Here are five things you need to know this morning:
Kovrig warns Canadian businesses on China
Michael Kovrig has some advice for Canadian businesses and investors for how they should deal with China: don’t do it unless you have to. That was the broad message from Kovrig in a lengthy interview with BNN Bloomberg’s Jon Erlichman, set to air this morning. The former Canadian diplomat, who was detained by Chinese authorities for more than 1,000 days on trumped up allegations, says Canadian businesses and investors need to think long and hard about the risks and rewards of dealing with China as security concerns and tense geopolitics now outweigh whatever benefits there were to doing business with and in the country. The economic whizzes who guided China’s economy to become the world’s second largest are no longer the decision makers, he said, as political bureaucrats more concerned with strengthening the country’s influence on the world stage are now calling the shots, according to Kovrig. Against that backdrop, Kovrig says Canada’s economy needs to get onside with the country’s political alignment. “China and Russia are increasingly aligned with each other and pursuing an agenda that is hostile not only to our economies but to our democracy,” he said. “Business needs to increasingly be thinking … Am I supporting a regime that is ultimately going to be hostile to my own broader interests as a citizen … and as an investor.”
China unveils massive stimulus package
Free market economics may not be the chief concern in Beijing, but that doesn’t mean the country isn’t worried about the state of their economy, and there’s ample reminders of that this morning. The country has unveiled its biggest stimulus package since the pandemic, with the central bank slashing its key lending rate and lowering the amount that banks must hold in reserve to its lowest level since 2018. Those moves follow other decisions to lowerborrowing costs on more than five trillion in mortgages, to help backstop the reeling residential property market. China has previously forecast that it expects the country’s economy to grow by about five per cent this year, but recent data suggests it is in danger of falling well short of that target. And if it happens, it will be the second time in three years that it’s done so. The slew of policies unveiled today are likely to help, but the real estate crisis is so entrenched and consumer spending is lagging enough that it’s a fair question to ask whether it will be enough.
Steady drip
Canada’s Competition Bureau has won a key court battle against movie theatre chain Cineplex over the new policy that the latter announced in 2022 to start charging a $1.50 fee for booking tickets online. According to the bureau, the levy is nothing less than drip pricing,a misleading marketing tactic that offers a consumer a certain price for a product that is secretly impossible to get because of the steady drip, drip, drip of added fees along the buying process. The bureau has previously fought battles against the car rental and event ticketing industries on similar grounds. The Competition Tribunal --a quasi-legal body that judges the bureau’s cases -- agreed with the bureau’s argument and has ordered Cineplex to pay a fine of $38.9 million plus legal costs, the amount that Cineplex collected from consumers between June 2022 when the policy was implemented and December of last year, when the bureau started its probe. The tribunal win “sends a strong message that businesses should not engage in drip pricing and need to display their full prices upfront,” Competition Commissioner Matthew Boswell said in a release. Cineplex, for its part, says it plans to appeal.
Climate change is going to cost you
The soaring cost and difficulty of insuring against climate risks may force people to relocate, the head of Canada’s top banking regulator has warned. Peter Routledge, the head of the Office of the Superintendent of Financial Institutions, told a Vancouver business audience yesterday that growing instances of extreme weather events like wildfires and floods are not a concern for Canada’s economy on the regulatory side, but they are very much one on the cost side of things. “Some areas are higher cost, and businesses or homes that are there in those areas may have to endure higher costs, or they may have to move,” Routledge said at the National Insurance Conference of Canada. Asked whether property in certain parts of Canada might become prohibitively expensive or impossible to insure, Routledge said there’s been a pullback in the availability of earthquake insurance in British Columbia, and certain flood insurance products may be tightened.
Boeing makes ‘final offer’ of 30 per cent raise to striking workers
Boeing has made what it is calling its best and final offer to 33,000 striking workers, hoping to bring an end to the week-long walkout. The company is offering a 30 per cent raise. That’s better than the 25 per cent that was previously on the table, but still short of the 40 per cent that workers were asking for. The aerospace giant has given the union a Friday deadline to accept the offer, in a move to end the impasse that has been at a standstill since Sept. 18 when mediation broke down.