According to Bloomberg, the Royal Bank of Canada is anticipating this country will likely endure a “moderate and short-lived” recession next year as the economy succumbs to the pressure brought on by stubborn inflation, higher rates, and constraints in the labour market.

“This recession will be moderate and short-lived by historical standards—and can be reversed once inflation settles enough for central banks to lower rates,” economists Nathan Janzen and Claire Fan wrote in their latest report.

RBC’s outlook includes back-to-back annualized contractions of half a percentage point in the middle quarters of next year, before returning to growth of 0.2 percent in the fourth quarter of 2023.

Nonetheless, Janzen and Fan warned the Bank of Canada can’t afford to take its foot off the gas in the fight against inflation.

“Though higher rates will technically push Canada toward a contraction, the Bank of Canada now has little choice but to act. … A scenario in which Canadians believe inflation will run well past the bank’s target range of one to three percent could upend almost three decades of exceptionally effective inflation targeting policy. It could also require much larger and more damaging interest rate hikes to re-anchor prices,” they wrote.

The Bank of Canada is widely expected to hike its target for the overnight interest rate to 2.25 percent from 1.5 percent at its policy meeting next week. That would be the fourth time the rate has gone up this year as the central bank attempts to wrestle down inflation that is sitting at close to a 40-year high of 7.7 percent. RBC is expecting the consumer price index will rise at least 5.0 percent through the first quarter of 2023, and will eventually slide back into the Bank of Canada’s target range of one to three percent in the third quarter of next year, but without quite reaching the goal of 2.0 percent.

While a recession appears to be in the offing, RBC’s economists said they expect the unemployment rate will only rise modestly compared to past downturns as businesses are already struggling amid a “historic labour squeeze.

That squeeze was evident earlier this week in the Bank of Canada’s latest Business Outlook Survey, which showed four out of every ten respondents said their company was facing a labour shortage, and 68 percent said the tight labour conditions were worse than a year earlier. Those dynamics are compelling employers to pay up more for talent: 73 percent of respondents said they’re expecting to pay higher wages over the next year, with an average pay hike of 5.8 percent.

With unemployment sitting at a record low of 5.1 percent as of May, RBC is estimating the rate will rise to 6.6 percent next year as the economic downturn plays out. That rise of one-and-a-half percentage points would be small by historical standards: RBC looked at past recessions and found the unemployment rate rose from as little as 0.6 percent (in 1951-53) to as much as a seven-point surge in 2019-20).

Source: Bloomberg

Key Strategic Highlights:

• Strategic access to Texas and the Southern US. Texas is the world’s 9th largest and the United States’ 2nd largest economy by GDP.2

• Good natured® is expected to supply FormTex’s extruded rollstock sheet requirements from its Ex-Tech facility, which is expected to result in material positive financial synergies.
• Significant potential to increase FormTex’s current capacity utilization rate of 40% through higher production uptime and add new capacity with additional thermoforming machines in the current facility footprint, and utilization of additional warehousing space.
• FormTex’s proximity to one of the 10 largest outbound shipping endpoints in North America will significantly reduce shipping costs to the Company’s customers in the southern United States.
• FormTex’s location provides direct access to the 6th largest U.S. container port, creating a highly efficient port of entry for raw materials coming from Europe and South America.
good natured® will be able to leverage Houston-based manufacturing, importing, warehousing, and logistics to service the southeastern U.S. market, which includes Florida (the 4th largest state by GDP), Georgia (the 9th largest state by GDP), and North Carolina (the 11th largest state by GDP).
• All FormTex customers are net new customers not currently being serviced by the • Company, creating cross-selling opportunities for other good natured® products and services.
• The Acquisition was an arm’s length transaction and is subject to customary post-closing adjustments.

Mr. Christopher Constable resigned as a director of the Company for personal reasons and stepped down as a member and chairman of the audit committee of the Board. The resignation of Mr. Constable did.

The resignation of Mr. Constable did not result from any dispute or disagreement with the Company or the Board on any matter relating to the Company’s operations, policies or practices.

Mr. Jeffrey Guzy has had key executive positions at several large international companies, including Loral Space, Sprint International, Verizon and IBM.  Mr. Guzy is a private investor and advisor to Aprize Satellite and to several other hi-tech companies. Mr. Guzy has an MBA in Strategic Planning and Management from The Wharton School of the University of Pennsylvania, an M.S. in Systems Engineering from the University of Pennsylvania; a B.S. in Electrical Engineering from Penn State University; and a Certificate in Theology from Georgetown University. Mr. Guzy’s extensive business and financial oversight experience led to the conclusion that he should serve as a director and qualify as an audit committee financial expert.Mr. Yongwei Hu, CEO and Chairman of BON stated, “We thank Chris for his service to us as our board member and wish him all the best in his future endeavours. At the same time, we are excited to welcome Jeffrey as a new independent director to BON’s Board. Jeffrey’s experience will complement our existing directors’ skills and experiences, and he will provide critical insight and direction as we continue to expand our operations. We look forward to Jeffrey’s contributions and expect to leverage his financial and governance experience in furtherance of our growth in the coming years.”

Pangea CEO Pratap Sandhu says, “Pangea Natural Foods has partnered with experienced food scientists to formulate its products, with a focus on delivering high-quality food products to consumers. We look forward to introducing our products to a broad range of customers and widening our products’ distribution throughout North America.

Along the journey toward this listing, Pangea has focused on developing products using quality ingredients. We believe the key to the Company’s growth will be providing consumers with very nutritious, satisfying foods with great taste and texture. We truly believe our loyal customers speak for themselves.”

The Company produces and sells plant-based patties that are both nutritious and free of GMO ingredients, fillers, antibiotics, hormones, and bioengineered ingredients. Pangea’s plant-based patties are manufactured in the Vancouver lower mainland at an in-house facility approved by both the Canadian Food Inspection Agency and the U.S. Food and Drug Administration. To provide a convenient experience for its customers, the Company offers its products for purchase via e-commerce platforms and traditional retail outlets.

Mr. Sandhu adds, “Each vegan patty is handmade with rigorous standards, using locally sourced whole food ingredients such as leeks, bell peppers, spinach, potatoes, black beans, carrots, chickpeas, mushrooms and breadcrumbs. Additionally, Pangea uses pea protein instead of soy protein in its formulation.”

Bodybuilding.com, the world’s largest online fitness store, has struck a deal to partner with Retail Ecommerce Ventures (REV), a global leader in e-commerce with a rapidly growing roster of well-known brands.

Bodybuilding.com specializes in dietary, sports, and bodybuilding supplements. Its platform includes an e-commerce store with private label (“Signature”) and third-party brands, an interactive fitness coaching app (“Bodyfit”), and a loyal online community, (“BodySpace and Forum”), with over 15 million registered members.

REV’s all-star team of e-commerce veterans will bring their deep domain expertise into substantial operational roles within Bodybuilding.com and help build upon the company’s considerable online footprint.

“We couldn’t be more excited to become partners in the Bodybuilding.com platform. My dad was a professional bodybuilder, and this is a brand I have been passionate about for nearly two decades”, said Tai Lopez, who co-founded REV along with Alex Mehr. “This company’s history is only in its first inning, and at a time when there’s so much noise and confusion on the internet, Bodybuilding.com’s trusted content, products, and community are more valuable than ever.”

This partnership marks yet another high-profile deal for REV, whose mission is to transform iconic legacy brands into e-commerce success stories. Their impressive portfolio includes globally-recognized brands, such as Pier 1, Radio Shack, Dressbarn, Ralph & Russo, Stein Mart, Franklin Mint, Modell’s, MentorBox, FarmersCart, Linens ‘n Things, and more.

“We are thrilled to welcome Retail Ecommerce Ventures into the Bodybuilding.com family”, said Karl Walsh, CEO of Bodybuilding.com. “Their expertise in e-commerce, digital marketing, technology, and community-building is a significant value-add to our platform and will further catalyze our growth both domestically and internationally. At Bodybuilding.com, we are stewards of a legacy that supports individuals building their bodies and their lives – and this relationship will enable us to achieve our mission at an even greater scale.”

Bodybuilding.com has been helping people achieve their fitness, health, and wellness goals since 1999 alongside a loyal community of lifestyle enthusiasts that now boasts +11 million social media followers and +5 million YouTube subscribers.