***** Canada Business News *****

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Contract work on rise in Canada: StatsCan


In the Canadian job market, contract work has outpaced all other forms of temporary employment over the past decade, surging against rising unemployment during the 2008 financial crisis and resulting recession.

In 2009, 52 per cent of all temporary jobs were contract positions, accounting for almost one million workers, Statistics Canada's Diane Galarneau said in a report recently.

"Since 1997, contract employment has been the main source of growth in temporary work," she said.

Professionals make up a large percentage of contract employees, and tend to be concentrated in the health, education and public administration fields. Contract workers also tend to be more educated and slightly younger than permanent workers.

However, contract workers tend to be paid about 14 per cent less each hour than their permanent counterparts, while managing with less job security and little to no benefits.

Overall, 1.8 million workers held temporary positions in 2009, accounting for 12.5 per cent of paid employment. This is a slight decrease from the peak of 13.2 per cent in 2005.

Contract jobs, though, have increased by more than three per cent between 2005 and 2009, despite the overall decline in employment in 2008, she said.

By contrast, the average overall annual growth rate for employment slowed to 1.1 per cent for permanent jobs and a 0.4 per cent decline for temporary jobs.

"Although temporary jobs are often seen as a single group, trends and underlying issues vary greatly according to the type of job," she said.

Between 2005 and 2009 seasonal employment decreased by more than three per cent, particularly in traditional fields such as fishing and forestry, manufacturing, accommodation and food services.

Casual employment, jobs with varying hours depending on the needs of the employer, fell more than 10 per cent between 2005 and 2009. Almost half of all casual workers, about 47 per cent, are 25 or younger. And a quarter of that group are students.

The wage gap between seasonal and casual positions and permanent positions is even wider, at almost 34 per cent.

This can be accounted for by various issues, including younger worker age, lower education, smaller company size and fewer available hours.

 

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Bank of Canada may tip hand about 2011 rate hike this week

OTTAWA — The suspense building up to Tuesday’s Bank of Canada rate decision revolves around whether the central bank will say anything in its statement to nix market expectations for a rate hike in early 2011.

Despite a week of data that suggested there’s a significant slowdown underway in Canadian economic activity, fixed-income markets continue to price in 50-50 odds for an increase in the central bank’s key policy rate in March, and a 100 per cent chance that happens in April.

Yet, most economists at Canada’s big banks don’t envisage a rate hike until July, given recent weakness in trade and real estate investment and the uncertainty sparked by the re-emergence of Europe’s debt woes.

“It is possible the Bank of Canada will take on a more dovish tone in this statement, simply because the market has been a bit aggressive in pricing in (monetary policy) tightening,” said Douglas Porter, deputy chief economist at BMO Capital Markets.

The yield on the two-year Government of Canada bond, viewed as a proxy as to where the central bank rate is headed, climbed steadily in November on improving economic data in the United States and elsewhere, hitting a high on Nov. 25 of 1.74 per cent but had dropped slightly to the 1.6 per cent range as of last Friday.

Compounding matters, however, was an inflation reading in October that surprised on the upside, with headline and core readings both rising 0.4 per cent on a month-over-month period, to hit annual rates of 2.4 per cent and 1.8 per cent, respectively. The central bank sets policy to hit and maintain annual inflation of two per cent.

“I don’t know if the Bank of Canada knows what it is going to be doing next spring to talk confidently at this point,” said Avery Shenfeld, chief economist at CIBC World Markets.

Views vary over how quickly the Bank of Canada will move to raise its key rate in 2011. The C.D. Howe Institute’s monetary policy council, made up of

Bay Street economists and academics, are divided as to what happens to the benchmark rate six months from now, with opinions ranging from one per cent, or unchanged, to as high as 2.25 per cent.

Weaker third-quarter GDP data — at one per cent annualized below the central bank’s forecast of 1.6 per cent — and mixed-to-disappointing November labour figures have provided fresh ammunition for those who believe the central bank should remain on an extended rate-hike hiatus.

One analyst, David Madani of Capital Economics, has mused that central bank governor Mark Carney might need to consider cutting rates.

He said he hopes the language in the central bank’s rate statement regarding output growth and projected inflation “be softened to reflect the disappointing tone of the incoming data.”

He added the present central bank forecast of 2.6 per cent annualized growth in the final three months of 2010 “now looks far too optimistic,” especially after data revealed the economy contracted in October.

Furthermore, analysts say the Bank of Canada may remain cautious on rate hikes so long as the Federal Reserve forges ahead with its $600-billion US asset-purchase plan — which will keep the loonie elevated and, hence, make sales abroad that much tougher. (Net trade was a massive drag on third-quarter growth.)

Those who expect a rate hike early in 2011, however, argue the central bank’s Tuesday statement will likely highlight the improving economic data globally — from Asia to Germany and the United States, the non-farm payrolls notwithstanding — to offset some of the weaker domestic readings.

Stewart Hall, economist at HSBC Securities Canada, said the central bank likely remains concerned about the record levels of household debt. And the GDP report highlighted a drop in the quarter in the savings rate, to 3.3 per cent from 6.1 per cent in the preceding quarter.

“That is certainly an element at work in the policy mix,” said Mr. Hall, who has predicted a March rate increase.

Postmedia News

 

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Canada's jobless rate hits 2-year low
Unemployment rate falls to 7.6% as economy creates 15,200 new positions


Read more: http://www.cbc.ca/canada/story/2010/12/03/money-canada-jobs.html#ixzz17OQdAwJo

Canada's unemployment rate has fallen to its lowest level in almost two years, but there are fewer full-time jobs, Statistics Canada says.

The unemployment rate fell to 7.6 per cent in November as the economy created 15,200 new positions, the agency said Friday.

The rate hasn't been that low since January 2009.

While part-time work rose by 26,700, there were 11,500 fewer full-time workers in November.

Analysts were expecting between 15,000 and 20,000 jobs to be created.

The Canadian economy created 15,000 jobs in November, despite a decline in manufacturing positions, Statistics Canada says. (J.P. Maczulski/Reuters)
"While the headline drop in the unemployment rate is a nice gift, the details beneath that shiny surface are a little less generous," said BMO analyst Doug Porter.

"The overall gain in jobs is middle of the road, but the drop in full-time, private sector employment suggests that the economy is struggling to find work now that the recession's job losses have been recouped."

Over the past year, part-time employment has grown by four per cent, or 127,000 jobs, a faster pace than the 1.4 per cent growth in full-time positions, or 192,000 full-time jobs.

Since November 2009, employment has risen by 318,000, or 1.9 per cent.

Youths not looking
But the agency also said there was a notable decline in the number of youths in the labour market.

Statistics Canada said that the November decline in unemployment is almost all the result of 43,600 Canadians, mostly young people, leaving the labour market.

While employment among youths was largely unchanged in the month, there were fewer youths looking for work. As a result, the unemployment rate in that category fell 1.4 percentage points to 13.6 per cent. Since June, the youth participation rate has declined 2.1 percentage points, to 63.2 per cent in November, the lowest since August 1999.

Statistics Canada said November's employment gains in health care and social assistance, retail and wholesale trade, and accommodation and food services were mostly offset by declines in manufacturing as well as in finance, insurance, real estate and leasing.

Only three of 10 provinces saw job gains last month, with Ontario leading the way with some 31,200 new jobs, cutting its jobless rate to 8.2 per cent. Saskatchewan and British Columbia were the only others with job gains, with B.C.'s unemployment rate down to 6.9 per cent.

Quebec was the biggest loser on the month with a loss of 14,100 jobs, but its jobless rate eased to 7.9 per cent.

"For better or worse, the monthly headline job creation figure rarely does justice to the actual state of the Canadian labour market, and November was no exception," said Pascal Gauthier, senior economist at TD Economics.

"One thing the headline figure reflected accurately, however, is the slow-motion state of job creation."

U.S. stalls
Similar data in the U.S. showed the jobless rate rose to 9.8 per cent, as the economy only produced 39,000 new jobs. Analysts were expecting about 150,000 jobs.

This was a troubling sign for Canada as it ships about 75 per cent of its exports south of the border.

Finance Minister Jim Flaherty said he was "encouraged" by Canada's unemployment numbers, but found little comfort in the U.S. results.

"It's a bit discouraging to see the unemployment numbers in the United States — there's a persisting concern with respect to the American economy," Flaherty told a news conference in Montreal.



Read more: http://www.cbc.ca/canada/story/2010/12/03/money-canada-jobs.html#ixzz17OQ7Mj6l

 

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Bank of Canada keeps key rate on hold

OTTAWA — The Bank of Canada said Tuesday economic activity has weakened due to a poor trade performance that could "dampen" the anticipated recovery in net exports, prompting it to keep its key policy unchanged at one per cent.


In its most recent forecast, the central bank said it expected net exports and business investment to power the economy as overstretched consumers pared back spending. But only one of those factors — capital spending by firms — is holding up in the present environment.


"This underlines a previously identified risk that a combination of disappointing productivity performance and persistent strength in the Canadian dollar could dampen the expected recovery of net exports," the central bank said in its statement explaining its latest rate move.


The decision was largely expected, given heightened tensions in financial markets from Europe's debt woes and a string of tepid economic data.


As a result, keeping the policy rate unchanged "leaves considerable money stimulus in place, consistent with achieving the two per cent inflation target in an environment of significant excess supply," the central bank said, reiterating that any further rate increase would need to be "carefully considered."


The Canadian dollar, which had been trading near parity with its U.S. counterpart ahead of the rate statement, lost ground once the central bank decision was released. Bond yields, however, were up slightly, as traders increased their risk appetite on news that the Bush-era tax cuts would be extended for at least two years.


The statement was a "pretty clear signal of the Bank of Canada's intent to remain on pause for the foreseeable future," said Michael Woolfolk, managing director at BNY Mellon Global Markets.


"With the bank concerned now about the economy's increasing reliance on net exports and recent weakness in net exports amidst ongoing currency strength, it will take particular care not to unnecessarily bolster the loonie via higher rates."


The Bank of Canada's decision Tuesday followed a move hours earlier by Australia's central bank to keep its benchmark rate unchanged, citing heightened risks in Europe and an expected slowdown in job creation over the coming year.


A series of mixed-to-disappointing domestic economic data were released over the past week just as the Bank of Canada, led by governor Mark Carney, contemplated its next move. Among the key economic indicators to emerge: meagre third-quarter growth of one per cent annualized, below central bank expectations for a 1.6 per cent advance; a job gain of 15,200 in November, although the headline figure masked overall market sluggishness as full-time and private-sector positions fell; and a bigger-than-expected fall in the value of building permits.


Tuesday's statement was shorter than the previous Oct. 19 decision — at which time it scaled back growth expectations — and tried to recap recent economic developments by pointing out negative and positive developments. Central bank watchers were keen to see if the rate statement would nix market expectations, based on trading in fixed-income markets, for a rate hike in either March or April of next year.


Commenting on recent third-quarter data, Bank of Canada said household spending was stronger than anticipated and growth in business investment — which Carney had repeatedly said was crucial to the recovery — was "robust."


However, net exports proved to be a "significant drag," shaving 3.4 percentage points off the headline GDP figure. It also contributed to Canada posting a record current-account deficit, equivalent to roughly four per cent four per cent of GDP, in the July-to-September period.


Higher-than-expected inflation readings for October — 2.4 per cent headline and 1.8 per cent core — had people wondering if this would force the central bank's hand in terms of rates, given the Bank of Canada's mandate to keep inflation at two per cent. The statement, however, said inflation dynamics "have been broadly in line" with expectations, and underlying pressures remain "largely unchanged."


"The tone of the statement was defensive and had enough of a tint of pessimism to validate the decision," said Andrew Pyle, wealth adviser and markets commentator at ScotiaMcLeod. "The bank sees the export factor as an offset to what is still a very favourable domestic demand recovery in Canada. But, the real concern is clearly what is happening across the pond with respect to sovereign debt."


The central bank said the global economic recovery "is proceeding largely as expected, although risks have increased. As anticipated, private domestic demand in the United States is picking up slowly, while growth in emerging market economies has begun to ease to a more sustainable, but still robust, pace."


At least one prominent U.S. economist predicted big things for the American economy now that the uncertainty over the Bush-era tax cuts looks to be settled.


"Instead of another year expanding at no more than the U.S. economy's potential growth rate — with job gains of 1.2 million and unemployment hovering near 10 per cent — real GDP growth will accelerate to four per cent, job gains will pick up to 2.8 million, and the unemployment rate will decline to around 8.5 per cent by year's end," said Mark Zandi, chief economist at Moody's Analytics.


While data from Europe suggest a modest recovery is underway on that continent, "there is an increased risk that sovereign debt concerns in several countries could trigger renewed strains in global financial markets," the central bank statement said.


This is the final Bank of Canada rate statement for the 2010 calendar year. The next decision comes on Jan. 18, followed shortly after by an updated economic forecast. The central bank projected three per cent growth in Canada this year and 2.3 per cent in 2011.

 

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Work-at-home Canadians on the rise, but not by much: StatsCan


Enthusiastic predictions of a pajama-clad workforce linked electronically and commute times reduced to the distance between the bed and the dining room table have yet to materialize, a new Statistics Canada report suggests.


The ranks of Canadians working from home over the last decade have grown only slightly, increasing from 1.4 million people in 2000 — or 10.2 per cent of the workforce — to 1.8 million in 2008, or 11. 2 per cent of all workers. However, those who work from home accounted for 60 per cent of all self-employed people in 2008, up from 50 per cent eight years earlier.


When self-employed workers are included, the proportion of Canadians working at least part of the time from home rose from 17 to 19 per cent.


"In the early days of the tech revolution — the frenzy — many of these predictions gave people the impression that this would happen in two years or five years or 10 years," says Bob Fortier, president of the Canadian Telework Association and InnoVisions Canada, a telework consulting firm. "The Information Age is moving faster than the Industrial Age, but it won't be built in a week or a year."


Fortier maintains that work-from-home arrangements are growing steadily, though he calls it a "silent revolution" because many employees have informal arrangements with their managers that don't show up on formal organizational surveys.


The "slower than expected" growth of people working from home is partly due to resistance from managers concerned about "difficulty supervising employees, lack of communication, security issues associated with information handling, decline in team spirit and sense of attachment to the company, and problems with the confidentiality of information," Statistics Canada notes.


The simple passage of time and introduction of new generations to the workplace will resolve some of this, Fortier says, noting that his two teenage children are prime examples of the multi-tasking, plugged-in cohorts to come.


"They'll be so comfortable with the technology that if they come across a boss who says, 'I don't believe in this telework or I'm not ready to do it,' they're just going to say, 'Next,'" he says. "One of the key barriers was and continues to be managerial resistance. You could have a boss that went to Jurassic University, real old-school."


Toronto's Tracie Wagman has been happily working at home full-time for a year and a half, running Help! We've Got Kids, an online directory of family resources in several Canadian cities. She previously worked in high-pressure retail and telecom jobs and says she longed for the flexibility to be available to her children, aged eight and five.


"I want to be around my kids when they need me, and I couldn't be here for them when I was working at a corporation," she says. "They've said to me, 'We're so happy that you work at home, Mommy, because now we can see you.'"


Working from home allows her to pause at 4 p.m. to help her kids with homework or make dinner, Wagman says, but when she's in her home office, she's completely focused — no laundry during the day and no pyjamas at work. Her husband works outside the house, and on the rare occasion he spends a morning at home working, he's amazed by how productive he is, she says. But she still doesn't know of any companies that formally allow their employees to work from home.


"It's the old-school mentality of, 'If I can't see you, you're not working,'" she says. "I don't work any less than I did; I probably work more."


Widely available mobile technology means that "telework" is not even synonymous with working from home anymore because connected workers could do their jobs under a tree, says Fortier.


"One day — maybe not in 10 years or so — I see the term 'telework' disappearing because it will just be part of work life," he says. "Location will be something that's irrelevant. The focus will be on work as something you do, not a place you go."


Twitter.com/sproudfoot


sproudfoot@postmedia.com



Selected findings from the Statistics Canada report on working from home:


- 67 per cent of employees who work at home do so for 10 hours or less per week.


- 23 per cent of managers and professionals worked from home at least some of the time in 2008, compared to seven per cent for retail and service workers.


- 54 per cent of those who worked at home had a university degree, compared to 25 per cent of those who never worked at home.


- 52 per cent of employees who worked at home had annual incomes above $60,000, compared to 25 per cent of those who didn't work from home.


- 10 per cent of women and 12 per cent of men work at home.


- Among professionals, 19 per cent of women and 29 per cent of men worked at home.


- Among self-employed workers, 67 per cent of women worked from home, compared to 56 per cent of men.


- 13 per cent of employees with children aged 12 and under worked from home, compared to 10 per cent of those without young children.


- 12 per cent of self-employed women said they worked from home for family reasons, compared to three per cent of their male counterparts.


- 25 per cent of those who worked from home said they did so because it was a job requirement or they had no choice, 23 per cent said it offered better work conditions and 18 per cent said home was their usual place of work.


- Employees who live in urban areas are more likely to work from home (12 per cent) than those in other areas (nine per cent).


- Seven per cent of employees who lived within four kilometres of their workplace worked from home, compared to 13 per cent of those who lived at least 30 kilometres away.

 

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First Nations could get access to millions of investment dollars

OTTAWA — The Harper government is quietly setting the stage for a landmark move that could pump millions of dollars worth of investment into reserves across the country and mark a change in the relationship between Ottawa and Canada's First Nations, iPolitics has learned.


It would also pave the way for the first-ever First Nations bond issue — a precedent that could lead to future bond issues by other First Nations in Canada and the U.S.


"It's a game changer in that it is evidence that the relationship is changing," says Robert Shepherd, a professor of public policy and public administration at Carleton University in Ottawa and a former official at Indian and Northern Affairs.


"It's a game changer in the sense that you have now got a public sector willing to use private sector vehicles to assist with very public sector problems. In that sense, it's no longer government as the 'I'm the Dad and I'm watching over my kids.' It's very much, 'For years you have told us you want to be a partner, well, we're giving you all the toys the big boys have.' "


However, Shepherd warns it could also be a risky move if too many First Nations default on their payments or if investors suddenly decide to sell off their bonds. While it will likely benefit more prosperous First Nations which will be able to borrow money at a much lower interest rate and manage a more sophisticated financial instrument, he said it might not do much to help some of the poorest First Nations which are often those who most need to invest in infrastructure such as roads, sewers and water treatment plants.


The key to the move lies in a regulatory change the government is proposing that is designed to help the First Nations Finance Authority launch an $85-million bond issue.


Many First Nations have difficulty borrowing money from banks to finance infrastructure investment in their communities. Those who are able to get loans often face crushing interest rates 30 to 50 per cent higher than those paid by other orders of government.


The FNFA wants to raise money through a bond issue to allow First Nations to obtain the financing they need for those projects at much lower interest rates.


Currently, however, the First Nations Fiscal and Statistical Management Act only allows First Nations to put property tax revenue up as security for a bond — something the government estimates is worth $3 million. The proposed regulatory change would allow First Nations to use a much wider list of revenues to secure financing — revenues it believes are worth $82 million.


Revenues from leases, fees, oil and gas royalties, and businesses owned by a First Nation, transfers from provincial or municipal governments and, in some cases, even federal transfers could be used to secure financing.


Government officials estimate the change could save First Nations $49 million over the next decade. Once $10 million from the federal government for a Credit Enhancement Fund is taken into account, officials estimate the net benefit of the move will be $39 million over 10 years.


"These regulations will allow for access to affordable capital and flexible terms, thereby enhancing First Nations' ability to invest in infrastructure and strengthening the foundation for economic development and investment on reserves," the government wrote in the notice of the proposed change.


The move will also benefit investors, the government predicts.


"Investors will be provided with an additional investment product to diversify their portfolios. Pension funds and offshore investors have a large appetite for long-term subnational government lending because of its stability."


"Rating agencies look forward to rating an FNFA bond as it will be the first First Nation government subnational bond created and there is a known potential for more such activity in the United States."


One of those applauding the move and saying she is willing to invest in the new bond is Jean Crowder, NDP First Nations critic.


Crowder, a former municipal councillor, said the proposal will allow First Nations to have access to some of the same kind of financing as municipalities to address the huge infrastructure deficit on reserves — problems that have increased as the population on reserves has grown.


"It's about time," she said. "We have had this paternalistic, colonialistic attitude that says that First Nations aren't capable of managing money . . . this is a step towards self sufficiency."


Liberal critic Todd Russell also welcomed the move.


"It will provide First Nations the opportunity to obtain loans for infrastructure and investment at far better rates than they now get through large commercial banks."


Assembly of First Nations national chief Shawn Atleo said he was aware of plans to issue bonds but had not been notified of the proposed regulatory change.

 

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Canada's trade deficit declines in October

OTTAWA — Canada's trade deficit narrowed more than expected in October as the pace of exports —_especially to overseas markets —_outpaced imports, Statistics Canada reported Friday.


The overall gap between shipments in and out of Canada shrank to $1.71 billion during the month, following a revised $2.31-billion deficit in September, the federal agency said. Most economists had forecast a trade surplus of around $2 billion in October.


Exports rose 3.1 per cent to $33.8 billion in October, led by industrial goods and materials, "as exports of precious metals and copper ores reached record highs," the agency said.


Imports gained 1.2 per cent to $35.5 billion, mainly due to shipments of energy and automotive products, as volumes continued an upward trend that began in March 2009.


Meanwhile, exports to the United States —_Canada's largest trading partner —_edged up by just 0.4 per cent, while imports grew 1.7 per cent. As a results, Canada's surplus with the U.S. fell to $1.1 billion in October from $1.4 billion the previous month. Last month's surplus was the smallest with the U.S. since September 1992, Statistics Canada said.


"Although the narrowing of Canada's trade deficit is good news, the dollar-related worsening of Canada's trade balance with the U.S. is the one soft spot in this month's report, and is a factor that is likely to weigh on Canadian growth in the months ahead," said CIBC World Markets economist Emanuella Enenajor.


Exports to countries other than the U.S. jumped 10.1 per cent to $10.1 billion —_the highest level since November 2008 —_and imports advanced 0.3 per cent, leading to a trade deficit in those markets of $2.8 billion, down from $3.7 billion in September.


Also Friday, the U.S. reported its trade deficit with the rest of the world narrowed 13 per cent to $38.7 billion U.S. in October.


Canada's economic growth slowed to a one per cent annualized pace in the third quarter of this year, as exports declined due to strong Canadian dollar and weak demand from the south of the border.


On Thursday, the Bank of Canada decided to keep its trendsetting interest rate unchanged at one per cent, pointing to an uncertain global recovery and concerns that European debt levels could rattle fragile financial markets.


Benjamin Reitzes, an economist at BMO Capital Markets, said Friday's trade figures are "certainly welcome news after three straight months of $2-billion or more deficits."


"The shift away from reliance on the U.S. is also a positive, but they still take in the bulk of Canada's exports, keeping our economies closely aligned. After two challenging quarters, the trade picture looks as though it improved in Q4."

 

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Chinese interest rate decision sets off positive trading day

China set off a positive day on most markets around the world on Monday when it announced it was holding the line on its interest rates and it reported higher-than expected inflation figures.


That news sent commodity prices higher and also promoted equity advances, though North American indexes had pared early gains by the end of the day and the Nasdaq composite fell to close in negative territory.


On the Toronto Stock Exchange, the benchmark S&P/TSX composite index rose 56.39 points, or 0.43 per cent, to close at 13,295.86. Seven of the 10-sub-indexes gained on Monday, led by energy.


The price of crude oil rose 82 cents U.S. on the New York Mercantile Exchange, closing at $88.61 U.S. a barrel. Gold shot up $13.10 U.S. to $1,398.00 U.S. an ounce.


The Canadian dollar, which earlier in the day had been up more than 40 basis points, closed Monday at 99.24 cents U.S. for a gain of 17 basis points.


"We got the relief that there was no China rate hike over the weekend — which was rumoured — even with inflation being a little higher than people thought it was going to be," Greg Taylor, a money manager at Aurion Capital Management in Toronto, told Bloomberg. "We have a little of a window to year-end with no Chinese rate hikes. That's got the commodities going."


The junior Venture exchange rose 6.45 points, or 0.30 per cent, to 2,130.75.


U.S. stocks started falling in the afternoon as the Senate began voting on an agreement to extend Bush-era tax cuts for a further two years.


The Dow Jones industrial average held on to some of its earlier gains, closing at 11,428, an increase of 18.24 points, or 0.16 per cent, but the Nasdaq composite fell 12.63 points, or 0.48 per cent, to 2,624.91.


Energy producers gained Monday after China announced its refineries had been running at record rates last month. Suncor Energy rose 1.19 per cent to $36.63 and Canadian Natural Resources gained 2.41 per cent to $43.26.


Gold Wheaton rose 13.73 per cent to $4.99 on Monday after announcing it had agreed to be purchased by Franco-Nevada. Quadra FNX Mining, also benefited from a separate deal in which it agreed to sell 56.5 Gold Wheaton shares to Franco-Nevada, representing about a 35 per cent stake in the company. Quadra FNX shares rose 5.94 per cent to $16.04. Shares in purchaser Franco Nevada, on the other hand, dropped 3.77 per cent to $32.15.


Ivanhoe Mines got a boost on Monday when an analyst raised his rating on the stock to "buy" from "hold," closing at $24.73 for a gain of 2.02 per cent.


Research in Motion shares fell to $61.25, a 2.33 per cent drop, after an analyst at Exane BNP Paribas cut his fourth-quarter earnings forecast for the BlackBerry maker and lowered his rating on that stock to "neutral" from "outperform."

 

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Canadians, their businesses owe $25B in overdue taxes

OTTAWA — Canadian individuals and businesses owe $25 billion in overdue taxes to the federal government, newly released figures show — enough to pay off more than half the national deficit if the money were collected.


The tab for overdue taxes has been climbing in recent years, according to the Canada Revenue Agency. The $25-billion figure, the amount owing as of March 31, represents an increase of more than 35 per cent over the total owing five years ago, when overdue taxes stood at $18.5 billion.


Figures tabled last week in the House of Commons also show the Canada Revenue Agency wrote off $1.9 billion in taxes as uncollectible in the most recent fiscal year. Such write-offs have been relatively stable in the past five years.


The battle against delinquent taxpayers comes as the Conservatives look for ways to tackle the federal deficit, which is projected to hit $45 billion this year.


A Canada Revenue Agency spokesman emphasized that the overdue-taxes tally is a "snapshot" that reflects debt accumulated over several years.


"New accounts are added to it continuously, while others are collected in full and some are written off," spokesman Noel Carisse said in an emailed statement.


The amount of overdue taxes represents a relatively small fraction of the roughly $358 billion in taxes and duties processed last year by the Canada Revenue Agency, which employs more than 40,000 people.


Carisse noted the "vast majority of Canadian citizens and businesses pay their tax obligations when due."


Last year, the agency collected more than $27 billion

 

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Industrial capacity on the rise

OTTAWA — Canadian industries increases their production capacity in the third quarter of this year, led by the manufacturing sector, Statistics Canada said Monday.


The rate of plant capacity in use during the July-to-September period rose to 78.1 per cent from 76.9 per cent in the previous three months, the federal agency said.


"This was the fifth consecutive increase since the record low rate of 67.8 per cent in the second quarter of 2009," the agency said. "The current rate remains below levels prior to the economic downturn."


On average, economists had expected capacity of 76.5 per cent in the third quarter.


Capacity at manufacturing outlets increased to 81.2 per cent —_in line with the rate in the fourth quarter of 2007 — from 78.7 per cent in the second quarter of this year, Statistics Canada said.


The agency said "the sector has been on an upward trend since the second quarter of 2009, when it reached a record low of 64.8 per cent."


Fifteen of the 21 major manufacturing industries tracked by Statistics Canada saw capacity use increase in the third quarter of 2010.

 

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Canadian dollar edges higher against U.S. greenback

The Canadian dollar edged higher against its U.S. counterpart on Monday morning, lifted by a slightly weaker greenback and firm commodity prices on strong Chinese economic data.


Chinese industrial output in November beat expectations, while inflation climbed to a 28-month high. The upbeat data helped to send commodities higher.


"Stronger economic news out of China got the ball rolling," said Jack Spitz, managing director of foreign exchange at National Bank Financial.


"Where it's a pro-risk environment equities are trading stronger. The U.S. dollar itself is weaker along with the Japanese yen. So the Canadian dollar along with other commodity based currencies are all trading higher this morning."


At 7:50 a.m. (1250 GMT), the Canadian dollar CAD=D4 stood at C$1.0070 to the U.S. dollar, or 99.30 U.S. cents, up slightly from Friday's finish at C$1.0094 to the U.S. dollar, or 99.07 U.S. cents.


Spitz said markets will be focused on a speech by Bank of Canada Governor Mark Carney later on Monday. The speech is entitled "Reflections on the Economic Outlook" and is expected to be followed by a press conference.


The central bank chief may offer hints on how deep into 2011 he will resume his stalled rate hike campaign given the economy's decelerating growth.


Canadian bond prices were largely flat to lower on Monday, tracking U.S. Treasuries whose prices edged down as investors sold the bonds in anticipation of higher growth and deeper deficits in the United States.


The two-year bond CA2YT=RR ticked 5 Canadian cents lower to yield 1.744 per cent, while the 10-year bond CA10YT=RR was down 15 Canadian cents to yield 3.326 per cent.

 

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Canadians not in Christmas spending mood: Poll

OTTAWA — Canadians don't appear to be opening their wallets widely this Christmas, results of a poll suggest.


The Ipsos Loyalty poll, conducted in early December, found one-quarter of Canadians expect to spend less on Christmas gifts this year than last year. Just 11 per cent believe they'll spend more.


On average, Canadians expect to spend a little more than $600 on gifts for family members and friends, with just more than half saying they plan to spend $500 or less.


One in 20 expect to spend nothing, about the same number who plan to spend $2,000 or more.


"Canadians appear to be tightening their belts," said Dave Pierzchala, vice-president of Ipsos Loyalty. "These numbers seem to indicate that Canadians should be counting on more love and less loot this Christmas season."


Among those planning to spend less this year, 46 per cent say they have less money and 28 per cent say they're in worse financial shape than they were last year, according to the poll's findings.


Those who plan to spend more either have more people on this year's Christmas list (27 per cent) or say their financial position has improved (24 per cent).


The Ipsos poll also found that Canadians are focused on bargains, with little loyalty to specific retailers. Only five per cent said they always buy from the same stores, regardless of price. The rest said they shop around for the best price.


Nearly two-thirds said they'd buy something from a website they'd never used before if they were able to get exactly what they wanted for less than at a department store.


The poll of 1,198 adults was conducted between Nov. 26 and Dec. 6. It is considered accurate to within 2.94 percentage points, plus or minus, 19 times out of 20.

 

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TSX posts first decline in four sessions

The Toronto Stock Exchange saw its first decline in four sessions as oil prices dropped on Tuesday.


The benchmark S&P/TSX fell 15.78 points, or 0.12 per cent, to 13,280.08. Of its 10 sub-indexes, four advanced, but the major sectors — financials, energy and materials — all declined.


The price of crude oil closed on the New York Mercantile Exchange at $88.28 U.S. a barrel, a loss of 33 cents U.S.. Gold, however, rebounded from earlier losses to gain $6.30 U.S. and close at $1,404.30 U.S. an ounce.


The Canadian dollar pared earlier gains to close at 99.35 cents U.S., an increase of 11 basis points. Bank of Canada governor Mark Carney has said the dollar's "persistent strength" could hamper Canada's economic recovery.


"One of the risks is persistent strength of the Canadian dollar could interact with weak productivity performance and reinforce this trade drag that we have seen," Carney said after a speech Monday in Toronto. "To some extent that risk is being realized, which is one of the things we will have to assess as we sit down in January."


Canadian productivity posted a 0.1 per cent gain in the third quarter, higher than the 0.1 per cent loss that experts had predicted but still nothing to write home about.


"After a few heartening quarters early in the recovery, Canada's mediocre productivity performance of recent years has re-emerged in spades," said BMO Capital Markets deputy chief economist Douglas Porter.


"Statistics Canada delivered vivid evidence that Canada's recovery continues to rely more on brawn than brain. Productivity was held back by the achingly slow GDP growth in the quarter, while hours worked were basically flat."


Canada's junior Venture exchange lost 13.05 points, or 0.61 per cent to close at 2,117.70.


November retail sales figures reported in the U.S. on Tuesday were higher than expected. Also on Tuesday, the U.S. Federal Reserve's open market committee announced that it would hold the line on interest rates and continue with its program of securities purchases announced last month, as the recovery has been "disappointingly slow."


U.S. markets spiked after the Fed announcement, then later tumbled before recovering to post gains at the close. The Dow Jones industrial average was up 47.98 points or 0.42 per cent at 11,476.54, and the Nasdaq composite closed at 2,627.72, for a gain of 2.81 points or 0.11 per cent.


Energy producers fell as oil prices declined, with Encana Corp. dropping 1.43 per cent to $28.38 and shares in Petrobank Energy and Resources losing 2.42 per cent to $41.51.


Royal Bank of Canada lost 0.91 per cent to close at $52.34.


Falling wheat futures hit fertilizer stocks — Agrium Inc. shares fell 1.71 per cent to $81.52.


Barrick Gold Corp. fell 1.45 per cent to $53.53 despite the gain in the price of gold.

 

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New car sales increased in October: StatsCan

OTTAWA — The number of new vehicles sold in Canada declined in October by 0.3 per cent, with truck sales decreasing by 3.7 per cent, Statistics Canada reported Tuesday.


Although truck sales —_which include SUVs, minivans and buses —_declined, they remained higher than passenger car sales as 74,614 units were sold that month.


In October, 134,427 new vehicles were sold, the federal agency reported.


Passenger car sales increased for a second consecutive month, rising 4.2 per cent to 59,813 units. North American-built passenger cars saw a 6.8 per cent increase in sales, which was a main contributor to the overall rise in new car purchases.


Sales of overseas-built cars increased by one per cent, although the level of sales were lower than 2009 records, according to Statistics Canada.


New car sales declined in six provinces in October, with Alberta seeing the biggest decrease, down seven per cent, after five months of steady increases.


Sales in Saskatchewan fell 8.6 per cent after two consecutive months of reported gains.


Quebec sales were up for a second consecutive month, with a 4.1 per cent increase in October.


Preliminary industry data indicate that the number of new motor vehicles sold remained unchanged in November.

 

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Economic indicators rise in November

OTTAWA — A key gauge of Canada's economic performance rose in November for a second straight month, led by the housing sector and stock market, Statistics Canada said Tuesday.


The federal agency's composite index of leading indicators rose 0.3 per cent during the month, following a similar revised increase in October.


On average, economists had expected the index to advance by 0.5 per cent in November.


Six of the 10 components tracked by the agency rose, while three were unchanged and one was lower.


The housing index increased two per cent in November, after six consecutive monthly declines of around three per cent.


"Both housing starts and existing home sales firmed after sizable retreats from their highs in the spring," Statistics Canada said. "The upturn in housing was reflected in a levelling off of furniture and appliance sales, after four straight declines. Spending on other durable goods continued to advance steadily."


The index for S&P/TSX stock prices in Toronto continued its upward trend, rising 2.8 per cent on the strength of commodity prices. Meanwhile, the U.S. leading indicator edged up 0.2 per cent.


"The rebound in equities has led the way, but a better tone in the U.S. data has also helped," Douglas Porter, deputy chief economist at BMO Capital Markets, said in a note ahead of Tuesday's report.