June 10, 2023

Lowe’s exits Canada, interest-free student loans and more temporary foreign workers: must-see stories on business and investing

US hardware giant Lowe’s has sold its Canadian retail operations, which include 450 stores, to New York private equity firm Sycamore Partners for $400 million in cash.Mark J. Terrill/The Associated Press

Are you caught up in the week that went by? Here’s a weekly roundup of the Globe’s top business and investment stories, insights and analysis from the pros, stock tips, portfolio strategies and more.

Lowe’s gets rid of Rona and Canadian operations

U.S. hardware giant Lowe’s is selling its Canadian retail operations — about 450 stores operating under the Lowe’s, Rona, Reno-Depot and Dick’s Lumber banners — after a disappointing six-year run. Nicolas Van Praet reports that the buyer is New York private equity firm Sycamore Partners, which will buy the stores for $400 million in cash plus unspecified performance-based benefits. Lowe’s entered the Canadian market in 2007 and expanded its footprint in 2016 by acquiring Rona for $3.2 billion. The sale is an admission for the company that it could not make the takeover work. Business has been struggling, and Lowe’s has cut jobs and closed dozens of stores in several states. For Rona, the sale is likely to mark another period of turbulence as Sycamore tries to improve its financial situation and attract new owners.

Interest-free student loans among the highlights of taxation

The federal government released its fall economic survey this week, acknowledging what worries many Canadians as they grapple with affordability challenges: the country’s growing odds of a recession. Matt Lundy writes that Ottawa outlined a number of risks to the economic outlook, including a “more aggressive” response from the U.S. Federal Reserve to inflation through higher interest rates and “widespread volatility” in stock and bond markets. One of the highlights is a proposal to make all Canada Student Loans and Canada Apprenticeship Loans permanently interest-free, including currently outstanding loans. The change, which would begin April 1, 2023, would cost $2.7 billion over five years and just over $550 million annually thereafter.

Sorry seniors, inflation is far from over

One of the biggest threats to a comfortable retirement is inflation, writes Frederick Vetesse. Previous waves of high inflation lasted about four years, suggesting that the current wave of price explosions seems to have no end in sight.

Employers are hiring more temporary foreign workers to fill low-wage jobs

Canadian companies are increasing their use of the temporary foreign worker program following a federal government expansion to fill low-wage jobs to ease labor shortages. As Matt Lundy reports, employers were approved to hire about 45,200 jobs through the TFW program in the second quarter of this year—the most since at least 2017. The April-June quarter is usually a slower approval period, but this past spring was booming: TFW approvals were over double compared to the corresponding period in 2018 and 2019. Companies can now hire up to 20 percent of their staff through the low-wage stream of the TFW program, up from the previous 10 percent. centimeter cap. And for seven industries with acute labor shortages — such as restaurants, construction and hospitals — the cap was pushed to 30 percent for a year.

An affordable trap for Toronto and Vancouver

Are you young living in Toronto or Vancouver? You should consider moving to a cheaper city. Without six-figure incomes or wealthy parents, every 20- and 30-something should question whether they have a future in Canada’s two biggest cities — including home ownership, writes Rob Carrick. It’s a challenge to escape the pull of these cities, especially during career development, but intra-Canada migration shows that people are starting to rebel against the high cost of living that comes with a Toronto or Vancouver address. According to Statistics Canada, more people left Ontario than moved there in the past year.

Dragons’ Den’s Arlene Dickinson Announces ‘Super Company’

Veteran financier Arlene Dickinson of Dragons’ Den fame announced this week that she is merging her marketing and communications firm with five other agencies to create a larger international firm backed in part by the Canadian Business Growth Fund. The new company, called Believeco:Partners, has nearly 300 employees in seven offices across North America and serves clients in a variety of industries, including technology, food, health, agriculture, management and financial services, Temur Durrani reports. It brings together Ms. Dickinson’s agency Venture Play with leading Canadian marketing firms Argyle, Brightworks, Zync, Revolve and Castlemain. “There are currently six companies coming together, but we definitely have plans to buy other independent companies in the future,” Ms Dickinson told The Globe and Mail.

MoneyTok, FinTok, Join The Globe on TikTok

The Globe and Mail is now on TikTok, with new personal finance-focused videos being released a couple of times a week, hosted by Michelle da Silva and Mathilde Augustin. Download the app and follow us for money tips, career advice, investment ideas and more.

Now that it’s all wrapped up, prepare for the week ahead with Globe’s investment calendar.

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