Live news: CIBC fined $1.3 million by anti-money laundering agency

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2:15 p.m.

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Flight safety in Canada is plummeting, a confidential UN agency report finds

A draft report from a United Nations agency gives Canada a C grade on flight safety and oversight, down from an A+ and far below most of its peers.

The confidential audit from the International Civil Aviation Organization says the country has fallen precipitously since 2005 in three safety areas: aircraft operations, airports and air navigation.

The UN body is recommending that the federal government establish a system to lock in full regulatory compliance by airlines and airports, shore up certification related to dangerous goods and ensure proper training and fatigue management for air traffic controllers.

Ross Aimer, chief executive of California-based Aero Consulting Experts, says a shortage of air traffic controllers and a trend toward off-loading safety responsibilities from government onto industry players remain concerns across the continent.

However, University of Manitoba transport institute director Barry Prentice says Canada’s flight safety record speaks for itself, with plane accident deaths down in recent years and no major commercial airline crashes in decades.

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The government had until Oct. 30 to respond to the agency’s draft audit, and a final report is expected in the coming months.

The Canadian Press

1:52 p.m.

Immigration surge putting pressure on inflation via housing demand: Bank of Canada deputy

A senior Bank of Canada official is warning the recent surge in newcomers has propped up rent and home prices, adding pressure to inflation.

In a speech in Windsor, Ont., deputy governor Toni Gravelle says that while the rise in immigration is helping grow the economy and the country’s workforce, it’s also fuelling inflation through housing demand.

Gravelle told the Windsor-Essex Regional Chamber of Commerce that rent price inflation continues to surge in Canada even as it declines in the United States, partly because home construction south of the border has historically adapted more quickly to shifts in population.

The deputy governor is warning all levels of government to need to work together to reduce barriers to building more homes, or else rent and home prices could continue to climb.

Canada has experienced strong population growth in the last couple of years as the federal government pursues more ambitious immigration targets and allows more non-permanent residents into the country.

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The Bank of Canada maintained its key interest rate target at five per cent on Wednesday, but cautioned it was prepared to raise rates if needed in its fight against inflation.

Read the full story here.

The Canadian Press

12:40 p.m.

Midday markets: Wall Street drifts higher ahead of highly anticipated jobs report

Wall Street is drifting Thursday following its first three-day losing streak since Halloween.

The S&P 500 was 0.5 per cent higher in midday trading and continuing to hang near its highest level since March 2022. The Dow Jones Industrial Average was down 16 points, or less than 0.1 per cent, as of 11:30 a.m. Eastern time, and the Nasdaq composite was one per cent higher.

Big Tech stocks were helping to power the market higher, led by a 4.9 per cent jump for Google’s parent company, Alphabet Inc. They’re Wall Street’s most influential stocks because of their massive size, and they have been on huge tears so far this year.

Much of Wall Street’s recent rally has been because of rising hopes that the United States Federal Reserve is finally done with its barrage of hikes to interest rates, which are meant to get high inflation under control. That has anticipation high ahead of a report on Friday, the U.S. government’s latest monthly update on the job market.

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In New York, the Dow Jones industrial average was down 26.51 points at 36,027.92. The S&P 500 index was up 20.26 points at 4,569.60, while the Nasdaq composite was up 117.80 points at 14,264.51.

In Toronto, the S&P/TSX composite index was down 11.08 points at 20,263.13.

The Associated Press, The Canadian Press

Noon

CIBC fined $1.3 million by Canada’s financial intelligence agency

Canada’s financial intelligence agency says it has levied a $1.3-million penalty against Canadian Imperial Bank of Commerce for non-compliance with money laundering and terrorist financing measures.

The penalty is the second the Financial Transactions and Reports Analysis Centre of Canada has announced this week after RBC’s $7.4-million fine was publicized on Tuesday.

The agency, known as Fintrac, says it imposed the penalty over CIBC’s failure to submit a suspicious transaction report when there were grounds to suspect it was related to money laundering or terrorist activity, and failures to report information related to large money transfers from outside Canada.

Fintrac tries to pinpoint money linked to illicit activities by electronically sifting through millions of pieces of information each year from banks, insurance companies, money services businesses and others.

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It says it found an instance where CIBC didn’t file a suspicious transaction report even as it knew the client had been arrested and charged with criminal offences, while the agency’s review also found over a thousand instances, out of a sample of 20,000, where information related to money transfers was incomplete.

CIBC spokesman Tom Wallis says the administrative matters are related to a relatively small number of transactions and that the bank will continue to identify, investigate and do its part to deter and detect financial crimes.

The Canadian Press

10:33 a.m.

Markets open: Stocks break 3-day losing streak

Wall Street is drifting higher Thursday following its first three-day losing streak since Halloween.

The S&P 500 was up in early trading and roughly split between stocks rising and falling. It continues to hang near its highest level since March 2022.

Much of Wall Street’s recent rally has been because of rising hopes that the United States Federal Reserve is finally done with its barrage of hikes to interest rates, which are meant to get high inflation under control. That has anticipation high ahead of a report on Friday, the U.S. government’s latest monthly update on the job market.

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The Federal Reserve wants to see the job market slow by just the right amount. Too much weakness would mean people out of work and could lead to a recession, but too much strength could add upward pressure on inflation.

So far, anticipation is rising that the Federal Reserve can nail a perfect landing for the job market and overall economy. Inflation has been slowing since hitting its peak two summers ago, and expectations are building that the Fed’s next move will be to cut interest rates next year.

On Wall Street, the S&P 500 was up 0.11 per cent at 4,580.25. The Dow Jones Industrial Average was up 0.12 per cent 36,098.56 while the Nasdaq composite was up 1.16 per cent at 14,311.99.

In Toronto, the S&P/TSX composite index was up 0.08 per cent at 20,289.74.

The Associated Press

10:02 a.m.

Oil, gas emissions to be cut 35-38% by 2030 from 2019 levels

Canada will require its oil and gas industry to cut emissions 35 to 38 per cent below 2019 levels by 2030 in what the government is calling a historic first for a major fossil-fuel producing country.

Federal Environment Minister Steven Guilbeault announced the long-promised oil and gas emissions cap at the COP28 summit in Dubai on Thursday, a policy likely to inflame tensions with the Conservative leaders of Alberta and Saskatchewan where the bulk of the industry is based.

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Prime Minister Justin Trudeau’s government will implement a cap-and-trade system to achieve the cuts. It will set a legal limit on the sector’s emissions and then allow companies to buy and trade a limited number of emissions allowances or permits. Companies that reduce emissions will be able to sell more permits, thereby rewarding those who innovate to cut pollution.

“There is no future for this industry unless they decarbonize,” Guilbeault said in an interview.

The emissions cap will go down over time until Canada’s economy reaches net zero in 2050. The announcement on Thursday is a framework that lays out the plan, with more details to be released in draft regulations in the middle of next year, Guilbeault said. Those regulations will narrow down an exact target for 2030 within the 35-38 per cent range, he said.

Read the full story here.

Bloomberg

7:30 a.m.

Laurentian Bank profit falls on restructuring costs, computer outage

Laurentian Bank of Canada reported its fourth-quarter profit fell compared with a year ago as it was hit by restructuring and other costs related to its strategic review and a major computer outage in September.

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The Montreal-based bank said it earned $30.6 million or 67 cents per diluted share for the quarter ended Oct. 31, down from a profit of $55.7 million or $1.26 per diluted share a year earlier.

The bank said the results included a $5.3-million charge related to the mainframe outage and $15.9 million in restructuring and strategic-review related charges.

Revenue for the quarter totalled $247.4 million, down from $257.1 million a year ago, while provisions for credit losses totalled $16.7 million for the quarter compared with $17.8 million in the fourth quarter of 2022.

On an adjusted basis, Laurentian earned $1 per diluted share in its latest quarter, down from an adjusted profit of $1.31 per diluted share in the same quarter last year.

Laurentian named Eric Provost as its new chief executive in October, replacing Rania Llewellyn in the top job, after the mainframe outage which happened during a planned IT maintenance update. Director Michael Boychuk was also appointed chair of its board of directors, replacing Michael Mueller, who resigned from the board.

Read full story here.

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The Canadian Press

Stock markets before the opening bell

Stock and bond markets fluctuated, while the yen surged the most in three months amid renewed speculation that the Bank of Japan will soon scrap the world’s last negative interest-rate regime.

S&P 500 futures were little changed and 10-year Treasury yields added five basis points. The yen strengthened 1.6 per cent against the dollar and Japanese bonds sold off sharply, with the rate on the 10-year note jumping 12 basis points.

In other markets, gold climbed and the dollar weakened. Bitcoin slipped below US$44,000.

The S&P/TSX composite index closed down 101.72 points at 20,274.21 on Wednesday.

Bloomberg

What to watch today

Bank of Canada deputy governor Toni Gravelle will speak before the Windsor-Essex Region Chamber of Commerce this afternoon about the bank’s economic progress report.

Manitoba Premier Wab Kinew will deliver a “state of the province address” to the Winnipeg Chamber of Commerce.

Canadian building permits data for October will be released this morning. In the United States, expect November’s Challenger layoff report, initial jobless claims for the week of Dec. 2 and wholesale trade data for October.

Companies reporting earnings include Laurentian Bank of Canada, EQB Inc. and Lululemon Athletica Inc.

Need a refresher on yesterday’s top headlines? Get caught up here.

Additional reporting by The Canadian Press, Associated Press and Bloomberg

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