HEADLINES

Chinese Auto Giant Geely Announces Canada Entry in 2027 as U.S. Seeks Ban

One of the biggest Chinese automakers is setting up shop north of the U.S. border.

Chinese automaker Geely plans to begin selling vehicles to Canadian customers next year, the company said. Geely, one of the largest carmakers in the world by sales, has begun establishing a retail and service network in the country and plans to introduce its first vehicles to Canadian consumers in 2027.

"Canada represents an important next step in Geely Auto's international growth," said Bryan Wu, Geely's managing director in Canada. "We are entering this market with a long-term commitment, bringing our global technology and engineering capabilities to Canadian drivers."

Jobless Rate Edges Up With Another Drop in Employment

Canada's economy unexpectedly shed jobs for a second month running, nudging the unemployment rate higher.

Employers in the country cut 68,300 jobs in September, Statistics Canada said.

That pushed the unemployment rate up 0.1 percentage point to 6.5%, returning it to where it stood in June and at the start of the year, but below the recent peak of 6.9% hit in April.

September's fall in the employment was the steepest since February, and was split between full- and part-time work. Building on the 41,700 jobs lost in August, it breaks what had been a trend higher with roughly 181,000 jobs added to the economy between April and July.

Job Weakness Erodes Case for Quick Rate Rise

Average Three-Month Pace of Employment Now Negative

Aritzia Shares Up as Second-Quarter Tops Views, Upgraded Guidance Eases Slowdown Fears

Aritzia shares surged after the Canadian women's fashion retailer topped second-quarter expectations and raised its guidance, easing concerns of a slowdown in sales after lapping strong comparative figures.

Shares settled 20.5% higher at C$146.91.

Late Thursday, Aritzia raised its full-year revenue outlook after U.S. sales surged 60% in its fiscal second quarter to C$779.4 million.

The company now expects revenue to reach between C$4.78 billion and C$4.88 billion in fiscal 2027, which would represent an increase of 29% to 32% from the prior year.

Customer Loyalty, Digital Growth Driving Momentum

Government Raises $1.4 Billion With New 10-Year Green Bond

Canada's government raised C$2 billion with the sale of its seventh green bond.

The Department of Finance priced the 10-year Canadian dollar-denominated bond as part of the government's effort to unlock private capital to help speed up projects such as nature conservation and environment-focused infrastructure.

The issuance saw strong demand from investors, with the final order book standing at more than C$3.6 billion, the department said.

The latest offering increases the amount of green bonds issued by the federal government since March 2022 to C$19.5 billion.

Lundin Gold Rises on Gold Output from Ecuador Mine

Lundin Gold shares advanced after the miner reported an increase in third-quarter gold production from its mine in Ecuador.

The stock rose 10.5% to C$95.82.

The company late Thursday reported gold production reached 153,736 ounces from its Fruta del Norte gold mine, which the company described as the highest quarterly gold production achieved since commercial production began there.

A year earlier, the company produced 122,086 ounces. The increase from the prior-year period represents a growth of nearly 28%.

Couche-Tard to Acquire Irving Oil Retail Assets in Quebec, Ontario

Alimentation Couche-Tard has agreed to acquire certain assets in Quebec and Ontario from Irving Oil.

The Canadian convenience store operator said it will acquire 50 retail sites already operated by Couche-Tard under the Quebec Alliance between the two companies, as well as two retail sites in Ontario. The deal also covers fuel supply to 71 retail sites that Couche-Tard owns and operates in Quebec, as well as 18 cardlock sites.

"These are markets and customers we know well," said Senior Vice President of Operations Stephane Trudel. "The transaction would support our continued investment in the everyday convenience experience we offer our customers."

No financial details were disclosed.

Aura Minerals Shares Rise on Record High Gold Production Estimate

Aura Minerals shares rose after the company said it expected third-quarter gold production to reach a record high.

The stock rose 10.6% to $91.26.

The mining company shared preliminary third-quarter production results for its six operating mines. Preliminary estimates showed production reached 95,557 gold equivalent ounces, a 29% increase from the year before.

At constant prices, Aura's quarterly production is expected to have increased by 25% over the same period the year before. Sales totaled 93,742 gold equivalent ounces.

MTY Food Group Profit Falls on Cautious Consumers

MTY Food Group logged a lower profit as continued sluggish demand weighed on sales across its network of quick-service restaurants.

The Montreal-based quick-service restaurant franchiser posted a decline in net income to C$24.8 million, or C$1.08 a share, for the three months ended Aug. 30, compared with C$27.9 million, or C$1.22 a share, in the comparable quarter a year ago.

Adjusted earnings were C$1.26 a share. According to FactSet, analysts were expecting C$1.19 a share.

Revenue fell to C$277.7 million from C$299 million, virtually in line with analyst expectations.

Company Pauses M&A, Shifts Focus to Shareholder Returns

Strategic Review Ends Without a Sale

TALKING POINT

Canadians' Shift to Shorter-Term Mortgages Leave Homeowners Exposed to Rate Hikes, Oil Price Shocks

By Salmaan Farooqui of the Globe and Mail

A record-low number of homeowners are opting for long-term fixed-rate mortgages, and economists say a reliance on cheaper, less-stable products could leave the housing market more susceptible to monetary policy changes and outside forces like oil price shocks from the war in Iran.

Just 8.8 per cent of Canadians signed a fixed mortgage with a term of five years or longer this summer, according to a data analysis by National Bank. It's a major change from the prepandemic era, when nearly 50 per cent of homeowners signed long-term fixed mortgages.

National Bank senior economist Daren King, who authored the study, said that the recent spike in bond yields - which lenders base their mortgage rates on - and the corresponding hikes in long-term fixed mortgage rates mean that even fewer consumers will choose them in the coming months. The data in Mr. King's report reflects trends until July, 2026.

Mr. King said the housing market could remain even more sluggish than expected if homeowners are increasingly rate-sensitive, especially since the Bank of Canada is expected to raise interest rates in the coming months and bond yields continue to soar near two-year highs and drive up the cost of borrowing.

"In August and September the recovery to the housing market stopped," Mr. King said. "At first, it was caused with uncertainty from the U.S. trade conflict, but now it's more of the impact of rising interest rates."

The decrease in long-term fixed rate borrowing accelerated around 2022, when less than 20 per cent of consumers were choosing those mortgages. They instead opted for short-term fixed rates at a time when all mortgage rates were high, betting that borrowing costs would drop quickly. More than 80 per cent of shoppers were choosing a fixed-term shorter than five years at the peak of that trend in mid-2023.

The advantage of shorter-term mortgages has greatly diminished. Victor Tran, an Ontario-based mortgage broker, said three-year fixed rates are currently only 0.1 per cent cheaper than five-year fixed rates.

That's part of the reason why variable rates have been making a comeback in 2026, with more than 40 per cent of consumers signing one, up from less than 10 per cent in 2024. Variable rates are also nearly one percentage point cheaper than fixed rates right now.

But variable rates come with their own risks. Financial markets have priced in the likelihood of four Bank of Canada rate hikes by mid-2027, which would bring variable rates up to the mid-4-per-cent range, a level comparable with current five-year fixed rates.

Kari Norman, a senior economist with Desjardins, said oil price shocks caused by the war in Iran and the impact of the U.S. trade war on the Canadian economy are examples of how variable or short-term mortgage holders carry more immediate risk.

"Who would have thought that we'd have an oil price shock this year. We couldn't have anticipated that a year ago," Ms. Norman said.

She said someone signing a five-year fixed rate would likely see their family income increase over the life of their mortgage term, allowing them to absorb similar rate hikes better.

In the long term, Mr. Tran predicts that five-year fixed rates will make a comeback. More of his clients are already choosing longer-term rates.

"A lot or people coming up for renewal are looking for stability, " Mr. Tran said.

However, pricing on five-year rates will face upward pressure for the rest of 2026. Mr. King noted that those rates have been unusually low compared with bond yields because of intense competition between lenders over a large cohort of renewals five years on from the pandemic housing boom. Once that wanes and the slower winter season begins, lenders will likely increased their rates even if bond yields stay flat.

Unless geopolitical stresses like the war in Iran ease, Mr. King said the housing market will remain in a weak state in 2027.

Expected Major Events for Monday

23:01/UK: Sep BRC-KPMG Retail Sales Monitor

23:50/JPN: Sep Bank Lending

23:50/JPN: Sep Corporate Goods Price Index

00:00/GER: Aug Balance of Payments