Business Brief: The burden of being young

Globe and Mail

3 hours ago

Good morning. Tomorrow's inflation report is set to highlight Canada's widening affordability gap. That's in focus today – along with a preview of what's in store this week and beyond.
Travel: Air Canada scrapped plans to resume flights last night after the union representing flight attendants said it would defy a federal government order that they end their strike and return to their jobs. The airliner said it planned to resume flights tonight, but the union said it had no plans to follow Ottawa's directive.
Defence: Industry Minister Mélanie Joly is travelling to Sweden this week for meetings with Saab, the aerospace and defence giant. In response to U.S. tariffs on Canadian imports, the federal government is weighing options to replace part of its order for U.S.-made F35s.
Trade: Canada can capitalize on the tarnished trade reputation of the United States to expand its food exports and expertise into the Indo-Pacific, federal Agriculture Minister Heath MacDonald said upon returning from his first trade mission.
Today: Ukrainian President Volodymyr Zelensky arrives at the White House with a bloc of European leaders at his side, facing a potential push by U.S. President Donald Trump for a Ukraine peace deal shaped by a meeting with Russian President Vladimir Putin.
Today and Wednesday: Reports from Canada Mortgage and Housing Corp. and Statistics Canada will bring the country's sluggish housing starts and prices into focus.
Tomorrow: Statistics Canada reports inflation for July.
Next month: Resilient consumer spending means the Bank of Canada is likely to keep its benchmark lending rate at 2.75 per cent on Sept. 17.
For the first time this century, a rocket built and launched in Canada has reached for outer space. A group of engineering students at Concordia University in Montreal spent seven years turning their homegrown dreams of space flight into reality.
You can find more on the students and a video of the historic launch here.
Even as signs of stability emerge among overall credit payments, gaps are widening between young and old, homeowners and renters.
With inflation in focus tomorrow, a new report shows payments overdue by at least 90 days have jumped nearly 20 per cent from a year ago, as Canadians under 36 struggle with the country's highest levels of missed payments on credit cards and auto loans.
Rebecca Oakes, vice-president of advanced analytics at Equifax Canada, said the strain is most visible among non-mortgage holders – a group that largely includes younger Canadians and renters. The delinquency rate among that segment is nearly double that of mortgage holders – a gap that has widened steadily in recent years.
The combination of rising living expenses, limited savings and a slower job market makes younger borrowers especially vulnerable, Oakes said in an interview.
'The widening gap between people doing okay and people struggling is still growing, and that's our biggest concern,' she said.
Spending patterns show mortgage holders are cutting back on credit-card use, while non-mortgage holders – especially younger consumers – are spending more. Credit cards are potentially being used to cover essentials rather than discretionary items.
Business investment will be a key factor in whether youth job prospects improve, Oakes said, since reduced spending by companies can limit job creation and disproportionately affect younger workers.
'As businesses grow and invest, you get job creation,' she said. 'If there's less investment, maybe there's less job creation – and that is likely to hit that group first.'
Uncertainty continues to drive cautiousness for hiring and investment, the Bank of Canada reported in its most recent business outlook survey. Most companies expect to maintain current staffing levels and limit investment to regular maintenance over the next 12 months.
U.S. producer prices rose in July at their fastest pace in three years, a jump economists link to tariffs pushing costs through the supply chain.
The 0.9-per-cent monthly increase – more than three times faster than expected – was driven largely by higher margins in wholesale and retail trade, and could complicate the U.S. Federal Reserve's decision on whether to cut interest rates in September.
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Global markets drifted lower ahead of what is likely to be an eventful week for U.S. interest rate policy. Wall Street futures were in negative territory, while TSX futures followed sentiment down.
Overseas, the pan-European STOXX 600 was down 0.2 per cent in morning trading. Britain's FTSE 100 slid 0.06 per cent, Germany's DAX fell 0.32 per cent and France's CAC 40 dropped 0.74 per cent.
In Asia, Japan's Nikkei closed 0.77 per cent higher, while Hong Kong's Hang Seng gave back 0.37 per cent.
The Canadian dollar traded at 72.48 U.S. cents.