Canadian household wealth fell by 6.1 per cent to $990-billion in the second quarter, the biggest decrease since 1990.Graeme Roy/The Canadian Press
Getting caught up on a week that got away? Here’s your weekly digest of The Globe’s most essential business and investing stories, with insights and analysis from the pros, stock tips, portfolio strategies and more.
Canadians aren’t as rich as we think
After a two-year streak of massive wealth generation during the pandemic, Canadians saw their collective net worth fall by the largest amount on record in the second quarter as financial markets and residential real estate hit a rough patch, writes Matt Lundy. Household net worth fell by $990-billion in the second quarter to $15.2-trillion, a decline of 6.1 per cent from the first quarter and the largest decrease since at least 1990, according to Statistics Canada. Many Canadians are seeing their personal finances tested as the Bank of Canada aggressively raises interest rates to rein in record inflation. Higher borrowing costs have impacted the housing market, and employment has tapered. At the same time, Canadians have piled on loads of debt, and now owe $1.82 for every dollar of disposable income, just shy of a record $1.85.
Male employees prefer working from home
A growing number of Canadians, men especially, have become more accustomed to working from home during the pandemic, and want to continue remote work indefinitely. According to a new report on workplace preferences, regardless of gender, occupation or whether they have children, Canadians are showing a growing affinity toward remote work. Yet the trend is now stronger among men than women, a reversal of preferences during pandemic lockdowns. Among men, 69 per cent polled in December, 2020, said they would like to continue working from home postpandemic, and that increased to 75 per cent this spring. As Vanmala Subramaniam writes, employers mandating that employees return to the office – at least part-time – may encounter challenges getting a core group of the working population back into the office.
Housing unaffordability is the highest in three decades
The Bank of Canada’s housing affordability index, which measures the portion of disposable household income that’s spent on housing-related expenses such as mortgage payments and utility fees, surged to 48.2 per cent in the second quarter. That’s the worst it’s been since 1990, when the central bank raised interest rates to more than 13 per cent to fight inflation and the housing bubble of the late 1980s began to pop. Can Canadians expect affordability to improve by year’s end? Jason Kirby takes a look in this week’s Decoder.
Has tipping fatigue hit its tipping point?
Tipping fatigue is hitting consumers as requests for gratuities increase and spread to new businesses amid the rise of automated payment machines and preset tip suggestions, Brett Bundale reports. During the pandemic, many Canadians increased the amount they tipped essential workers, like restaurant staff and delivery drivers, in recognition of the health risks they took serving people. Tipping also spread to businesses where tipping wasn’t traditionally expected, such as independent retailers, in the spirit of “showing support for the team.” However, with inflation pushing up the cost of everything, some people are feeling uncomfortable with the pressure to tip more, especially when tipping prompts at some point-of-sale terminals increasingly suggest amounts ranging from 18 to 30 per cent. While some restaurants have abandoned tipping in favour of paying their staff more, many consumers still feel on the hook for ensuring hospitality workers receive a living wage.
Canadian government could lose more than $5-billion to small businesses
The federal government may be unable to recoup $5-billion or more of the $49-billion in emergency loans it extended to small businesses during the pandemic lockdowns, according to a government projection. In April 2020, nearly 900,000 businesses received a Canada Emergency Business Account (CEBA) loan, worth up to $60,000 each, that’s interest-free and partly forgivable if repaid by Dec. 31, 2023. As Chris Hannay writes, the issue is that the program has no mechanism to seek out and collect from those who do not repay, and estimates 100,000 borrowers might need to be chased down, 40,000 of whom should not have received funds in the first place.
Air Canada goes electric in an effort to go green
Air Canada is buying 30 electric-hybrid airplanes and investing US$5-million in the developer, Sweden’s Heart Aerospace, to help the airline reach its goal of net-zero emissions by 2050. The 30-passenger, four-motor ES-30 aircraft are expected to be flying regional routes by 2028, Eric Atkins writes. These hybrid planes will have a range of up to 200 kilometres on a lithium-ion battery, while also having a generator powered by fuel. Flights can reach 400 km using the generator and 800 km with a reduced capacity of 25 passengers, and the battery will take 30 to 50 minutes to charge. Global aviation produces 1.04 billion tonnes of carbon dioxide, accounting for 2.5 per cent of all emissions in 2018.
Now that you’re all caught up, prepare for the week ahead with The Globe’s investing calendar.
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