Canada loses 68,000 jobs in September as steel dispute escalates

OTTAWA — Canada's economy lost 68,000 jobs in September, marking a second consecutive month of losses, according to Statistics Canada.

The unemployment rate edged up slightly to 6.5 per cent last month, back to where it stood at the start of the year in January.

Statscan said the job losses were nearly evenly split between full- and part-time work and were concentrated in the public sector.

READ MORE: Canada loses 68,300 jobs in September, erasing all gains for the year

READ MORE: U.S. job growth expected to slow in September after August surge

This is the fourth consecutive month showing a decline in the public sector, which is down 119,000 jobs year-over-year.

The September jobs report is one of the first major economic releases since the trade dispute between Canada and the United States ratcheted back up.

It also marks the Bank of Canada's last look at the labour market before its next interest rate decision set for Oct. 28.

Economists had expected a gain of 9,200 jobs in the month.

Meanwhile, Industry Minister Mélanie Joly has issued Cleveland-Cliffs Inc. an ultimatum to comply with its employment guarantees under the Investment Canada Act or face possible legal action.

The Stelco parent company said it began exporting tonnes of steel slab from Canada to the U.S. earlier this year, leaving its Hamilton plant without inputs to produce galvanized steel for Canadian customers.

Cleveland-Cliffs Inc.'s decision to lay off up to 500 workers in Canada is facing much contempt from both Ottawa and Canadian buyers of galvanized steel.

Industry Minister Mélanie Joly said Wednesday Stelco's owner Cleveland-Cliffs cannot use the trade war to justify cutting jobs it committed to when it bought the Hamilton, Ont.-based steel plant, particularly when the head of its U.S. parent company has publicly backed steel tariffs.

Cleveland-Cliffs Inc. chief executive Lourenco Goncalves dismissed the idea of nationalizing Stelco.

When asked if he would entertain an offer from Ottawa to buy Stelco, Mr. 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.

Yadude Books reported in September that Stelco plans to idle part of its Hamilton plant and lay off hundreds of workers.

Weston family buys Boots chain

The Weston family is acquiring drug-store chain Boots for US$8.9-billion, including assumed debt, with financial backing from Fairfax Financial Holdings Ltd.

The family's Toronto-based holding company, Wittington Investments Ltd., is buying the 1,800-store Boots chain from U.S. private equity fund Sycamore Partners.

Boots dominates the market for pharmacies in the United Kingdom, with 51,000 employees, a strong brand and stores located close to 80 per cent of the 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," Galen Weston, chairman of Wittington and Loblaw, said in an e-mail to The Globe and Mail.

Mr. Weston will become the chair of Boots after the acquisition closes.

Wittington previously owned U.K. high-end department store Selfridges from 2003 to 2021.

In other business news, Halifax-based Emera Inc. unveiled a bold plan to build a national champion in the utility sector by merging with Calgary-based Canadian Utilities Ltd. and its parent ATCO Ltd.

Emera announced on Tuesday a friendly all-stock offer in a deal that would create one of the 20 largest utilities in North America.

The combined companies would have an enterprise value of $72-billion, which the three companies said would rank as one of the largest mergers in Canadian history.

The transaction unites Emera gas and electrical networks in Nova Scotia, Florida and the Caribbean with Canadian Utilities' operations in Alberta and Australia.

The bulked-up company would be well positioned to compete with U.S. rivals vying for the massive projects driven by a fast-growing demand for energy.

With files from The Globe and Mail