Lowe’s Leaving Canada, Interest-Free Student Loans and More Temporary Foreign Workers: Must-Read Business and Investing Stories

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

Being overtaken by a week that got away? Here’s your weekly roundup of the Globe’s most essential business and investing stories, with insights and analysis from the pros, stock tips, portfolio strategies and more.

Lowe’s is getting rid of Rona and its Canadian operations

US hardware giant Lowe’s is selling off its Canadian retail business – about 450 stores that operate under the Lowe’s, Rona, Reno-Depot and Dick’s Lumber banners – after a frustrating six-year run. Nicolas Van Praet reports that the buyer is New York-based private equity firm Sycamore Partners, which is buying the stores for $400 million in cash plus unspecified performance-based perks. Lowe’s entered the Canadian market in 2007 and expanded its presence in 2016 with the purchase of Rona for $3.2 billion. The sale is an acknowledgment by the company that it could not make the buyout work. The business struggled and Lowe’s cut jobs and closed dozens of stores in several provinces. For Rona, the sale will likely mean another turbulent period as Sycamore tries to improve its finances and attract new owners.

Interest-free student loans among financial update highlights

The federal government released its fall economic statement this week, acknowledging what worries many Canadians as they face affordability challenges: the growing risks of the country entering a recession. Matt Lundy writes that Ottawa has pointed to several risks to the economic outlook, including a “more aggressive” reaction to inflation by the US Federal Reserve, via higher interest rates, and “widespread volatility” in the stock and bond markets. Highlights include the proposal to make all Canada Student Loans and Canada Apprentice Loans interest-free permanently, including loans in repayment. The change, which would begin April 1, 2023, would cost $2.7 billion over five years and just over $550 million per year thereafter.

Sorry Pensioners, Inflation Is Far From Over

Inflation is one of the greatest threats to a comfortable retirement, writes Frederick Vetesse. Past waves of high inflation have lasted about four years, suggesting that the current wave of soaring prices does not appear to have an end in sight.

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

Canadian companies are increasingly using the temporary foreign worker program, after it was expanded by the federal government, to fill low-wage jobs to fill labor shortages. As Matt Lundy reports, employers received approval in the second quarter of this year to hire around 45,200 positions under the TFW program – the most since at least 2017. The April to June quarter tends to be a slower period for approvals, but this last spring was in full swing: TFW approvals were more than double those of the same period in 2018 and 2019. Companies can now hire up to 20% of their staff through the low-wage stream of the TFW program, up from 10 per- cent ceiling. And in seven sectors with severe labor shortages – such as restaurants, construction and hospitals – the cap has been moved to 30% for a year.

The affordability trap of Toronto and Vancouver

Are you a young person living in Toronto or Vancouver? You may want to consider moving to a less expensive city. Without six-figure incomes or well-to-do parents, anyone in their 20s and 30s should consider whether they have a future in two of Canada’s biggest cities, including home ownership, writes Rob Carrick. It’s a challenge to escape the gravitational pull of these cities, especially during your career-building years, but internal migration patterns in Canada show that people have started to rebel against the high cost of living. that accompanies an address in Toronto or Vancouver. According to Statistics Canada, more people have left Ontario than moved here in the past year.

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

Seasoned financier Arlene Dickinson of Dragons’ Den announced this week that she is merging her marketing and communications business with five other agencies to launch a larger business with international reach, backed in part by the Business Growth Fund Canadian. The new company, called Believeco:Partners, will have nearly 300 employees in seven offices across North America, serving customers in a variety of industries, including technology, food, healthcare, agriculture, government and financial services, reports Temur Durrani. It will combine Ms. Dickinson’s Venture Play agency with leading Canadian marketing firms Argyle, Brightworks, Zync, Revolve and Castlemain. “It’s six companies coming together right now, but we certainly plan to acquire more independent companies in the future,” Ms Dickinson told The Globe and Mail.

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Now that you’re all caught up, get ready for the week ahead with The Globe’s investment calendar.

About Evelyn C. Heim

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