Good morning. While global leaders debate how to rein in the trade war, its effects – and the pressure of inflation – are becoming more visible in Canadian towns built on manufacturing and exports. Today, we look at how the strain is showing up at local food banks, where single people with full-time jobs make up a growing share of those in need.
In the headlines
Boardroom battles: Software company FNZ and Canadian pension funds caught in legal dispute as shareholders claim unfair treatment.
Energy:
- MEG Energy could attract higher offers in wake of Strathcona’s $5.9-billion bid, analysts say.
- TotalEnergies signs LNG deal as B.C. project’s pipeline costs soar to $12-billion
Agriculture: What Canada can learn from a vertical lettuce farm.
In the know
What else we’re following
- Statistics Canada releases its new housing price index for April.
- Earnings include Canada Goose, which has been “ruthlessly focused on prudently managing” head count and costs.
- G7 finance ministers continue to meet. The countries have begun discussing low-cost shipments from China as the U.S. targets online retailers and the EU considers a fee on small packages.
Carolyn McLeod-McCarthy is managing director of the Guelph Food Bank.The Globe and Mail
In focus
Grocery prices are climbing. So are food-bank visits
Inflation might be easing. But in grocery aisles, the pressure hasn’t let up.
Prices for food bought from the store rose 3.8 per cent last month from 3.2 per cent in March, Statistics Canada reported yesterday. That acceleration is hitting hard in cities such as Guelph, where high shelter costs and a fragile manufacturing base leave little room for households to manoeuvre. A growing number are turning to the Guelph Food Bank.
“People just can’t do it any more,” said Carolyn McLeod-McCarthy, the food bank’s managing director. “They’re working full-time, and it’s still not enough.”
In January of last year, the food bank served just over 3,000 people. By this March, the number had climbed to more than 4,100 – a 39-per-cent increase in just over a year.
Among the most visible shifts, McLeod-McCarthy said, is the increasing number of single adults with full-time jobs who are walking through their doors. Clients with full-time jobs account for 17 per cent of the organization’s “neighbours in need,” up from 16 per cent last year. More than a third are children.
Guelph’s economy largely depends on manufacturing and agriculture – sectors sensitive to both interest rates and global trade. In a recent study from the Conference Board of Canada, the southwestern Ontario city ranked atop a list of regions that stand to be hardest hit. As orders slow and shifts are cut, the financial cushion for many families is disappearing.
A supply gap
Inside the warehouse, McLeod-McCarthy moves past rows of fridges and stacked loaves of bread, as staff zip by with dollies loaded with vacuum-sealed meat.
“We never know what we’re going to have,” she said. “But we do our best to make sure people walk away with the basics.” Each household receives five to seven days’ worth of groceries – about half what the food bank once offered.
Food comes from both individual donations and national and provincial networks – but these days, the supply simply isn’t keeping up.
McLeod-McCarthy’s team is now making regular trips to cities such as Milton and St. Thomas to source essentials – a workaround that’s becoming more frequent as local need deepens. A recent delivery of three skids of meat brought brief relief, but the shelves don’t stay full for long.
To better understand what’s driving the increase, the food bank has partnered with nursing students from Nipissing University to survey clients. McLeod-McCarthy said she and her team closely follow economic developments and corporate earnings for signs of what’s ahead.
“We watch it all,” she said. “Because we have to. We know what’s coming.”
An eye on the big picture, and the banks
This week, Canada’s Big Six banks begin reporting earnings – with Toronto-Dominion Bank set to report tomorrow – and analysts expect them to flag growing provisions for loan losses as economic uncertainty deepens. Those safety nets would likely be aimed at softening the blow of trade-dependent businesses becoming more challenged if the trade war worsens.
But the foundation is already cracking. Unemployment climbed to 6.9 per cent in April. Business confidence has weakened. The Bank of Canada noted in a recent survey that “hiring intentions are weak.”
Meanwhile, grocery prices continue to rise, even as headline inflation slows. The price of beef is more than 16 per cent higher than it was a year ago.
That leaves the central bank in a difficult spot – caught between the pressure to cut rates to support the economy and the risk of reigniting price growth in essential goods.
Either way, the fallout is already landing at food banks.
“We know people are losing shifts,” McLeod-McCarthy said. “And we’re starting to see them come through our doors.”
Mapped
The magnificent eight
The Globe and Mail, Source: Independent Committee for the Regional Assessment of Offshore Wind Development in Nova Scotia
A study of 300,000 square kilometres of open ocean, prepared for the Nova Scotia and federal governments and published in January, identified eight promising areas for developing offshore wind projects on the continental shelf and slope off the province’s coast.
Bookmarked
On our reading list
Driving: A Canadian car. The country’s most prominent auto-sector representative makes the case for a domestic automaker.
Driving: Up prices. Corporate property owners are fuelling rent increases in Toronto.
Driving: To Kansas. Businesses hit by Trump’s trade war are wooing Canadian customers.
Morning update
Global stocks fell and the U.S. dollar was under pressure on Wednesday as investors worried about the U.S. fiscal outlook and the lack of progress on trade talks.
Wall Street and TSX futures were down.
Oil prices rose more than 1 per cent on fears of potential supply disruption following an unconfirmed CNN report of possible escalation in the Middle East.
Brent futures rose 79 US cents to US$66.17 a barrel. West Texas Intermediate crude jumped 82 US cents to US$62.85.
Overseas, the pan-European STOXX 600 was down 0.48 per cent in morning trading. Britain’s FTSE 100 was down 0.069 per cent, Germany’s DAX lost 0.4 per cent and France’s CAC 40 was down 0.65 per cent.
In Asia, Japan’s Nikkei closed 0.61 per cent lower, while Hong Kong’s Hang Seng gained 0.62 per cent.
The Canadian dollar traded at 72.03 U.S. cents.