WestJet and its pilots’ union reached a last-minute deal on Friday, averting a strike during the May long weekend.Jeff McIntosh/The Canadian Press
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.
WestJet pilot strike averted
WestJet and its pilots’ union reached a last-minute deal on Friday morning, averting a strike during the May long weekend. Eric Atkins reports that the airline and the Air Line Pilots Association have agreed to a tentative four-year deal that provides double-digit raises and better working conditions. The contract, which must be ratified by WestJet’s 1,800 pilots, makes the company’s pilots the highest paid crews on narrow-body aircraft in Canada. Over the last few days, WestJet had preemptively cancelled hundreds of flights and grounded the majority of its Boeing 737 and 787 fleet. The shutdown affected dozens of routes within Canada and to the U.S. and overseas. The airline said it’s ramping up again as quickly as possible, but warned that the full resumption of operations will take time.
Mortgage payments could spike as much as 40 per cent, BoC says
Mortgage payers are about to feel the sting of higher interest rates. Rachelle Younglai and Mark Rendell report that mortgage borrowers will see a spike of 20 to 40 per cent in their monthly payments when they renew their loans over the next few years, according to Bank of Canada estimates. The central bank said about one-third of Canadian mortgages have already seen an increase in payments. Given the current landscape of a robust job market and low unemployment, Bank of Canada said that higher mortgage payments “should be manageable for most households.” However, the impact will be more significant for some households as “pockets of strain are emerging.”
Business insolvencies are at a 12-year high
In more fallout from higher interest rates, business insolvencies in Canada are soaring to the highest level since 2011 – and some economists warn of further pain ahead. March saw the number of insolvencies up 37 per cent from the same period the year before. Insolvencies returned to their prepandemic trend in early 2022 after a steady drop in the number of business failures during the pandemic – due in part to the gush of government stimulus spending. Jason Kirby takes a closer look in this week’s Decoder.
Inflation ticks slightly higher in April
Canada’s inflation rate ticked up in April as a variety of costs – including gasoline, rents and mortgage interest – contributed to the first acceleration since last summer. The Consumer Price Index rose 4.4 per cent from a year earlier, following a 4.3-per-cent increase in March. According to Matt Lundy, the latest numbers suggest that wrestling inflation back to the Bank of Canada’s 2-per-cent target could be a long and bumpy journey. Though, the central bank is widely expected to hold its policy rate at 4.5 per cent at the next decision on June 7 despite the inflation uptick.
Ottawa, Ontario in stalemate over Stellantis EV battery factory
A standoff over subsidies between Ottawa and Ontario has dramatically escalated this week that has halted construction of Canada’s first electric-vehicle battery plant. Stellantis and LG Energy Solution, the companies behind the project, announced on Monday they have stopped all construction on the $5-billion project in Windsor, Ont. Adam Radwanski and Laura Stone report that the issue is money – specifically how much additional government funding will be made available to the project. The federal government is calling on Ontario to pay its “fair share,” but the province says it’s up to the federal government to honour its commitments. A move to potentially end the stalemate came on Friday when Ontario Premier Doug Ford said the province is prepared to give more money to keep the battery plant.
In a hybrid work world, Toronto’s downtown core faces an existential crisis
A man works from the lobby of the Bay-Adelaide Centre on May 8.Ammar Bowaihl/The Globe and Mail
Toronto’s downtown appears to be stuck in a partial recovery as hybrid work becomes more entrenched. According to Oliver Moore, city officials, business leaders and urbanists are raising concerns about the future of the city’s financial district that powers the core of the city. Fewer commuters - who mainly opt to come in on Tuesdays, Wednesdays and Thursdays - starve transit agencies of revenue and less pedestrian traffic on the sidewalks can make the area feel less safe. These problems, however, are not unique to Toronto. Downtowns everywhere are facing the existential question - what is their role now?
Now that you’re all caught up, prepare for the week ahead with the Globe’s investing calendar.