Briefing highlights
- Crack down on housing speculators, BMO urges
- A Vancouver scene I'd love to see
- Valeant shares plunge after earnings, cut to forecast
- CN names new CEO as Mongeau steps down
- Verizon to bid $3-billion for Yahoo Internet assets
- Video: Why rudeness at work is contagious
Housing and speculators
Policy makers should move quickly and aggressively on fears of speculation in Canada’s housing market, observers warn.
“The sooner that governments can provide a clearer picture of how much speculative investment is driving these price moves and take meaningful action to curb the excesses, the better the chance of avoiding a messy outcome,” said BMO Nesbitt Burns senior economist Sal Guatieri.
His comments followed those of Bank of Canada deputy governor Lawrence Schembri, who said last week that he and his colleagues are concerned that speculators are helping to fuel the rapid rise in prices in the country’s hot markets.
The Toronto and Vancouver housing markets are roaring ahead, with huge price gains reported month after month.
Those increases can be attributed to lower interest rates and strong labour markets, but there has to be more behind it, Mr. Guatieri said.
Incomes aren’t rising fast enough to account for the price surge, the BMO economist said. Nor can you tie it all to the “diminishing supply of available land” or an influx of job-seeking millennials.
“That leaves two other drivers – foreign wealth and speculation,” Mr. Guatieri said in a recent research note.
“Growing evidence suggests the former is a key factor, which offers hope that both markets will be spared a severe correction if the inflow of wealth continues,” he added.
“If speculation is also at play – and the number of homes bought and sold within a year in Vancouver has indeed turned higher – then both regions could face a downturn.”
A Vancouver scene I'd love to see ...
Valeant takes hit
Shares of Valeant Pharmaceuticals Inc. plunged today after the embattled company posted a hefty first-quarter loss and cut its outlook.
Valeant slumped in the quarter to a loss of $373.7-million (U.S.), or $1.08 a share, from a profit of $97.7-million or 28 cents a year earlier, The Globe and Mail's Sean Silcoff reports.
Revenue rose 9 per cent to $2.4-billion.
The company also cut its adjusted earnings-per-share estimate for the year to between $6.60 and $7, well down from its earlier projection of $8.50 to $9.50.
The revenue forecast was cut to between $9.9-billion and $10.1-billion, from $11-billion to $11.2-billion.
“The first quarter’s results reflect, in part, the impact of significant disruption this organization has faced over the past nine months,” Valeant’s new chief executive officer, Joseph Papa, said in unveiling the report.
CN names new chief
Canadian National Railway is getting a new chief.
The railway announced today that chief executive officer Claude Mongeau is leaving the post after more than six years on the job, to be replaced by chief financial officer Luc Jobin July 1.
Mr. Mongeau has been with CN for more than two decades.
Verizon to bid more
The auction for Yahoo Inc.’s prime internet operations is heating up.
Verizon plans to bid $3-billion (U.S.) in a second offer, The Wall Street Journal reports.
Other suitors reportedly include AT&T and TPG.
Video: Why rudeness at work is contagious
Editor's note: Numbers in this article have been corrected from earlier versions.