Business
Prime Minister Mark Carney Says Canada’s Economy Is Expected to Grow and Deficit to Fall
Prime Minister Mark Carney of Canada presented a budget update on Tuesday showing that his government’s deficit would be less than projected last fall and that the country’s economy would most likely grow over the coming year despite several key industries being buffeted by President Trump’s tariffs.
The spring economic update, a mini budget of sorts, came exactly one year after Mr. Carney returned the Liberal Party to power in his first political campaign and a few weeks after special elections and defections to the Liberals by members of other parties gave him a majority and the voting control of Parliament he had been denied in that election.
But if Mr. Carney intends to use his newfound political control to change direction, there was no indication. Instead, the update underscored his broad push to reduce Canada’s economic dependence on the United States by expanding trade with other countries and cutting government spending in some areas to expand military spending and large infrastructure projects like pipelines and nuclear power reactors.
“The world has been more uncertain than ever, but despite that, the Canadian economy has been resilient,” François-Philippe Champagne, the finance minister, told reporters on Tuesday. “We’re definitely entering a new world order.”
Mr. Carney, the former central banker of Canada and England, was an investment executive until he moved into politics last year. At that time, the Conservatives seemed certain to win the election to come. Justin Trudeau, the Liberal leader at the time, had become unpopular after more than nine years in office, and his government was seen as profligate by many voters.
But Mr. Carney’s background in finance reversed the party’s fortunes when voters appeared to be searching for stability in the midst of Mr. Trump’s trade war on Canada and his calls to turn the country into the 51st U.S. state.
Since then, Mr. Carney has, publicly at least, appeared to largely operate as his own finance minister. He again upstaged Mr. Champagne this week by announcing the only major change to be found in the update. On Monday, Mr. Carney said that Canada would set up a sovereign wealth fund like those found in Norway and several oil-rich nations in the Middle East. While the fund of 26 billion Canadian dollars, about $19 billion, is considerably smaller than those other countries’ pools of money, Canadians will be able to invest their own money in Canada’s new projects.
The update clarified that the 26 billion Canadian dollars will be pulled out of the government’s general revenues over the next three years.
The only other significant measure outlined in the update was a plan to spend 2 billion Canadian dollars, or $1.5 billion, to train 80,000 to 100,000 people in skilled construction jobs, and an additional 3.4 billion Canadian dollars, or about $2.5 billion, to fund apprenticeships.
That program follows similar efforts by the federal government and provinces going back several years to deal with Canada’s chronic shortage of construction workers.
Mr. Champagne said that previous efforts had been fragmented but that the new program would be more comprehensive.
“How many people know all these programs and all these agencies?” he said.
The document also forecast that, despite declines in the jobs-heavy automotive, steel, aluminum and forestry industries brought on by American tariffs, the economy would grow by 2 percent this year. Last year, it reached 1.7 percent after falling by 0.6 percent in the final three months.
The government said that it now expected the deficit for the current fiscal year, which began this month, to be 67 billion Canadian dollars, 11 billion dollars less than it had anticipated in the November budget.
While the recent spike in oil prices is being felt by Canadian motorists, air travelers and many industries, it is benefiting Canada’s oil industry and increasing tax revenues as well as employment in that sector. Overall, the government now expects its revenues to be 9 billion Canadian dollars higher than forecast in part because fewer people are likely to lose their jobs.
In the months since November’s budget, it remains unclear exactly what jobs and programs will be lost to budget cuts. And the government has introduced a variety of new spending measures like the investment fund and a temporary removal of a federal tax on gasoline and diesel fuel to partly offset the recent price hikes.
Mr. Champagne repeatedly said that the deficit remained low relative to other industrialized nations and that the government was “fiscally prudent” and careful where it cut.
“By spending less, we can invest more in the things that really matter to Canadians,” he said.
The race to bring air travel to the sky is heating up as Santa Cruz-based Joby Aviation and Toyota launch a joint venture to commercially produce air taxis.
The companies said in a news release Tuesday that they will work together on productivity, quality and costs and move toward mass production of Joby’s electric vertical takeoff aircraft. Joby and Toyota were first linked when Toyota made a nearly $400-million investment in the company in 2020. It has since increased its backing of the company to $900 million.
“It’s really meaningful for us to take on this challenge together with Joby, a partner that shares the same vision,” Toyota Chair Akio Toyoda said. “We believe this strengthened relationship is an important step forward in realizing the future mobility society.”
Joby‘s all-electric vertical takeoff vehicles are designed to hold four passengers and a pilot and can travel at up to 200 mph. The vehicle uses six tilting propellers to achieve vertical takeoff before switching to forward flight.
In February, Joby announced a partnership with Uber to start service in the United Arab Emirates this year, bringing on-demand air taxi rides to the country. It plans to expand to the U.S. after the completion of its final stage of Federal Aviation Administration testing.
Prior to its full FAA certification, Joby is hoping to launch early flight operations later this year as part of a White House program that will bring flights to several states, including New York, Texas and Arizona. Flights in California will not begin until after obtaining FAA certification.
Joby has been in a fierce battle to be the first with taxis in the sky with its Northern California competitor Archer Aviation. The two companies are involved in overlapping lawsuits, with Joby alleging corporate espionage against Archer, and Archer filing a suit alleging dubious ties to China that sparked an investigation into Joby by the U.S. International Trade Commission.
“Toyota has been by Joby’s side for nearly a decade, providing invaluable guidance and support as we built the foundation for manufacturing our aircraft,” JoeBen Bevirt, Joby’s chief executive and founder, said in the news release. “Together, we share a vision of making aerial mobility an everyday reality, and we look forward to delivering on that promise together.”
Joby Aviation’s shares, which have fallen more than 30% this year, climbed 3% on Tuesday to $8.92.
Disneyland Resort in Anaheim will offer $59 tickets for select evening admission to either theme park as part of a new promotion.
The one-day, one-park evening ticket offer will allow attendees to enter Disney California Adventure at 5 p.m. or Disneyland at 7 p.m. Park reservations are still required, as has been the case since the COVID-19 pandemic.
The offer only applies for admission from July 12 through Aug. 5 on Sundays to Wednesdays.
Disneyland Resort is commemorating its 70th anniversary through Aug. 9, and has introduced new shows and additions to rides as part of the occasion.
Walt Disney Co.’s theme parks and experiences business are a crucial boost to its finances, making up about 56% of the company’s operating income last fiscal year.
During the Burbank-based company’s most recent earnings call in May, Disney executives said attendance at its U.S.-based parks was down 1% compared with the prior year, a shift they attributed to “continued softness” in international visitations. However, the company said at the time that it was starting to move past those issues.
Disney’s experiences division reported $9.5 billion in revenue in that fiscal second quarter, up 7% compared with the same period a year ago, something executives said was due to higher guest spending domestically and more capacity on its cruise line.
An aging downtown office complex will be converted into apartments as part of an ambitious plan by local real estate companies to create 4,000 affordable housing units in Los Angeles.
The first project will be a $200-million makeover of the L.A. World Trade Center, a sprawling white elephant of an office complex on Figueroa Street built in the 1970s that will be turned into 512 apartments in one of the largest affordable housing conversions to date downtown.
Future projects being planned in the central city for delivery over the next five years will include other office-to-apartment conversions and new housing built from the ground up.
The 10-story World Trade Center, right, at Figueroa and Fourth streets in downtown Los Angeles, was built in the mid-1970s.
(Myung J. Chun / Los Angeles Times)
Behind the building campaign unveiled Monday are two of the region’s largest real estate companies, Jamison and Kennedy Wilson. Jamison is the city’s most prolific converter of offices to market-rate apartments and currently has a major makeover of a downtown office skyscraper underway for tenants who can pay top rents.
Kennedy Wilson, a real estate investment company based in Beverly Hills, owns Vintage Housing, which builds and operates affordable housing using tax credits and other state and federal financing to help fund it.
Vintage Housing and Jamison’s new affordable housing division, Arden Residential, will take on the campaign to build the housing where qualified tenants will pay rents below market rates.
Rents in the World Trade Center — which will be renamed Sky Castle when it opens in early 2028 — are expected to start at $937 for a one-bedroom unit. Some two- and three-bedroom units would rent for $1,100 and $1,300 per month, respectively, developers said.
Sky Castle will have shared amenities found in more expensive modern apartments, the developers said, such as a fitness center, resident lounge and co-working space. It already has six tennis courts on the roof, which may be converted to pickleball courts, Jamison Chief Executive Garrett Lee said.
The goal is to build higher quality affordable housing by using efficient construction methods Jamison has learned through building more than 8,000 market-rate apartments in the past, Lee said. The makeover of the World Trade Center will mark Jamison’s 15th conversion of an office building to housing.
The plan to redevelop the L.A. World Trade Center, bottom left, is one of the largest affordable housing conversions to date downtown.
(Myung J. Chun / Los Angeles Times)
The 10-story World Trade Center was built in the mid-1970s to fanfare saying it would be home to international companies. In 1976, The Times described the center as a place to prepare for an overseas trip where visitors could get passports and visas, as well as exchange dollars for francs, marks, rubles and other currency. There was a language school and branches of U.S., Swiss and Japanese banks.
By the mid-1980s, the 400,000-square-foot office complex covering a city block at Figueroa and Fourth streets had lost its international flavor and was falling out of favor with corporate tenants who were moving into glossy new skyscrapers on Bunker Hill and in other locations.
The building has been cleared of remaining office tenants to allow work to begin in August, Lee said.
Kennedy Wilson is a nationwide operator of market-rate apartments that has also moved into building affordable housing in the last decade, said Nicholas Bridges, global head of capital markets at the company.
Building affordable, workforce housing “in almost all cases requires public subsidies,” Bridges said, and Kennedy Wilson has developed expertise in assembling “a cocktail of public financing sources” that includes low-income housing tax credits and tax-exempt bonds.
In the past, many housing developers have shied away from building affordable housing because assembling the subsidies needed to make construction profitable is challenging.
An artist’s rendering shows what the L.A. World Trade Center could look like after being redeveloped into affordable housing. The new complex is to be called Sky Castle.
(Ian Camarillo)
“It’s complicated,” Bridges said, “and not for the faint of heart.”
Eligible tenants must earn between 30% and 80% of the median income in the area where the housing is built.
Jamison and Kennedy Wilson will develop about 15 affordable housing projects between downtown and the 405 Freeway, Bridges said, many of them in aging office buildings such as the World Trade Center that are already owned by Jamison and are close to public transit.
Substantial potential for affordable housing lies in L.A.’s underused office buildings, he said.
“In this post-COVID world, the way people are utilizing office buildings, particularly older office buildings, has just fundamentally changed,” he said.
It makes sense for developers of conventional multifamily housing to move to building affordable housing, Lee said, because the government supports it through subsidies, zoning reform and the fast-tracking of construction permits. The city of Los Angeles also recently streamlined its adaptive reuse rules to make it easier to convert office buildings to housing.
“There are a lot of incentives pushing us in this direction,” Lee said.
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