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Greater Niagara Chamber of Commerce

Daily Update: November 29, 2022

Economy grows 0.7% in Q3, marking 5th consecutive quarter, employer applications open for 2023 Canada Summer Jobs Grant, and more.

In this edition:

Economy grows 0.7% in Q3, marking 5th consecutive quarter

Real gross domestic product (GDP) rose 0.7% in the third quarter, the fifth consecutive quarterly increase. Growth in exports, non-residential structures, and business investment in inventories were moderated by declines in housing investment and household spending. Final domestic demand, composed of expenditures on final consumption and capital investment, edged down 0.2%, following a 0.6% increase in the second quarter.

Housing investment (-4.1%) declined for the second consecutive quarter, coinciding with higher interest rates. Renovations (-6.6%) were down for the second consecutive quarter, and resale activities (-13.8%) were down for the third consecutive quarter. These declines were partly offset by new construction (+2.4%), which rose after four quarters of decreases.

Household spending edged down 0.3% in the third quarter, the first decline since the second quarter of 2021. The decrease was mainly attributable to widespread declines in goods (-1.7%).

Compensation of employees rose 1.2% on a nominal basis, as both employment and average earnings were up. Even so, this was the lowest growth in wages and salaries since the second quarter of 2020, when compensation declined sharply.

Real gross domestic product (GDP) edged up 0.1% in September. Growth was led by goods-producing industries (+0.3%), while services-producing industries were essentially unchanged.

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Employer applications open for 2023 Canada Summer Jobs Grant

Today, the Minister for Women and Gender Equality and Youth, Marci Ien, announced the launch of the employer application period for the Canada Summer Jobs (CSJ) 2023 program. Not-for-profit organizations, public sector employers, and private sector employers with 50 or fewer full-time employees can apply for funding now until January 12, 2023, to hire young Canadians next summer. Full-time job placements will become available starting in April 2023.

Employers interested in applying for CSJ 2023 funding can submit their applications electronically via either the online fillable application or the Grants and Contributions Online Service. The online fillable application is the fastest way for employers to submit an application online, while the Grants and Contributions Online Service requires the user to create an account before submitting an application for CSJ.

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Royal Bank agrees to buy HSBC’s Canada unit for $13.5B

Royal Bank of Canada agreed to buy HSBC Holdings Plc’s Canadian unit — the country’s seventh-largest bank — for $13.5 billion in cash, expanding its roster of business clients and bulking up its retail presence on the West Coast as HSBC focuses on Asia.

The purchase gives Royal Bank, already Canada’s largest bank by assets, about 130 more branches, including about 45 in the West Coast province of British Columbia. The Toronto-based company also gains a significant commercial-banking franchise, with many of the clients in industries that trade and bank internationally.

The Office of the Superintendent of Financial Institutions (OSFI) will administer the application process and provide a recommendation to the Minister of Finance. As stipulated in the Bank Act, all acquisitions and amalgamations in Canada’s banking sector are subject to the approval of the Minister of Finance, who must take into account all matters she considers relevant.

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Minister Ng announces Business Development Bank of Canada legislative review

Today, the Honourable Mary Ng, Minister of International Trade, Export Promotion, Small Business and Economic Development, launched a public consultation on the provisions of the Business Development Bank of Canada Act (BDC Act). Members of the public and organizations alike are invited to provide their input as part of the statutory review of the legislation.

The BDC Act requires that the Minister of International Trade, Export Promotion, Small Business and Economic Development, together with the Minister of Finance, conduct a legislative review of the BDC Act every 10 years.

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Bryan Heit returns to Regional Council to fill Chair Bradley’s seat

Former Niagara regional Coun. Brian Heit, who was edged out of a seat in the fall municipal election, is being sent back to the region by St. Catharines city council.

City councillors appointed Heit, the next-place finisher in the Oct. 24 election, to fill a vacancy on regional council Monday night.

The vacant seat was created on Nov. 24 when St. Catharines regional Coun. Jim Bradley was appointed Niagara Region’s chair for a second term.

Regional councillors still have to formally approve the city decision.

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Focus on Finance & Economy

Canadian dollar tumbles as economic data show signs of slowdown

Canada’s dollar slumped Tuesday – at one stage falling by the most in more than a month — even as major peers like the Australian and New Zealand dollars gained ground against the greenback.

The currency was weighed down by signs that the domestic economy is wavering, although the scale of the move relative to major peers had some wondering whether the shifts were more a function of flow and market dynamics than a drastic rethink of the overall outlook.

The tumble also came in the wake of news that British bank HSBC Holdings Plc plans to sell its Canadian unit to Toronto-based Royal Bank of Canada, a transaction that could potentially spur outflows, while preliminary data for October showed the nation’s economy appears to be stalling out and crude oil prices handed back much of their earlier gains. With month-end drawing near, positioning dynamics could also be playing a role, analysts suggested.

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Economists see underlying signs of weakening in third quarter GDP numbers

Canada saw stronger than expected economic growth in the third quarter, but economists warn the underlying numbers don’t paint such a positive picture.

Statistics Canada said Tuesday the economy grew at an annualized rate of 2.9 per cent between July and September.

That compares with 3.2 per cent growth in the second quarter.

Although the headline growth rate is significantly stronger than forecasters had anticipated, the fall in consumer spending suggests higher interest rates are beginning to affect the economy more broadly.

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Through the Daily Updates, the GNCC aims to deliver important business news in a timely manner. We disseminate all news and information we feel will be important to businesses. Inclusion in the Daily Update is not an endorsement by the GNCC.

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