The ChatGPT logo in an illustration.DADO RUVIC/Reuters
Getting caught up on a week that got away? Here’s your weekly digest of the Globe’s most essential business and investing stories, with insights and analysis from the pros, stock tips, portfolio strategies and more.
Tech companies are thanking Generative AI for high profits, low costs
The arrival of generative AI “has been heralded as a step-change equivalent to the spread of the internet in the 1990s or smartphones in the 2000s.” Ever since OpenAI released ChatGPT in November, 2022, tech companies everywhere are looking to capture its potential benefits. In fact, generative AI has already started to save companies millions by upending workflows, changing hiring plans and shifting investment criteria. And the enthusiasm shows little sign of abating. Sean Silcoff and Joe Castaldo spoke to some Canadian companies about both the pitfalls and opportunities.
Sam Mizrahi and Jenny Coco’s condo project in Toronto put into receivership
A high-profile condo development in Toronto was put into receivership due to $1.6 billion in unpaid debt. The One, a luxury condo project co-owned by real-estate developer Sam Mizrahi and road paving magnate Jenny Coco, was marketed as Canada’s tallest condo building, with 85 storeys of condos, hotel and retail, but the project has been materially delayed and is significantly over budget. KEB Hana Bank, a commercial bank based in South Korea and The One’s main lenders, asked the court to appoint an outside group to manage the project and oversee its development – or they won’t extend the next payment on the project. The Ontario Superior Court approved the request, and Alvarez & Marsal Canada Inc. has taken over, Tim Kiladze and Rachelle Younglai report.
Canadian businesses and consumers on where wages are headed
Wages are increasing, but that might be bad news for the Bank of Canada. Last month, the average hourly wage rose 5 per cent from the year before – a level the bank says is “inconsistent” with getting inflation under total control. Jason Kirby reports that fast-rising wages can stoke inflation by increasing the costs faced by companies and fuelling spending. In the meanwhile, many Canadian businesses and consumers are wondering: what will happen to wages over the next year? The answers were mixed. Get a closer look in this week’s Decoder.
Canada’s inflation rate dips in September
Some good news on the inflation front. Canada’s inflation rate dipped to 3.8 per cent in September, and came in lower than expected – a sign that the Bank of Canada might not continue hiking interest rates on Oct. 25. Matt Lundy reports that there were widespread improvements in September. Grocery prices rose 5.8 per cent on an annual basis, down from 6.9 per cent in August. Airfares were down 21.1 per cent in September compared to this time last year, and passenger vehicle prices are growing at a slower pace.
Scotiabank reduces its global work force
Bank of Nova Scotia is the latest major Canadian bank to announce staff layoffs. Canada’s fourth-largest lender said it is cutting three per cent of its global work force as it prepares to unveil an overhaul strategy. Earlier this year, Royal Bank of Canada and Bank of Montreal quietly trimmed their teams as the lenders faced mounting expenses and rising provisions for potential loan defaults. Scotiabank’s restructuring plans mark chief executive officer Scott Thomson’s first major move to slash costs since taking on the top job in February, Stefanie Marotta reports.
TFSAs are a smash hit with Canadians, but some people are wrongly putting money in RRSPs
Are you using your TFSA and RRSP in the correct ways? Rob Carrick offers a quick primer on the differences. He writes that “saving money in an RRSP or TFSA is a net positive, but there are consequences if you don’t get the choice right.” According to a recent Retirement and Savings Institute study, contributions into the “wrong” savings account can lower your return on savings. The study found that almost half of all households have a TFSA and that 36 per cent have both TFSAs and RRSPs.
Now that you’re all caught up, test your knowledge with our weekly business and investing news quiz and prepare for the week ahead with the Globe’s investing calendar.
Ready to think about your (eventual) financial freedom?
Retire Rich Roadmap is a 5-part newsletter course to set you up with the tools you need to think about retirement, whether that's happening now or in a few decades. Sign up now – each lesson will land in your inbox on Thursday.