businesses to repay pandemic loans and receive partial forgiveness has arrived, as business groups say it could mean closure for many firms.
Hundreds of thousands of businesses and non-profits received a Canada Emergency Business Account (CEBA) loan of up to $60,000 during the COVID-19 pandemic.
Up to one-third of the loans could be forgiven if the outstanding amount is repaid by today, otherwise the debt will convert into a three-year loan with five per cent annual interest.
Businesses also have the option to refinance the loan with a financial institution, giving them until March 28 to set up the arrangement and still be eligible for partial forgiveness.
The Canadian Federation of Independent Business and Restaurants Canada have been calling for another extension to the deadline.
But on Wednesday, Prime Minister Justin Trudeau said it’s time to wrap up pandemic financial aid programs.
The Canadian Press
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Market close: TSX posts small gain while U.S. stock markets rise, led by Nasdaq
Strength in industrial stocks helped Canada’s main stock index post a small gain, while U.S. markets rose, more than reclaiming Wednesday’s losses.
The S&P/TSX composite index closed up 61.71 points at 20,756.73.
In New York, the Dow Jones industrial average was up 201.94 points at 37,468.61. The S&P 500 index was up 41.73 points at 4,780.94, while the Nasdaq composite was up 200.03 points at 15,055.65.
The Canadian dollar traded for 74.05 cents U.S. compared with 73.95 cents U.S. on Wednesday.
The March crude oil contract was up US$1.47 at US$73.95 per barrel and the February natural gas contract was down 17 cents at US$2.70 per mmBTU.
The February gold contract was up US$15.10 at US$2,021.60 an ounce and the March copper contract was up one cent at US$3.75 a pound.
The Canadian Press
Endeavour Mining says fired CEO to lose $29.1 million in pay
Endeavor Mining PLC is stripping its former chief executive Sébastien de Montessus of US$29.1 million in renumeration after he was fired earlier this month for “serious misconduct.”
The London-based gold miner said in a statement Thursday that de Montessus forfeits US$17.6 million, which includes a US$2 million annual bonus for last year and US$15.6 million in unvested share awards. Endeavor Mining is also clawing back US$10 million for a one-off award granted in 2021 and US$1.5 million cash bonus for 2022, the company said.
Endeavour Mining fired de Montessus earlier this month, citing serious misconduct over an alleged irregular payment instruction of US$5.9 million tied to an asset sale. De Montessus has since said he instructed a creditor of Endeavor to make the payment in 2021 to a security company to offset money owed for essential security equipment.
“I am disappointed with the way that this matter has been handled and that I have not been given an opportunity to make proper representations to either the board or the remuneration committee,” de Montessus said in a separate Thursday statement.
The Canadian shares of Endeavor Mining rose 1.2 per cent to $23.88 at 3:44 p.m. in Toronto.
Porter Airlines CEO sees potential path to IPO within 5 years
The top executive of Canada’s Porter Airlines Inc. said he sees “a future potential path” to an initial public offering within five years, a move that would revive earlier ambitions of listing on public markets.
“I don’t think it’s a next year, or this year, type item,” chief executive Michael Deluce said Thursday in an interview at Bloomberg’s Toronto bureau. “It could be in the two- to five-year range.”
Deluce’s comments come nearly 14 years after Porter Airlines tested the waters for an IPO before pulling back on the plans. Porter sought to raise about $120 million from a stock sale in May 2010 to expand operations and buy more turboprop planes, but scrapped the effort weeks later amid a slump in Canada’s stock market.
The privately owned airline is expanding, seeking to fill a void left by WestJet Airlines Ltd.s’ decision to pull back in Eastern Canada. It’s adding dozens of Embraer E195-E2 aircraft, launching new North American routes, and even developing a new terminal at an existing airport in suburban Montreal.
Porter’s research shows that half the people living around Canada’s second-largest metropolitan area would be better served by flying out of Saint-Hubert Airport, about 17 kilometres east of downtown Montreal, Deluce said. Construction at Saint-Hubert began about six months ago and the terminal — starting with nine bridge gates — will be operational in the third quarter of 2025, he said.
TD expects to earn 30% less from Schwab holdings as U.S. banks report earnings
Toronto-Dominion Bank says it expects to earn about 30 per cent less from its Charles Schwab Corp. holdings in its results next month than last year, as U.S. banks report earnings.
TD says its holdings in Charles Schwab should translate to about $141 million in reported equity income for its first quarter of fiscal 2024.
Last year, the bank reported $285 million in net income from its investment in Schwab.
Canaccord analyst Matthew Lee says the Schwab results came in slightly higher than expected but that the financial firm’s outlook for the year disappointed.
Lee says key takeaways for the year from U.S. bank earnings in recent days are net income pressure, improved capital markets and continued credit challenges on commercial real estate loans.
He says Bank of Montreal and Royal Bank of Canada should benefit the most from improvements in U.S. capital markets, while TD will be most affected by softer net interest income.
Read the full story.
The Canadian Press
Midday markets: ‘Desperate desire to cling on to optimism’ from year-end rally
Canada’s main stock index gave up gains in morning trading from industrial and technology stocks, while U.S. stock markets were mixed.
The S&P/TSX composite index was unchanged at 20,694.46 on Thursday.
In New York, the Dow Jones industrial average was down 0.04 per cent at 37,255.08. The S&P 500 index was up 0.26 per cent at 4,751.31, while the Nasdaq composite was up 1.16 per cent at 15,030.08.
A rally in some of the world’s largest technology companies fuelled a rebound in U.S. stocks, with traders also weighing the latest economic data including jobless claims numbers that came in lower than expected and Fedspeak for clues on the United States central bank’s next steps.
While the market enjoyed a “decent rebound” Thursday, more data is needed to justify the optimism, according to Craig Erlam at Oanda.
“There’s clearly a desperate desire to cling on to the optimism that enabled such a strong end to the year, but unlike in that period, the data isn’t really playing ball,” Erlam noted.
The Canadian dollar traded for 74.02 cents US compared with 73.95 cents US on Wednesday.
The March crude oil contract was up 1.83 per cent at US$73.89 per barrel and the February natural gas contract was down 12 cents at US$2.75 per mmBTU.
The February gold contract was up 0.49 per cent at US$2,016.40 an ounce and the March copper contract was unchanged at US$3.73 a pound.
The Canadian Press, Bloomberg
Birchcliff cuts dividend due to low natural gas prices
Shares of Birchcliff Energy Ltd. fell more 10 per cent in early trading after the company cut its quarterly dividend in half and lowered its expectations for capital spending and production for the year.
Birchcliff chief executive Chris Carlsen says the company is reducing its payment to shareholders in order to protect its balance sheet during what he says is a current period of low natural gas prices.
The company says it will pay a quarterly dividend of 10 cents per share, down from 20 cents per share.
Birchcliff also says it now plans $240 million to $260 million in finding and development capital spending for the year, while annual average production is expected to remain relatively flat in 2024 at 74,000 to 77,000 barrels of oil equivalent per day.
The outlook compares with Birchcliff’s preliminary estimate released in November for $260 million to $280 million in finding and development capital spending and annual average production of 77,000 to 79,000 boe/d for 2024.
Shares in the company were down 68 cents at $5.06 in trading on the Toronto Stock Exchange.
The Canadian Press
Surge of Ukrainians expected to come to Canada in the next few months
Settlement agencies are preparing for a surge of Ukrainians arriving in Canada before emergency visas for those fleeing the Russian invasion expire at the end of March.
The federal government has issued more then 930,000 temporary emergency visas since March 2022 for Ukrainians who want to work or study in Canada while the wait out the war.
So far, about 210,000 people have actually made the journey to Canada.
Operation Ukraine Safe Haven says pre-arrival surveys show as many as 90,000 more emergency visa holders are thinking of coming before the deadline.
The group’s executive director Sarosh Rizvi says the biggest challenge is finding those people places to live, especially as public interest has waned, along with offers from families to open their homes to new arrivals.
The organization is trying to encourage people who choose to come before the deadline to consider settling in smaller communities where housing is easier to find and more affordable.
The Canadian Press
Markets open: Wall Street and TSX holding steadier
Wall Street is holding steadier Thursday as yields stabilize in the bond market following a jump earlier in the week.
The S&P 500 was 0.4% higher in early trading, coming off a back-to-back loss. The Dow Jones Industrial Average was down or 0.14 per cent, and the Nasdaq composite was 0.79 per cent higher.
Big Tech stocks were strong including a 2.3 per cent rise for Apple.
Stocks were broadly steadier as Treasury yields in the bond market slowed their jump from earlier in the week. Yields had been climbing as traders pushed back their forecasts for how soon the Federal Reserve will begin cutting interest rates. Higher yields in turn undercut prices for stocks and raise the pressure on the economy.
The Fed has indicated it will likely cut rates several times in 2024 because inflation has been cooling since its peak two summers ago, meaning it may not need as tight a leash on the economy and financial system. But critics said Wall Street’s expectations went overboard in how many cuts the Fed would deliver this year and how soon it would begin. That in turn may have sent stock prices too high and Treasury yields too low since their big moves began last autumn.
In Canada, the S&P/TSX composite index was up 0.06 per cent.
The Associated Press
Stock markets before the opening bell
Stocks and United States futures gained on Thursday as traders turned their attention to corporate news after coming to terms with the realization that rate cuts may be delayed beyond the first quarter.
Futures on the Nasdaq 100 and S&P 500 rose 0.6 per cent and 0.3 per cent respectively. The Stoxx Europe 600 index edged higher, having slumped almost two per cent in the first three days of the week. China’s benchmark CSI 300 index gained 1.4 per cent as a surge in ETF trading pointed toward state funds’ involvement.
Chipmakers gained in U.S. premarket trading after Taiwan Semiconductor Manufacturing Co., the main supplier to Apple Inc. and Nvidia Inc., said it expects a return to solid growth this quarter. Microchip Technology Inc., Advanced Micro Devices Inc. and ON Semiconductor Corp. added more than two per cent each. The Boeing Co. rose after winning an order for 150 of its troubled 737 Max jets from India’s newest airline.
Signs that European policymakers are converging around a June rate reduction helped calm markets, along with indications that Chinese state funds are coming to the rescue of equities battered by a flagging economy.
“The medium-term outlook should still be positive for markets as rates will be cut this year,” said Max Wolman, an investment director at abrdn in London. “Timing of the cuts is less relevant because when they start investors will reduce their cash holdings back into risky assets.”
In Canada, the S&P/TSX composite index closed down 1.21 per cent on Wednesday.
What to watch today
Natural Resources Minister Jonathan Wilkinson will provide a keynote address followed by a fireside chat at the B.C. Natural Resources Forum in Prince George, B.C.
Canadian construction investment data for November will be released this morning. In the United States, expect initial jobless claims and housing starts and building permits for December.
First Horizon National Corp. and Richelieu Hardware Ltd. report earnings today.
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Additional reporting by The Canadian Press, Associated Press and Bloomberg
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