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Briefing highlights

  • Hands off our banking records
  • Markets at a glance
  • Toronto home sales climb
  • Lowe’s to shut several stores
  • U.S. midterms in focus
  • What to expect from the Fed
  • What else to watch for this week

Hands off our records

Statistics Canada's demand to see our banking records is fraught with peril.

There are two immediate questions: Should our statisticians even have that information, and how will they safeguard it?

This is the era of debiting your Tim Hortons morning coffee, using PayPal for online transactions, collecting Starbucks and Shoppers Drug Mart reward points, and using your phone or watch instead of cash. It's also the era of the Big Data Breach.

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"Certainly, I understand from the perspective of Stats Canada why the information is appealing to them," said Dr. Vanessa Iafolla of the University of Waterloo.

“Given the kind of data that banks can generate down to the most specific sense, what you spend and how you spend it, what our saving patterns are, what our consumption patterns are, what our debt patterns are – that’s really interesting information to Stats Canada,” she added in an interview.

"My concern is that we’re implementing yet another process of monitoring and requesting information from financial institutions about activities that Canadians essentially believe are private and personal."

To recap, Statistics Canada plans a pilot project, beginning in January, to get its hands on the banking records of 500,000 people.

Chief statistician Anil Arora has raised the possibility of delaying the launch, given an outcry over its plans, but says it needs to see our transactions so it can give us better reports on how we spend our money.

Chief statistician Anil Arora is pictured during a 2016 interview in Ottawa

Dave Chan/The Globe and Mail

Mr. Arora promised The Globe and Mail's Bill Curry in an interview that Canada's statisticians "always have and always will" protect our data, but the federal privacy commissioner has called a probe into the plan, nonetheless.

Canada's banks are clearly worried, too, stressing in a statement after a meeting Friday "the central importance of protecting the privacy and security of customer financial data and personal information."

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Mr. Arora said Statistics Canada was "caught off guard" by the negative reaction to its plans, which is, frankly, stunning given widespread concerns over data breaches, abuse of information, and, in general, how authorities are snooping on us.

The agency, of course, wouldn't consider it snooping, but rather a move to provide us with state-of-the-art measures of household spending.

Tracking how much you spend on your morning coffee is hardly perilous, but it's also nobody's business. And what about things you'd prefer were kept secret?

"A lot of very highly personal consumption patterns are going to come out that people may not want the government to know," said Dr. Iafolla, a lecturer in sociology and legal studies.

As an example, she cited what she dubbed "vice consumption" of, say, drugs, tobacco, alcohol or, now, legal marijuana.

"You might think about the purchase of things related to sex, so pornography if people are purchasing pornography, or sex toys and other aids," she said.

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"That may not be information that people would want the government to have, any more than they might want the government to know that they’re buying at Tim Hortons every morning. And how that information is going to be stored, and how it’s going to be sort of depersonalized, and whether the government can truly keep it safe is a question that is still open.”

Dr. Iafolla knows of what she speaks, having studied how Canadian authorities and bank officials already scour our financial moves to guard against money laundering and financing of terrorists.

That study by Dr. Iafolla and Anthony Amicelle, associate professor at the Université de Montréal’s School of Criminology, was published in the British Journal of Criminology.

“In the context of suspicious transactions, the justification there is basically preventing crime, stopping crime, holding criminals accountable, and I can see why that would be passed fairly easily by our politicians,” Dr. Iafolla said.

"But this is an administrative thing that is going to impact us in not a dissimilar way, and we don’t really understand, or it’s not very clear yet, what the safeguards are going to be for our personal data, nor what the end use of that personal data really is."

And what's to say, for example, that details won't be shared with the Canada Revenue Agency or the Financial Transactions and Report Analysis Centre of Canada, which is known as Fintrac?

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"Because financial institutions already have that reporting system internally for detecting money laundering, terrorist financing, financial crimes that they use to send information to Fintrac, it’s not a stretch to kind of ask them to add on or pull from transactions that are legitimate in the same kind of way," Dr. Iafolla said.

While Statistics Canada said it may delay the launch, Dr. Iafolla doesn't expect the agency to change its mind.

"This is the era of big data. The more data the better, seems to be the maxim. And we’re basically being rendered down to a data double where you and I exist in the real world as sort of flesh and blood corporeal people, but the real value that we have is in the data double that represents us abstractly in terms of what we do online, what we buy, where we go, what can we generate from our phones. All of that is sort of where the real monetized value is."

She doesn't expect Statistics Canada to monetize the information, but the "pause for thought" is there, regardless.

It’s one thing to agree to Facebook’s terms when you set up your page, for example.

"But it’s another thing to have that data for a non-criminal purpose or for a non-security purpose be repackaged and sent out to Statscan by banks where I’m not expecting that at all to happen.”

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Read more

Markets at a glance

Read more

Toronto home sales climb

Toronto home sales climbed in October as new listings fell, pushing prices higher and signalling the city's real estate market is tightening, The Globe and Mail’s Janet McFarland reports.

Read More

Lowe’s to shut several stores

Lowe’s Cos. Is closing several stores, among them 20 in the U.S. and 31 in Canada and other regions.

The retailer, which acquired Canada’s Rona a couple of years ago, said the move would allow it to “focus on its most profitable stores and improve the overall health of its store portfolio.”

Most of the U.S. employees affected will be offered jobs at other stores.

Lowe’s said it expects to take a hit of 28 to 34 US cents per share.

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The list of the stores to be shuttered is here.

What to watch for this week

There are two biggies, the U.S. midterm elections and the Federal Reserve's rate decision, but only one is expected to bring meaningful change.

And, as we’ve seen more than once, it’s best not to rely on what the polls tell you.

With that caveat out of the way, Tuesday's midterms are expected to result in a divided Congress, with the Democrats seizing control of the House, and the Republicans continuing to dominate the Senate.

What could that mean?

"A split Congress is most likely to lead to legislative gridlock, but that wouldn’t necessarily weigh on the markets or real economic growth," said Paul Ashworth, chief U.S. economist at Capital Economics.

“The upside risk (albeit a modest one) is that Trump could work with House Democrats and moderate Senate Republicans to push through a package of tax cuts for lower income earners or an increase in infrastructure spending,” he said.

“The downside risk (probably bigger than the upside) is that relations between Trump and the House Democrats quickly deteriorate, as new inquiries are launched into the President’s affairs that could lead to an attempted impeachment.”

Were that to happen, Mr. Ashworth said, he wouldn’t be surprised to see President Donald Trump “willing to use” a government shutdown to push for money for his wall on the Mexican border.

"A one- or two-week partial shutdown because funding wasn’t extended wouldn’t be the end of the world," Mr. Ashworth said.

"But a standoff over the debt ceiling, which could occur around the middle of next year, would be much more disruptive if the Treasury is unable to service the federal debt and triggers a technical default."

Tuesday's midterms mean the Fed will push its traditional Wednesday rate decision to Thursday, but the U.S. central bank isn't expected to change its benchmark this time out.

Markets, already jittery over rising interest rates, will be monitoring the Fed statement closely.

"The Fed’s gradualist stance means no rate hike this month, but the text will justify expectations for a December move," said CIBC World Markets chief economist Avery Shenfeld.

Read more

What else to watch for this week:

MONDAY

China’s on display throughout the week, key because its economic growth is a concern to markets and because Beijing is in the midst of a trade war with Washington that’s showing signs of easing.

This starts with the International Import Expo, which began in Shanghai, as The Globe and Mail’s Nathan VanderKlippe reports.

"It’s an opportunity for China to emphasize the size of its market and the opportunities it offers foreign firms if their governments don’t get in the way," said Mark Williams of Capital Economics.

In this Nov. 9, 2017, file photo, U.S. President Donald Trump and Chinese President Xi Jinping participate in a welcome ceremony at the Great Hall of the People in Beijing

Andrew Harnik/The Associated Press

It’s the country’s first imports fair, added Citigroup.

Also on Monday, Bank of Canada governor Stephen Poloz speaks to a business group in London, followed by a news conference.

And the earnings parade continues, with Finning International and Great Canadian Gaming Corp. on tap, among others.

Read More
TUESDAY

There are still things to do while you're waiting for the U.S. election results to start rolling in.

Statistics Canada releases its monthly look at the value of building permits, expected to show a rise of 0.5 per cent in September.

Watch, too, for a rate decision from Australia's central bank. The Reserve Bank of Australia isn't expected to change much, with its key rate at 1.5 per cent.

"Fears of a slowdown in China has weighed on some parts of the Australian economy, however we’ve also seen the Australian banks announce increases to their own variable mortgage rates, which appears to be weighing on consumer spending power," said CMC Markets chief analyst Michael Hewson.

"Could the RBA react to the higher funding costs being felt by Australian banks, or will they hold pat as they have done for over two years now?" he added.

"A slowing housing market might prompt the RBA to be more dovish than normal, however it is unlikely they’ll give any signs of a policy move in that direction."

Among the earnings: Archer-Daniels-Midland Co., Bausch Health Cos., CCL Industries, IAMGold Corp., Indigo Books & Music Inc. and Thomson Reuters Corp.

WEDNESDAY

Watch stocks and the U.S. dollar for reaction to the results of the midterms.

Earnings: ATS Automation Tooling Systems Inc., CGI Group Inc., Heroux-Devtek Inc., Home Capital Group Inc., Kinross Gold Corp., Linamar Corp., Manulife Financial Corp., Sun Life Financial Inc. and Western Forest Products Inc.

THURSDAY

Besides the Fed, China reports its trade numbers, with markets watching for the impact of the tariff war.

"The 10-per-cent tariff on US$200-billion of additional Chinese goods at the end of September could well have significant effects on the Chinese trade surplus in October," said CMC's Mr. Hewson.

“Judging by recent U.S. data in the other direction, the imposition of that extra 10-per-cent tariff doesn’t appear to have made that much difference, however these will be the first-full month numbers that we’ll be able to gauge the full effect.”

Canada Mortgage and Housing Corp. releases its monthly look at construction starts. Economists expect to see housing starts at an annual pace of 190,000 to 200,000 in October.

And some notable earnings: Autocanada Inc., Bombardier Inc., Brookfield Asset Management Inc., CI Financial Corp., Canadian Tire Corp., Cascades Inc., Hydro One Ltd., Magna International Inc., Martinrea International Inc., Paramount Resources Ltd., Power Corp. and Power Financial Corp., Quebecor Inc., Telus Corp., TMX Group Ltd., Trican Well Service Ltd. and Walt Disney Corp.

FRIDAY

We'll get the latest look at Britain's economy, with a report expected to show third-quarter growth of about 0.4 per cent.

"The recent performance of the U.K. economy appears to show an economy that, while still feeling the pressure from concerns about Brexit, is still performing well," Mr. Hewson said.

"Borrowing is down, while GDP growth appears to have remained steady at or near to the levels seen in Q2."

China reports inflation and other measures.

Earnings: GMP Capital Inc. and Onex Corp.

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