Posthaste: More layoffs in cannabis country, Jeff Bezos’ wealth crown at risk and Alberta’s ’credible plan’ to get back to black
Here’s what you need to know this morning:
More layoffs in Canada’s cannabis sector this morning. Embattled grower Canntrust Holdings Inc announced that it was laying off 140 workers, a quarter of its workforce, between late October and the end of the year. Canntrust lost its licence to produce and sell cannabis in September, months after Health Canada found it was growing pot in illegal spaces. The Ontario-based producer also said earlier this month that it would destroy about $12 million worth of plants and about $65 million worth of inventory, as it seeks to get its licence back. It plans to rehire when it regains regulatory compliance. The news follows staff cuts at Quebec-based cannabis producer Hexo, which announced yesterday it was slashing 200 jobs across the company, including some executives. Hexo shares have fallen over the past few weeks after it issued a revenue warning. The company cut its forecast for the quarter ending July 31, by about 40%.
Alberta unveiled its austerity budget last night, and some analysts are saying it didn’t disappoint. The first budget of the United Conservative Party contains a 2.8% cut to operating expenses over the next four years and 7.7% reduction in the size of the public service. Next year, the province expects to cut 764 jobs. It will, however, keep the planned reduction in corporate income taxes. RBC senior economist Robert Hogue says the oil price crash five years ago forever changed Alberta’s fiscal outlook. “A sharp rebound can no longer be counted upon to balance the books. The plan presented today by Finance Minister Travis Toews was built on the sober assessment that new realities necessitate forceful action.” Fulfilling the plan will take “courage and resolve”, Hogue wrote in a note, “but at last, Alberta has a credible plan at hand to make significant inroads.”
Jeff Bezos may be about to relinquish his title of the world’s richest person. Amazon shares shed 8.1% to US$1,637 in late trading last night after it reported its first year-over-year profit decline since 2017. At that price Bezo would have a net worth of US$102.8 billion, ranking him second, and almost US$5 billion behind Bill Gates, according to the Bloomberg Billionaires Index. The ranking officially updates at close today. Investors were unhappy after Amazon forecast revenue and profit for the holiday quarter below expectations as it made big investments in one-day delivery. Costs for that program are expected to nearly double to US$1.5 billion during the holiday season. The stock is trading at US$1,680 before the bell, so we shall see how Bezos’ fortunes fare.
Alberta Finance Minister Travis Toews discusses the provincial budget and its impact on the business sector in Calgary
Bennett Jones luncheon in Toronto with John Baird, Christy Clark and John Manley to discuss what the 2019 election results will mean for public policy and the business community
Fifteen Canadians from across the country announce in Vancouver a lawsuit against the federal government of Canada for contributing to high levels of greenhouse gas emissions and dangerous climate change
Rod Phillips, Ontario Minister of Finance, will deliver a keynote address to the Kitchener-Waterloo Chamber of Commerce. Notable earnings: Shaw Communications, Verizon, Domtar Corp., Glencore PLC
Canada’s housing affordability crisis has been building for years, say the real estate experts with the Haider-Moranis bulletin. Housing starts are considered a leading indicator because they tend to decline ahead of economic slowdowns and rise ahead of recovery, but the pace of the decline is often rapid, while the recovery is slow. As the chart below shows population growth has increased steadily since the late 1990s, but housing growth has been less consistent. The decline in housing production during slowdowns creates a deficit that is compounded over successive economic downturns. To address the current shortfall tens of thousands of homes must be built at an accelerated pace that are affordable to the middle class, says Haider-Moranis. They see the NDP’s plan to fast-track the construction of 500,000 homes as a good place to start, making the party an ideal partner for the Liberal minority government to launch a badly-needed new national housing strategy.