Morning. In today’s edition: Canada plays host to folks who manage nearly $120-trillion in assets; consumers continue to pay more at the grocery store; and the housing market braces for more heartburn in 2027.
Up first
In the news
Sovereignty: Canada and the EU are exploring deeper trade, investment, security and labour ties, a senior government official says – but not at the expense of autonomy.
Finance: Scotiabank is committing $100-billion to fund Canadian companies.
Venture capital: AI financier Intrepid Growth, co-led by ex-CPPIB CEO Mark Machin, raises US$525-million for its first fund.
Today alone, Toronto is hosting the investment summit, TIFF and the Detroit Tigers.Carlos Osorio/Reuters
In focus
High stakes on Lake Ontario
1. Selling Canada to the world: “Canada is not for sale, but it is quite investible.” Okay, that’s probably too long for a T-shirt, but it’s the gist of the pitch being made today and tomorrow at the Canada Investment Summit. The high-stakes affair in Toronto’s tony Yorkville neighbourhood will play a pivotal role in Prime Minister Mark Carney’s efforts to generate $1-trillion in investment over the next five years to fund major projects. As The Globe’s Jameson Berkow reports, Carney’s key objective will be to attract interest from beyond the U.S., which has accounted for the vast majority of foreign direct investment in Canada this year.
At the summit, the largest gathering of global financial leaders to ever assemble in this country, the Prime Minister will be pitching Canada as an attractive location for foreign capital, even as it sits in the crosshairs of the Trump administration in a nasty trade war. Carney and Co. plan to showcase projects across energy, critical minerals and defence.
Officials have identified more than 160 projects that are open for investment. That includes a proposed $10.9-billion high-speed rail link between Edmonton and Calgary and a planned $57-billion Port of Churchill expansion project.
After speaking with more than two dozen sources with ties to the summit, James Bradshaw and Stephanie Levitz reported that it’s clear Carney has captured investors’ interest. But will that be enough to close billions of dollars in new deals?
(Here’s hoping the sounds of the new Friday the 13th entry premiering this morning at TIFF won’t carry.)
Prime Minister Mark Carney speaks at the Canada Investment Summit welcome reception at the Royal Ontario Museum in Toronto on Sunday.Laura Proctor/The Globe and Mail
More summit coverage:
- Investors are “looking at Canada differently,” Carney said in a speech last night.
- Crowds from multiple events in Toronto are creating security challenges.
2. Price pain: Overall inflation has chilled a little, but food and energy prices remain a sore spot for Canadian households.
It will come as small relief to many that headline consumer price index growth is expected to hold at 3 per cent in today’s report, unchanged from July. Even though gasoline prices edged lower in August, they were still about 23-per-cent higher than a year earlier, RBC economist Nathan Janzen wrote in a note to clients last Friday.
And while grocery inflation slowed somewhat in July, it has outpaced overall inflation for roughly a year and a half. Affordability pressures have been felt across the economy (more on that below), but higher food prices squeeze lower-income households hardest. Healthy options become a luxury.
3. Hold up: Still, food and energy prices are seen as too volatile when taking the temperature of an economy’s health. Outside of those two areas, core measures of inflation will likely remain closer to about 2 per cent.
The Bank of Canada pays more attention to those measures, meaning another hold is likely at its next decision on Oct. 28. But after its most recent meeting, Governor Tiff Macklem said the bank would consider raising rates if rising energy costs spilled over into the price of more goods and services.
On Wednesday, the bank’s summary of deliberations will give us an even clearer window into how the bank is navigating the U.S. trade clash and war in the Mideast. Neither of those conflicts appear to be cooling down. Most economists don’t see Macklem hiking this year, but the possibility of one or more in early 2027 is growing.
4. A hike? Also on Wednesday, market watchers are now betting on a bump from the U.S. Federal Reserve – even if it raises the ire of Trump. The President has been calling on the central bank to lower its benchmark lending rate for months — in Ireland yesterday for a golf tournament, he said the U.S. should have the lowest in the world — but he might not have left Fed Chairman Kevin Warsh much choice: Inflation in the U.S. has been running higher than expected, largely because of the Iran war’s effect on gas prices. Sad!
5. House falls: If borrowing costs have only higher to go, Canada’s housing market might face further strain. In data released on Tuesday, existing home sales are forecast to fall 6.5 per cent from a year ago in August, while the MLS Home Price Index, which tracks the value of a typical home, is expected to decline 3 per cent.
Charted
Pinched: Canada’s house price correction has been painful for homeowners forced to watch their equity erode. But as steep as the price drop has been, Jason Kirby observes, affordability has still not recovered to historic norms. The Bank of Canada’s housing affordability index, which tracks housing-related costs relative to average household disposable incomes, still sits well above prepandemic levels.
Quoted
Every NHLer is a winner in the sense that they get paid a tech CEO’s wage to run around in pants that make a noise when the legs rub together, but even on that metric McDavid is now losing.
The Oilers – with Connor McDavid’s approval – are the NHL’s villains, Cathal Kelly writes
Morning update
Global markets were mostly lower as supply concerns in the Middle East caused oil prices to spike again and investors braced for likely interest rate hikes in both the United States and Japan this week.
On Wall Street, Nasdaq futures led losses, dragged by a selloff in AI heavyweights after top U.S. executives said development of the technology should be slowed due to safety concerns.
TSX futures followed sentiment lower ahead of August inflation numbers.
Overseas, the pan-European STOXX 600 was down 0.24 per cent in morning trading. Britain’s FTSE 100 rose 0.68 per cent, Germany’s DAX declined 0.53 per cent and France’s CAC 40 gave back 0.73 per cent.
In Asia, Japan’s Nikkei closed 0.81 per cent lower, while Hong Kong’s Hang Seng climbed 0.45 per cent.
The Canadian dollar traded at 71.95 U.S. cents.