The Bank of Canada held its benchmark interest rate steady at five percent in its last three decisions of 2023. However, that was up steeply from 0.25 percent in March 2022, when the central bank decided to hike interest rates in an attempt to cool inflation.

In a series of year-end speeches, Tiff Macklem, the governor of the Bank of Canada, acknowledged that the multiple interest rate increases had indeed cut inflation (which was last measured by StatCan at 3.1 percent, year over year, in November).

So, when will interest rates fall? Economists are divided on the issue, not surprisingly. Some of them expect the Bank of Canada to lower its benchmark rate early in 2024. Others expect the central bank to wait until later in the year.

Banks have already begun to cut five-year fixed-rate mortgage rates, presumably in anticipation of rate cuts to come. And also because some 2.2 million Canadian household mortgages are due for renewal over the next two years, according to the Canada Mortgage and Housing Corp. The competition for better rates will be stiff.

Gypsum Management & Supply Inc. announced it has reached a deal to acquire Kamco Supply Co. Founded in 1939 by the Swerdlick family, Brooklyn-based Kamco is a supplier of ceilings, wallboard, steel, lumber, and related construction products. It operates five distribution facilities in the New York metropolitan area. The transaction is expected to close during GMS’s fourth quarter of 2024, which ends April 30.

Retail sales rose by 0.7 percent in October to $66.9 billion in October, according to the latest StatCan data. Sales were up in seven of nine subsectors, led by increases at motor vehicle and parts dealers. LBM and garden sales edged down by 0.2 percent to $3.88 billion. Core retail sales, which exclude automotive and fuel categories, were up 1.2 percent in October.

Sales of existing U.S. homes rose by 0.8 percent, according to the (U.S.) National Association of Realtors. It was the first increase after five consecutive monthly declines. The annualized pace of 3.82 million units beat analyst estimates of 3.76 million units. In the single-family segment, however, sales remained 7.3 percent lower than a year earlier.

Throwback Thursday is a regular feature in which we dip into the archives of the Hardlines Weekly Report.

In our final issue of 2003, we ran a story with the headline: “RONA CEO anticipates acquisition by mid 2004.”

RONA had just completed, in May of 2003, the second of its public offerings, which had brought in $280 million combined. Now RONA, which had 540 stores on its roster, was looking for “a large operation in western Canada which will either be taken over or signed up as a RONA member,” according to Robert Dutton (pictured), then-president and CEO.

That company turned out to be Alberta LBM retailer Totem Building Supplies, which was operating 14 stores with two more under construction when RONA announced its purchase for $100 million cash in December 2004. The deal would close the following spring.

Photo: York Regional Police

Working with the FBI, York Regional Police say they have confirmed the identity of over 50 victims across the U.S. who have fallen prey to a Canadian Home Depot gift card scam. The victims were allegedly instructed online to buy Home Depot gift cards and then provide the numbers of the cards to Toronto area residents. Between September and November, investigators executed search warrants at five locations in Markham and the City of Toronto, seizing approximately $600,000 in Home Depot products and $67,000 in unused Home Depot store credits. Six men face a variety of criminal charges, York Regional Police said in a release on Dec. 14.

Canada’s inflation rate remained unchanged at 3.1 percent in November, StatCan reported yesterday. Many economists had expected the rate to drop below the three percent threshold.

However, inflation for the month on both sides of the border was apparently low enough to convince the Bank of Canada (and the U.S. Federal Reserve) not to raise their central rates. In expectation of rate drops in 2024, many Canadian banks have responded by dropping their five-year fixed mortgage rates—to the lowest rates seen since May.

The latest instalment of our podcast series What’s In Store goes online this week. In this bilingual episode, we talk to Lisa Bergeron, director of business development and government affairs at Jeld-Wen. She shares with us how the harmonization of building codes across the provinces and territories is affecting the window business, and how Jeld-Wen’s product offering is responding. Sign up now to get updates about the latest podcasts in your inbox!

At BMR Group, Simon Gouin has been promoted to the position of vice president, business development, effective Jan. 8, 2024. Gouin joined BMR Group in 2021 as senior director, business development – eastern Canada. He brings over 17 years of business development experience in the industry, including nearly a decade managing hardware stores.

In his new role, he will oversee the expansion of BMR Group’s network in eastern Canada and maintain relationships with existing dealers. Gouin will continue to report to André Lavoie, BMR’s executive vice president, shared services.

The (U.S.) National Association of Homebuilders reported this week that builder confidence rose to 37 percent this month from 34 percent in November. Economists surveyed by Reuters expected a confidence rate of 36 percent. November’s condience level was the lowest since December 2022.