Canada loses 68,000 jobs in September as steel layoffs prompt federal ultimatum
The job losses were concentrated in the public sector and come as Ottawa warns Stelco's U.S. owner over layoffs.
Statistics Canada reported the economy shed 68,000 jobs in September, a second straight month of losses that defied economists' expectations of a gain. The unemployment rate ticked up to 6.5 percent, returning to its level from January. The losses were concentrated in the public sector, which has now declined for four consecutive months and is down 119,000 positions from a year ago. The report provides a key labour market snapshot for the Bank of Canada ahead of its next interest rate decision on Oct. 28.
In a separate industrial dispute, Industry Minister Mélanie Joly issued an ultimatum to Cleveland-Cliffs Inc., the U.S. owner of Stelco, over its plan to lay off up to 500 workers in Canada. Joly said the company cannot use the ongoing trade tensions to justify cutting jobs it had committed to when it bought the Hamilton steel plant. She warned Cleveland-Cliffs to comply with its employment guarantees under the Investment Canada Act or face possible legal action. Cleveland-Cliffs said it began exporting steel slab from Canada to the U.S. this year, leaving its Hamilton facility without the inputs needed to produce galvanized steel for Canadian customers. The company's chief executive, Lourenco Goncalves, dismissed suggestions the federal government could nationalize Stelco. When asked if he would entertain an offer from Ottawa to buy the plant, Goncalves replied that "the only thing that makes sense for us as a business" is the Canadian government signing a "Fortress North America" trade deal with the U.S.
In a major retail acquisition, the Weston family's holding company, Wittington Investments Ltd., is buying the U.K. pharmacy chain Boots for US$8.9 billion, including assumed debt. The deal, backed by Fairfax Financial Holdings Ltd., involves purchasing the 1,800-store chain from U.S. private equity fund Sycamore Partners. Boots employs 51,000 people and its stores are located close to 80 percent of the U.K. population. "As Canada builds stronger ties around the globe, we are delighted to welcome the UK's most iconic pharmacy, health, and beauty business into our group of companies," said Galen Weston, chairman of Wittington and Loblaw. Weston will become chair of Boots after the acquisition closes. Wittington previously owned the U.K. department store Selfridges from 2003 to 2021.
Halifax utility Emera Inc. announced a plan to merge with Calgary-based Canadian Utilities Ltd. and its parent ATCO Ltd. in a friendly all-stock deal. The combined entity would have an enterprise value of $72 billion, ranking among the largest mergers in Canadian history and creating one of the top 20 utilities in North America. The merger would unite Emera's operations in Nova Scotia, Florida and the Caribbean with Canadian Utilities' networks in Alberta and Australia. In technology, a growing effort to train AI-powered robots involves paying gig workers to record video of themselves doing household chores. Workers can download an app, strap a smartphone to their forehead, and record tasks like folding laundry or cooking a meal. Some platforms pay US$3 for every accepted hour of footage, rejecting videos if hands are out of frame or the recording is too shaky. One customer for this data is 1X Technologies, which is building a domestic humanoid robot. The Canadian startup Mecka AI, which collects such video for robotics training, has raised more than US$120 million and projects a revenue run rate of US$300 million by year's end.
With files from The Globe and Mail