Author: Consultant

For two months Canada’s most closely watched survey of the job market has reassuringly signalled that a rebound in manufacturing employment is under way.

Actual employer payrolls suggest that growth was an illusion.

In September, Canada’s manufacturing sector shed more than 9,500 jobs from the month before, the ninth straight monthly decline this year, according to Statistics Canada’s survey of employment, payrolls and hours, released Thursday.

It’s a stark contrast from the agency’s Labour Force Survey (LFS), which polls households about their employment status and is more current.

In October, employment in the manufacturing sector was up by 36,500 jobs from August, according to the LFS, and had largely rebounded from declines after U.S. President Donald Trump’s broad tariffs on Canada began in March.

Economists have regularly highlighted the growing disparity between the two surveys and what it says about the resilience of Canada’s economy to the trade war.

They’ve noted the LFS survey has not yet fully accounted for the slowdown in Canada’s population growth, which paints an excessively rosy jobs picture.

Looking at the household survey alone, “you could be forgiven for thinking that the local economy is in the midst of a surprising boom,” wrote David Rosenberg, president of Rosenberg Research & Associates, in a note to clients.

Yet the payroll survey showed overall employment tanked by 58,000 in September, he added, with the number of jobs contracting in 80 per cent of all industries that month.

Decoder is a weekly feature that unpacks an important economic chart.

The Canadian economy rebounded sharply in the third quarter, although much of the upside surprise was driven by a swing in imports and exports that masked underlying weakness in domestic demand.

Canada’s real gross domestic product grew at an annualized rate of 2.6 per cent in the third quarter, Statistics Canada reported Friday, after a downwardly revised 1.8-per-cent contraction in the second quarter.

That blew past Bay Street expectations and helped Canada avoid two consecutive quarters of GDP decline, or what some analysts refer to as a “technical recession.” However, the strong headline result had more to do with idiosyncratic trade numbers than a broad-based improvement in the economic climate.

Meanwhile, Statscan’s flash estimate showed a GDP contraction in October, suggesting the economy is struggling to maintain momentum in the face of continued uncertainty about U.S. trade policy.

While the details of the report were mixed, the strong headline number reinforced Bay Street expectations that the Bank of Canada will hold interest rates steady at its next decision announcement on Dec. 10. The central bank indicated last month that it has likely finished its monetary policy easing cycle.

Rita Trichur: As Trump meddles with the Fed, Carney must safeguard the Bank of Canada’s independence

The bounce-back in GDP was led by a large swing in Canada’s balance of trade. Imports plunged at an annualized rate of 8.6 per cent, the biggest quarterly contraction since the fourth quarter of 2022. At the same time, exports rose 0.7 per cent, led by crude oil and bitumen shipments. This followed a historic 25-per-cent contraction in the second quarter.

Because a positive trade balance (more exports than imports) adds to GDP, the drop in imports pushed up the headline number.

“Overall final domestic demand was flat in Q3, so the stronger-than-expected rebound in headline GDP more so reflects a mathematical boost from falling imports rather than underlying economic strength,” said Tony Stillo and Michael Davenport, economists with Oxford Economics, in an e-mail.

“We still think the Canadian economy is in a fragile position and expect it will struggle to grow in the near term amid US tariffs, elevated trade policy uncertainty, and much slower population growth.”

GDP growth was supported by a 12.2-per-cent annualized increase in government investment, with a focus on the military. Spending on weapon systems jumped 82 per cent in the quarter (not annualized).

There was also a 6.7-per-cent annualized pickup in residential investment, as the housing market showed signs of life after many quarters of stagnation.

At the same time, key markers of economic health remained subdued. Business investment was flat, with companies wary of making big decisions in the face of U.S. tariffs and uncertainty over the future of the continental free trade pact, which is up for review next year.

Meanwhile, consumer spending contracted slightly, driven by fewer vehicle purchases after a rush to buy cars in the second quarter.

“The Canadian economy is set to swing back in the opposite direction in Q4. Even assuming a rebound in November GDP due to temporary strike impacts holding back the prior month’s reading, growth is likely to stall,” wrote Katherine Judge, senior economist at Canadian Imperial Bank of Commerce, in a note to clients.

“While we still see the BoC as on hold in December, the trend in final domestic demand isn’t encouraging and exports showed little sign of recovering from the tariff-induced Q2 hit. Our forecast assumes that we see definitive progress on renewing CUSMA and a recovery in business confidence improving quarterly growth rates in 2026,” she said, referring to the continental trade agreement.

Statscan warned that the GDP numbers could be subject to “larger than normal revisions,” given that the agency was missing several key pieces of trade data because of the U.S. government shutdown.

Alberta and Ottawa havesigned a sweeping new energy accord that both sides say will position Canada as a global energy superpower while still working toward net-zero emissions.

The deal includes a pledge for a new bitumen pipeline to the West Coast with Indigenous co-ownership and the suspension of clean electricity regulations for Alberta with the proviso that the province increase its industrial carbon price.

The memorandum of understanding also says the federal government won’t implement its oil and gas emissions cap and, if the pipeline comes to fruition, the government would adjust the current oil tanker ban so bitumen could be exported to Asian markets.

Some Liberal MPs question sustainability of Alberta energy deal touted by Carney

The deal, which Prime Minister Mark Carney and Alberta Premier Danielle Smith signed Thursday, adds that the two sides will consult with British Columbia.

“Canada and Alberta agree to engage with British Columbia immediately in a trilateral discussion on the pipeline project, and during the potential development and construction of the bitumen pipeline referred to in this MOU, and to further the economic interests of B.C. related to their own projects of interest that involve the Province of Alberta including interties,” the MOU says.

“In addition, Canada will work with B.C. on other projects of national interest in their jurisdiction.”

The new pipeline could carry one million barrels a day and would be in addition to projects Trans MountainCorp.is pursuing to boost capacity on the system.

While B.C. supports expanding capacity on the Trans Mountain pipeline, Premier David Eby has said he’s not in favour of a new pipeline to his province’s coast – nor the idea the oil tanker ban could be lifted to support it.

He has also expressed frustration over not being at the table while Mr. Carney and Ms. Smith’s governments were hammering out the deal.

The MOU commits to working with oil sands companies to strike a deal by April on implementing the Pathways project, which focuses on carbon capture and storage, solvent-based replacements or other things that could reduce emissions intensity.

That agreement will include enforcement mechanisms to ensure those projects are built.

The fact the MOU commits Alberta to increasing its industrial carbon price marks a reversal for the province. In May, Ms. Smith froze the price at $95 per tonne,even though it was supposed to be increased to $110 per tonne in 2026 to align with federal pricing.

Now, both levels of government are committing to a new industrial carbon pricing agreement by April 1 that will see Alberta’s price ramp up to $130 per tonne.

The clean electricity regulations will be suspended in the meantime and, once a new industrial pricing agreement is reached, will be lifted entirely for Alberta.

The MOU also commits both sides to a methane equivalency agreement by April, with a 2035 target date and a 75-per-cent reduction target relative to 2014 methane emission levels.

In a news release, Ms. Smith called the MOU her province’s opportunity to take the first steps toward being a global energy superpower and prove that resource development and sustainability can co-exist.

“There is much hard work ahead of us, but today is a new starting point for nation building as we increase our energy production for the benefit of millions and forge a new relationship between Alberta and the federal government,” she said.

Which Indigenous communities would be interested or able to co-own a bitumen pipeline is unclear.

Government officials who briefed reporters on the technical aspects of the deal earlier Thursday said that had yet to be decided.

support any lifting of the oil tanker ban.

Haida Hereditary Chief Guujaaw has said there is nothing that could make the risks worth it.

“What they’re talking about is doubling production in the tar sands, the most toxic muck hole in the world. Why would anybody consider that?” he said. “And is global warming over? Is it all of a sudden okay to start increasing production again?”

The words climate and environment do not appear anywhere in the MOU, but it does commit both sides to achieving net-zero greenhouse gas emissions by 2050.

The agreement is likely to inflame tensions inside Mr. Carney’s caucus. MPs have already been raising concerns internally that the agreement amounts to the Liberals turning their backs on the fight to combat climate change. Many MPs said Wednesday they were waiting to see the full text of the agreement before providing a public reaction.

Among the projects referenced in the MOU is the construction of thousands of megawatts of artificial intelligence computing power.

Alberta is already eyeing AI data centres as a potential economic boon for the province and wants to draw in $100-billion of investment in the sector over the next five years.

With a report from Andrea Woo in Vancouver

The number of Americans filing new applications for unemployment benefits fell to a seven-month low last week, pointing to still-low layoffs, though the labour market is struggling to generate enough jobs for those out of work amid economic uncertainty.

The absence of labour market deterioration in the weekly jobless claims report from the Labor Department on Wednesday argued against the Federal Reserve cutting interest rates again next month, with inflation still elevated, economists said. U.S. central bank officials are divided over whether to lower borrowing costs further, though recent comments from top policy-makers have shifted market expectations strongly in favour of another quarter-point reduction at the Dec. 9-10 meeting.

“No one can construe any story about a surge in layoffs from this report,” said Carl Weinberg, chief economist at High Frequency Economics. “The message to the Fed from this data point is that there is no reason to rush to cut rates in December.”

Initial claims for state unemployment benefits dropped 6,000 to a seasonally adjusted 216,000 for the week ended Nov. 22, the lowest level since April. Economists polled by Reuters had forecast 225,000 claims for the latest week.

U.S. consumer confidence falls in November as view of jobs market, inflation worsens

The report was released a day early because of the Thanksgiving holiday on Thursday. Unadjusted claims jumped 25,712 to 243,992 last week. The increase, however, was less than the 32,642 rise that had been expected by the seasonal factors, the model used by the government to strip out seasonal fluctuations from the data.

Unadjusted claims soared in California and there were notable increases in Illinois, New York and Pennsylvania.

Economists say President Donald Trump’s aggressive trade and immigration policies had created an environment where businesses are reluctant to lay off or hire more workers, leading to what they and policy-makers call a “no hire, no fire” labour market. But some companies, including Amazon, are stepping up job cuts as they integrate artificial intelligence into some roles. Economists expect these job cuts could show up in the claims data next year, though filings have not always in the past increased in tandem with announced layoffs.

Despite the low level of layoffs, labour market slack is steadily rising. The number of people receiving unemployment benefits after an initial week of aid, a proxy for hiring, increased 7,000 to a seasonally adjusted 1.960 million during the week ending Nov. 15, the claims report showed. The so-called continuing claims covered the period during which the government surveyed households for November’s unemployment rate.

The government has extended the data collection period for November’s employment report, including for nonfarm payrolls, following the recently ended 43-day shutdown.

November’s employment report will be released on Dec. 16, and will include October nonfarm payrolls. There will be no unemployment rate for October as the longest shutdown in history prevented the collection of the household survey data.

U.S. stocks opened higher. The dollar gained versus a basket of currencies. U.S. Treasury prices rose.

Continuing claims increased between the October and November survey period. A survey from the Conference Board on Tuesday showed its labour market measure, which correlates with the Labor Department’s unemployment rate, worsening in November.

“The latest claims data indicate hiring remains too weak to absorb the low numbers of people losing their jobs,” said Samuel Tombs, chief U.S. economist at Pantheon Macroeconomics.

“Unemployment likely is rising faster than the claims data would usually imply, given that recent graduates who are struggling to find their first job and former federal workers who volunteered for buyout offers earlier this year are ineligible to claim.” The government reported last week that the unemployment rate increased to 4.4% in September from 4.3% in August.

Though businesses are reluctant to boost hiring, they are spending more on equipment, underpinning the economy. A separate report from the Commerce Department’s Census Bureau showed non-defense capital goods orders excluding aircraft, a closely watched proxy for business spending, jumped 0.9 per cent in September after an upwardly revised 0.9% increase in August.

Economists had forecast these so-called core capital goods orders rising 0.2 per cent after a previously reported 0.4 per cent increase in August. The report was delayed by the recently ended 43-day shutdown of the government.

Delayed report shows U.S. retail sales up slightly in September

There were strong increases in orders for computers and electronic products, electrical equipment, appliances and components as well as transportation equipment and primary metals. But orders for machinery barely rose.

There have been wild swings in core capital goods orders this year as businesses responded to Trump’s sweeping import duties. Business surveys showed the tariffs have undercut manufacturing, which accounts for 10.2 per cent of the economy. But a surge in AI investment has boosted some segments of manufacturing.

Shipments of core capital goods soared 0.9 per cent after dipping 0.1 per cent in August. Business spending on equipment increased at a robust pace in the first half of the year. Economists expect investment in equipment was solid in the third quarter.

The Atlanta Federal Reserve is forecasting gross domestic product increased at a 4.0-per-cent annualized rate in the July-September quarter. The delayed third-quarter GDP report will be released on Dec. 23. The economy grew at a 3.8-per-cent pace in the second quarter.

Orders for durable goods, items ranging from toasters to aircraft meant to last three years or more, rose 0.5 per cent in September after advancing 3.0 per cent in August.

“One thing is certain and that is this is going to be a gigantic quarter for real GDP growth, although admittedly it is only a rear-view mirror look back at the third quarter, which was before the government shutdown,” said Christopher Rupkey, chief economist at FWDBONDS.

“Whichever side of the fence you are on, Fed officials are unlikely to press hard for a Fed rate cut in December.”

Alimentation Couche-Tard Inc. says its net earnings attributable to shareholders came in at US$740.6 million during the second quarter, compared with US$708.8 million for the same period a year earlier.  This amounted to 79 cents US per share in net earnings attributable to shareholders, rising from 75 cents US during the prior year quarter.   The Laval, Que.-based company, which keeps its books in U.S. dollars, says its revenue amounted to US$17.9 billion during the period ended Oct. 12, up 2.6 per cent year-over-year from US$17.4 billion.  Total merchandise and service revenues came in at US$4.7 billion during the second quarter, rising 6.6 per cent from the same period a year earlier.  Couche-Tard CEO Alex Miller says the company reported same-store sales growth across all of its geographies for the second straight quarter.  Filipe Da Silva, Couche-Tard’s chief financial officer, says in a press release that the company bought back nearly US$900 million of its shares during the quarter. 

The fight between Nvidia and one of its loudest naysayers, investor Michael Burry, is escalating.

Following the “Big Short” investor’s series of social media posts arguing that the artificial intelligence investment boom is replaying the dotcom bubble from the 1990s, with Nvidia at the center of it, the chipmaker quietly circulated a private memo to analysts that explicitly name-checked Burry to push back on many of his claims.

“Nvidia emailed a memo to Wall Street sell side analysts to push back on my arguments on SBC and Depreciation. I stand by my analysis,” Burry said in a post on Substack, referring to stock-based compensation. “I am not claiming Nvidia is Enron. It is clearly Cisco.”

Burry has repeatedly warned that today’s AI infrastructure frenzy mirrors the late-1990s telecom buildout far more than the dot-com wipeouts investors remember. He pointed to massive capex plans, extended depreciation schedules and soaring valuations as evidence that markets are again mistaking a supply boom for durable demand.

The Nvidia memo, first reported by Barron’s, responded to Burry’s criticism towards Nvidia’s stock-based compensation dilution and stock buybacks.

“NVIDIA repurchased $91B shares since 2018, not $112.5B; Mr. Burry appears to have incorrectly included RSU taxes,” the memo said. “Employee equity grants should not be conflated with the performance of the repurchase program. NVIDIA’s employee compensation is consistent with that of peers. Employees benefitting from a rising share price does not indicate the original equity grants were excessive at the time of issuance.“

The memo also disputed Burry’s claims around depreciation life. To Burry’s charge that customers are overstating the useful lives of Nvidia’s graphics processing units in order to justify runaway capital expenditures, Nvidia counters that its customers depreciate GPUs over four to six years based on real-world longevity and utilization patterns.

Nvidia added that older GPUs such as A100s, released in 2020, continue to run at high utilization rates and retain meaningful economic value well beyond the two to three years claimed by critics.

The memo also rejects Burry’s suggestion of “circular financing,” saying Nvidia’s strategic investments represent a small fraction of revenue and that AI startups raise capital predominantly from outside investors.

Today’s Cisco

Burry said he believes Nvidia now occupies the same position that Cisco — the key hardware supplier that powered a massive capital investment cycle — held in 1999-2000.

Just as telecommunication companies spent tens of billions of dollars laying fiber optic cable and buying Cisco gear based on forecasts that “internet traffic doubles every 100 days,” today’s hyperscalers are promising nearly $3 trillion in AI infrastructure spending over the next three years, Burry said in a Substack newsletter.

The heart of his Cisco analogy is overbuilt supply meeting far less demand than expected. In the early 2000s, less than 5% of U.S. fiber capacity was operational, Burry said. Today, he believes the industry’s belief in boundless AI demand rests on similarly optimistic assumptions about data center power and GPU longevity, he said.

“And once again there is a Cisco at the center of it all, with the picks and shovels for all and the expansive vision to go with it. Its name is Nvidia,” Burry wrote.

— CNBC’s Michael Bloom contributed reporting.

• The producer price index increased a seasonally adjusted 0.3% for September, in line with the Dow Jones consensus estimate.
• However, excluding food and energy, the index rose just 0.1%, below the 0.2% estimate.
• Retail sales increased 0.2% in September, a bit softer than the 0.3% forecast. However, sales excluding autos rose 0.3%, in line with the estimate.

https://www.cnbc.com/2025/11/25/core-wholesale-prices-rose-less-than-expected-in-september-retail-sales-gain.html

Oil prices fell on Monday, extending last week’s decline of about 3%, as investors weighed the chances for a U.S. rate cut against the prospect of a Ukraine peace deal that could lead to an easing of sanctions on major producer Russia.

The United States and Ukraine were set to resume work on a revised peace plan ahead of a Thursday deadline set by U.S. President Donald Trump, after agreeing to adjust an earlier version that critics said was too favourable to Moscow.

Brent crude futures fell 58 cents, or 0.9%, to $61.98 per barrel, while West Texas Intermediate was down 60 cents, or 1%, at $57.46 a barrel.

“The market is overwhelmingly focused on the macro view, which is this Ukraine peace treaty and the U.S. economy,” said Jorge Montepeque, managing director at Onyx Capital Group.

U.S. sanctions on state-owned Rosneft and private firm Lukoil, which took effect on Friday, have caused friction that would normally send prices up, but the market is preoccupied by the peace deal making it bearish for oil, he added.

Trump has set a deadline of Thursday for the deal, but U.S. Secretary of State Marco Rubio said on Sunday that the deadline might not be set in stone.

A peace deal could potentially lead to a rollback of sanctions that have challenged Russian oil exports. Russia was the second-largest producer of crude oil in the world after the United States in 2024, according to the U.S. Energy Information Administration.

Uncertainty regarding U.S. interest rate cuts is another factor suppressing investors’ appetites.

However, the possibility of a rate cut next month increased after New York Federal Reserve President John Williams suggested a cut in the near term.

“Expectations of a potential Fed rate cut in December may also provide a counterbalance to bearish sentiment by improving global risk appetite,” said Sugandha Sachdeva, founder of SS WealthStreet, a New Delhi-based research firm.

“Crude prices have already declined nearly 17% this year, reflecting persistent negative sentiment … at these lower levels, value buying is expected to gradually emerge.”

https://www.cnbc.com/2025/11/24/oil-falls-as-ukraine-peace-talks-edge-toward-a-solution.html

Newly hatched South Bow Corp. SOBO-T -0.78%decrease plans to use takeovers of rival oil pipelines as part of an ambitious plan to more than double the size of the Calgary-based energy infrastructure company.

South Bow, spun out of TC Energy Corp. TRP-T -0.79%decrease 13 months ago, held its first investor day on Nov. 19. And itoutlined plans to profitably build the company from its current $15-billion enterprise value, which includes its equity and debt, to $30-billion-plus over the next five years.

South Bow chief executive Bevin Wirzba said acquisitions are part of the growth strategy and the company is evaluating several potential opportunities. Analysts said South Bow will need to acquire between $3-billion and $8-billion of energy assets to hit its goal.

“We do have faith in the management team to execute, and industry M&A activity levels are high, but this is an ambitious strategy,” analyst Robert Catellier at CIBC Capital Markets said in a report.

South Bow reports $93-million third-quarter profit, up from past year

South Bow owns the Keystone pipeline connecting Alberta oil fields to Texas refineries. The company forecast it will spend roughly $4-billion on organic growth initiatives over the next five years on projects that include expanding its pipeline network in Alberta.

South Bow could acquire Calgary-based Gibson Energy Inc. GEI-T -0.60%decrease, which owns oil terminals in Alberta and Texas and has a $4.2-billion market capitalization. Or it could buy assets from Inter Pipeline Ltd. IPPLF +1.51%increase, which has 3,300 kilometres of pipelines and oil storage operations in the Alberta oil sands, analyst Robert Hope at Scotia Capital Markets said in a report.

South Bow management is also talking to private equity funds that own energy infrastructure and must eventually sell these businesses and pay back their investors, Mr. Hope said. The company will move cautiously, and “potential transactions must align with South Bow’s capital allocation framework, carry a similar risk profile and deliver per-share accretion,”he said.

South Bow’s opportunities to expand come partly from its existing foothold in what Mr. Wirzba calls an “irreplaceable corridor” that connects the strongest supplies of heavy oil in the world – from Alberta’s oil sands to refiners in the U.S.

And he is adamant Western Canadian production is only going to grow, as oil sands and conventional producers boost output, after investing billions of dollars on expanding operations and takeovers of their own.

“We believe that over the next 10 years, we could see again another 1-million barrels [a day] of growth potential out of that basin,” and moving through pipelines to refineries, Mr. Wirzba told the investor conference.

The first half of that expanded production won’t even need much capital to get going, he added; it will come from things like new solvent technology and improved well designs.

That’s great for industry, but producers are going to have to get their commodities to market somehow – and that’s where South Bow sees a shining opportunity, he said.

The company plans to build or acquire feeder pipelines, Mr. Wirzba said.

By creating more revenue streams, South Bow can spread its governance and optimization costs over several assets, “which makes our base business that much more competitive going forward.”

South Bow doesn’t intend to turn down opportunities that make sense,but that doesn’t mean it will start chasing risky deals in order to grow more quickly, he said, adding it will take a “disciplined approach to risk.”

South Bow explores increasing crude exports after Carney raises Keystone XL revival with Trump

Maurice Choy, an RBC Capital Markets analyst, said in a report that companies pursuing an active M&A program often face mixed reactions from the market.“However, management’s presentation at the investor day should offer some reassurance to investors that it will remain disciplined.”

South Bow’s revenues are splitwith roughly 30 per cent in Canada and 70 per cent in the U.S. Despite overtures from other parts of the world, Mr. Wirzba said it intends to remain focused only on those two markets.

“We can just be focused in this corridor, in this kind of industry, and be very successful. So we don’t see any need to deviate from that,” he said.

South Bow sends Canadian heavy oil to U.S. refineries that also import the fossil fuel from Venezuela. The South American country is the fourth-largest U.S. supplier, behind Canada, Mexico and Saudi Arabia, shipping 228,000 barrels a day last year.

Given the political uncertainty in Venezuela, RBC’s Mr. Choy said South Bow has an opportunity to supply far more oil to Texas refineries.

“Roughly 700,000 barrels per day of crude oil imports from other countries in the U.S. Gulf Coast region may be displaced by Canadian products,” Mr. Choy said in a recent report.

In 2024, Canadian energy companies shipped 4.1 million barrels of oil each day to U.S. refiners.