Saturday, May 31, 2008

Slowing auto sector drives economy into Q1 decline: StatsCan

The Canadian economy shrank at an annualized rate of 0.3 per cent over the first three months of the year, the first such contraction since the second quarter of 2003, Statistics Canada said Friday.

Cutbacks in manufacturing got much of the blame, as a big drawdown in motor-vehicle inventories led to lower auto manufacturing and exports. Bad weather also contributed to the weak first-quarter reading.

Statistics Canada said the economy started to lose momentum in the second half of 2007 as exports declined.

Canada's current account surplus beats expectations

Canada's current account surplus with the rest of the world increased sharply to $5.56 billion on a seasonally adjusted basis in the first quarter of 2008, partly on the strength of higher prices for oil and gas exports, Statistics Canada reported Thursday.

The current account — a broad measure of trade and money flows — covers goods, services, interest payments and other items but excludes capital transactions such as stock purchases and corporate takeovers.

Caisse de dépôt president leaving to join Power Corp.

Henri-Paul Rousseau, the man who has presided over the massive Caisse de dépôt et placement du Québec since September 2002, is leaving the pension fund to join Power Corp.

Rousseau will join Power Corp. and Power Financial Corp. on Jan. 1, 2009, serving both companies as vice-chairman.

"As for me, at age 60, this is the right time to take up a new challenge in the private sector," Rousseau said in a release.

He will remain as an adviser to the Caisse's board of directors and officers for the next three months until August 31.

RBC profit falls 27 per cent amid U.S. market woes

RBC profit falls 27 per cent amid U.S. market woesRoyal Bank CEO Gordon Nixon said the bank is 'not happy about these writedowns.'(Adrian Wyld/Canadian Press)

Electronic filing of tax returns grows in popularity

Canadians are increasingly embracing electronic tax returns rather than filing on paper, the Canada Revenue Agency says.

New figures show that more than 55 per cent of returns filed this tax year have been by Netfile (where taxpayers file their returns themselves through the web) or Efile (where professional tax preparers use the web to file client returns).

Tax returns filed Method 2008 2007 Change Efile


Friday, May 30, 2008

Russian scientist proposes small nuclear plants as clean northern energy source

As people and governments in Canada's North pay skyrocketing fuel prices to meet their energy needs, a Russian scientist at this week's Canadian Arctic Summit is proposing so-called mini-nuclear reactors as a cleaner alternative to fossil fuels.

Many northern communities, especially in Nunavut and the Northwest Territories, burn diesel to produce electricity — a practice that is not only expensive, but also contributes to climate change, an issue that worries northern leaders.

Yukon officials take part in Alaska pipeline meetings

The Yukon government has been taking part in meetings this week on the proposed Alaskan natural gas pipeline, hoping to reap rewards from a project that could bring billions of dollars to the northern state.

Alaska's government held public meetings in Anchorage starting Wednesday to explain its agreement with Calgary-based TransCanada Corp. to build a pipeline from the state's North Slope, through the Yukon and British Columbia, to a pipeline hub in Alberta. The meetings were scheduled to end Friday.

Dell to enter low-cost laptop market

Dell Inc. is set to join the growing number of personal computer makers offering low-cost laptops for consumers in the developing world.

CEO and founder Michael Dell showed the small notebook to editor Brian Lam of the technology website Gizmodo at the All Things Digital Conference in Carlsbad, Calif., on Wednesday.

While the company did not reveal any pricing or specifications for the laptop, the company's official blog said Dell has positioned the device "as the perfect device for the next billion internet users."

Commodity analyst Dennis Gartman sees the Canadian dollar staying above parity

Commodity analyst Dennis Gartman sees the Canadian dollar staying above parity

Canada's latest free-trade amigo is Peru

The Harper government signed a free trade agreement on Thursday with Peru, setting the scene for it to be tabled for debate in Parliament.

If all goes as planned, the South American nation will join a roster of Canadian free-trade partners that includes the United States, Mexico, Costa Rica, Chile and Israel.

A similar deal involving Iceland, Norway, Switzerland and Liechtenstein is in the works, and talks have been held with Colombia and the Dominican Republic.

TD profit slips on weaker wholesale banking

TD profit slips on weaker wholesale bankingTD 3-month chart

Second-quarter profit at TD Bank Financial Group fell 3.1 per cent as "challenging financial market conditions" hurt results in its wholesale banking division, TD said Wednesday.

U.S. mishaps leave CIBC with $1.1B loss

U.S. mishaps leave CIBC with $1.1B lossCIBC 3-month chart

Caught in U.S. credit-market chaos, Canadian Imperial Bank of Commerce is reporting a second-quarter loss of $1.1 billion, compared with a profit of $807 million a year earlier.

Quebec offers new incentives to boost lumber use

The Quebec government says it will invest $16 million over six years to increase lumber use in construction, Natural Resouces Minister Claude Béchard said.

The government is hoping to development expertise in the industry that will help wood compete with steel and concrete, Béchard said Wednesday.

"What we announced today will roughly triple the use of wood that we now use in construction in Quebec," he said.

The government's goal is to increase the use of wood in construction to about 360 million board feet by 2014. (A board foot is a unit of measurement used in the lumber industry that represents the volume of a piece of lumber that is one foot wide, one foot long and one inch thick.)

Montreal Climate Exchange starts trading

Activity on Canada's first carbon-trading market kicked off Friday with the launch of the Montreal Climate Exchange.

A joint venture between the Montreal Exchange and the Chicago Climate Exchange, the new exchange will allow the trading of futures contracts on greenhouse gases.

Each contract is equal to 100 Canada carbon dioxide equivalent units. Each unit, as defined by the Canadian government, is an entitlement to emit one metric ton of carbon dioxide equivalent.

CRTC modifies decision on telecoms consumer agency

The Canadian Radio-television and Telecommunications Commission on Friday altered its decision granting conditional approval to the Commissioner for Complaints for Telecommunications Services Inc., a new consumer agency established by service providers.

After reviewing the applications and related materials submitted by the industry requesting modifications to the CRTC's initial December 2007 decision, the broadcasting and telecommunications regulator decided to maintain the agency's mandatory membership requirements for a period of only three years, the CRTC said in a news release.

Wednesday, May 28, 2008

Don't expect oil or gas prices to fall this summer, NEB warns

Canadians shouldn't expect any relief from high oil, gasoline and natural gas prices in the coming months, the National Energy Board says in its summer outlook.

Oil is expected to average $130 US a barrel through the summer, about where it's trading now. The NEB cites a tight oil market due to seasonal demand, geopolitical supply risks, low spare producing capacity, and the weakness of the U.S. dollar, which it said was attracting more money to commodities.

Sustaining boom focus of western premiers meeting, Wall says

Getting ready to host his first western premiers conference, Saskatchewan Premier Brad Wall says he wants to focus on sustaining the West's economic boom and working on issues of common interest.

"This is a once-in-a-lifetime opportunity for Western Canada," Wall said.

"There's the opportunity … to really co-operate on important environmental issues related to energy development and on enhanced oil recovery, energy security, those kind of things."

Nortel to close Calgary operations

Telecommunications equipment-maker Nortel Networks is closing down its operations in Calgary by 2009, the company said Tuesday.

Company spokesman Mohammed Nakhooda did not say how many of the roughly 400 employees at the Westwinds Innovation Centre would lose their jobs as a result of the closure.

"Unfortunately, some people will be losing their jobs," he said. "Many will also be relocated, and many will be tele-work or home-based."

Government wireless airwaves auction underway

Government wireless airwaves auction underwayIndustry Minister Jim Prentice announced the opening of the wireless spectrum auction on Tuesday, a process that could take up to a month.(CBC)

Banner year forecast for Canadian auto sales

Banner year forecast for Canadian auto salesA banner year is expected for Canadian vehicle sales in 2008, while sales in the U.S. are expected to be the weakest in 10 years.(David Zalubowski/Associated Press)

Tuesday, May 27, 2008

Scotiabank says it won't meet this year's profit growth target

Scotiabank says it won't meet this year's profit growth targetScotiabank 3-month trading

The Bank of Nova Scotia said credit losses and weaker capital markets make it unlikely it will reach its target for earnings growth this year.

Globalization being undone by high oil costs: CIBC

The high price of energy is undercutting the advantages of globalization by raising transportation costs so much that they are forcing businesses to look closer to home, says a CIBC World Markets report.

"Globalization is reversible," the bank's chief economist, Jeff Rubin, wrote in the study released Tuesday.

"In a world of triple-digit oil prices, distance costs money. And while trade liberalization and technology may have flattened the world, rising transportation prices will once again make it rounder."

BCE shares rise as Supreme Court agrees to speedy hearing

BCE shares rise as Supreme Court agrees to speedy hearingBCE 3-month chart

Shares of BCE jumped Tuesday after the Supreme Court of Canada agreed to fast track a hearing that could determine the fate of the biggest takeover in Canadian history.

U.S. home prices drop at sharpest rate in 20 years

U.S. home prices drop at sharpest rate in 20 yearsFifteen of 20 metro areas in the Standard and Poor's/Case-Shiller home price survey reported record annual price declines, with five plunging more than 20 per cent. (Mel Evans/Associated Press)

NDP to introduce 'net neutrality' private member's bill

The federal New Democrats will introduce a private member's bill on Wednesday that would entrench the principle of "net neutrality" and enact rules to keep the internet free from interference by service providers, an NDP MP told a rally Tuesday in Ottawa.

Parliament Hill was beset by about 300 people impassioned by an issue not usually associated with protest marches: internet access. "Save the internet," read one angry placard. "Say no to Big Brother watching you," said another.

BMO profit dips on slowdown in investment banking

BMO profit dips on slowdown in investment bankingBMO 3-month chart

Second-quarter earnings fell at BMO Financial Group as it reported weaker investment banking business, but it said credit markets were improving.

Another big jump in gas prices

Another big jump in gas pricesPump prices have hit record highs in both Canada and the U.S., surveys say.(Paul Sakuma/Associated Press)

Pump prices are at another record high in Canada, with a litre of gasoline surging to an average of more than $1.32, according to the latest national survey.

TSX drops 236 points as resources and financials falter

TSX drops 236 points as resources and financials falterS&P/TSX composite index

The TSX tumbled more than 200 points in Tuesday trading as energy prices fell and bank earnings failed to impress.

Monday, May 26, 2008

Railpower building new Quebec plant

Railpower Technologies Corp. said Monday it plans to build a new manufacturing plant in Saint-Jean-sur-Richelieu, Que., with the help of the Ontario Teachers' Pension Plan and the provincial government.

The new plant is expected to create about 125 new jobs, the maker of hybrid-powered locomotives said.

"This facility is expected to significantly improve our manufacturing efficiencies and provide Railpower with the ability to rapidly expand its current production," said Jose Mathieu, the president and CEO of the company.

Talisman shares climb on report of Chinese interest

Talisman shares climb on report of Chinese interestTalisman 3-month TSX chart

Talisman Energy Inc. gained more than six per cent on Monday amid reports a Chinese oil company may be poised to buy some of its assets or make a takeover bid.

Saskatchewan tops country in retail growth

Saskatchewan's booming resource economy helped push retail sales in the province up by 13 per cent in 2007 to $13 billion, or double the growth of 2006, according to a new report released Monday by Statistics Canada.

The province's retail sales growth rate was more than double the 5.8 per cent national rate of expansion last year. Across the country, retailers sold an estimated $412 billion worth of goods and services in 2007.

Alberta slid to second place in 2007 after leading the provinces in annual retail sales growth for three consecutive years. Alberta's retail sales grew by 9.3 per cent to $61.2 billion.

Air Transat increases fuel surcharge

Montreal-based carrier Air Transat is raising its fuel surcharges on flights destined for Britain and Europe as fuel costs continue to surge.

The increase will apply to new reservations for flights departing Wednesday and thereafter.

When the new surcharge is applied, a traveller leaving Canada for Austria will now pay $145, up from $85, in fuel surcharges for one-way travel.

In recent weeks, a number of airlines have announced fuel surcharge hikes, citing the rising cost of fuel. Air Canada raised its ticket prices by $40 for short-haul flights and $80 for flights of more than 1,601.6 kilometres.

Nuclear location decision expected next month

Ontario Energy Minister Gerry Phillips said he expects to announce next month the location of the new nuclear reactors planned for the province.

Most of the attention so far has been on which nuclear technology will be chosen for the new power stations: Candu reactors, ones built by the French company Areva, or the U.S. company Westinghouse.

But Phillips said he's almost ready to announce exactly where the reactors will be situated.

Sunday, May 25, 2008

March retail sales post slim gain

Retail sales in Canada in March grew by a slim 0.1 per cent to $35.5 billion as harsh winter weather across much of the country held back consumer purchases during the month.

Economists had been forecasting a rise of 0.3 per cent for March.

Coupled with a strong rise in sales in January and a decrease in February, overall sales for the first quarter were up 1.8 per cent, a growth rate similar to that of the previous quarter, Statistics Canada said Thursday.

B.C. nets $441 million windfall from oil and gas rights

The B.C. government's coffers are brimming with new cash after the monthly sale of oil and gas rights brought in a record amount of nearly half a billion dollars.

The province raised $441 million in the monthly auction of oil and gas rights in the sale Wednesday. That was a record for one month, and more than a third of the total for the entire previous fiscal year, setting another record.

The province's energy minister said new gas discoveries in northeastern B.C. are helping to fuel the bidding for drilling licenses.

Saturday, May 24, 2008

MTS wireless alliance dissolves

A consortium headed by Manitoba Telecom Services Inc. that planned to bid on wireless spectrum in Canada has fallen apart, just five days before the federal government starts to auction off the new airwaves.

The Winnipeg-based company, also known as MTS Allstream, announced Thursday that its partnership with the Canada Pension Plan Investment Board and U.S.-based private equity firm Blackstone Capital Partners had dissolved.

The company said it remains qualified to bid on the Industry Canada auction, set to begin on May 27, but did not say if it would do so.

Pump prices lift inflation rate

The rising price Canadians have been paying at the gasoline pumps helped to push up the country's annual rate of inflation in April for the first time in five months.

Statistics Canada reported Wednesday that the consumer price index rose 1.7 per cent between April 2007 and April 2008, up from a 1.4 per cent increase in March. This was the first acceleration in the overall rate of inflation since November 2007.

Getting the inflation picture

Supply of unsold U.S. homes at 23-year high

Resales of U.S. homes fell again in April, while the backlog of unsold properties continued to balloon, an industry group said Friday.

The National Association of Realtors said April sales of existing homes dropped by one per cent to a seasonally adjusted annual rate of 4.89 million units, matching the all-time low set in January. The pace of the decline in sales, however, was slower than in March.

The backlog of 4.55 million unsold properties on the market was the highest level since June 1985. At the current pace of sales, there are 11.2 months of unsold supply on the market.

Aeroplan Income Fund unveils name change

Aeroplan Income Fund said Friday it plans to change its name to Groupe Aeroplan Inc. as part of its conversion to a public corporation.

The change is contained in an information circular mailed out by the loyalty program operator recently to unitholders.

Groupe Aeroplan "will have its own visual identity distinct from Aeroplan's and its other subsidiaries including Nectar, which will continue to represent … loyalty programs in Canada and the United Kingdom," the fund said in release.

Federal surplus comes in at $10.2B

The federal government's surplus for its latest fiscal year came in around $10.2 billion, the finance department said Friday.

The government said its budgetary revenues for the year that concluded on March 31 increased by $10.6 billion, or 4.6 per cent, driven by gains in income tax revenues and other revenues.

Spending on government programs grew by $12.5 billion, or 6.8 per cent, because of higher transfer payments and operating expenses of departments and agencies.

Friday, May 23, 2008

Battered BCE shares move higher as deal doubts linger

Battered BCE shares move higher as deal doubts lingerBCE 3-month chart

Shares of BCE Inc. recovered some lost ground Friday, a day after they plunged 12 per cent following a court ruling that cast doubt on whether the takeover of the telecom would proceed.

BCE shares plunge 12% after court ruling

BCE shares plunge 12% after court rulingBCE 3-month trading chart

Stock in BCE Inc. tumbled in very heavy trading Thursday after a court ruling threw into question the biggest takeover in Canadian history.

TSX-listed stocks in for big profit jump this year: CIBC

TSX-listed stocks in for big profit jump this year: CIBCS&P/TSX composite index 3-month chart

Companies listed on the TSX will see their profits jump by 21 per cent this year, according to an upgraded forecast from CIBC World Markets.

Homeowners spent $19.7B on renovations in 2007

About 1.5 million Canadian homeowners spent nearly $19.7 billion in 2007 painting their walls, rolling out new carpeting and hanging wallpaper, the Canada Mortgage and Housing Corporation said Thursday in an annual survey.

On average, consumers spent $12,800 on their home renovation projects, the federal agency reported.

Sticking to a budget was a priority for 46 per cent of consumers who refurbished their homes, while 37 per cent said they forked over more than they had planned. The remaining 17 per cent said they spent less than they had expected to pay.

Yukon environmental reviewers prepare to assess 1st full-fledged mine

The Yukon Environmental and Socio-Economic Assessment Board says it is breaking new ground by preparing a final screening report of the proposed Carmacks Copper project.

The board's environmental screening of Western Copper Corp.'s proposed copper mine will be the board's first assessment of a full-fledged mine, as opposed to a mineral exploration project.

"We are not swayed by the importance of having a mine in operation or anything else," Stephen Mills, an executive committee member with the board, said Wednesday.

Thursday, May 22, 2008

TSX halts trading in BCE shares

The Toronto Stock Exchange halted all trading in BCE shares Thursday afternoon after a glitch with the exchange's new Quantum trading system caused "data integrity concerns."

The TSX Group said trading would remain halted until further notice.

"A trading message protocol issue this morning caused a service interruption in trading for approximately 45 minutes," a brief statement from the exchange said.

"This issue has created some data integrity concerns and therefore the decision has been to halt trading in this issue."

American Airlines to charge for 1st checked bag

Hammered by rising fuel costs and facing a soft U.S. economy, American Airlines will begin charging for a first checked bag and announced cuts to its flight capacity.

AMR Corporation, the Fort Worth, Texas-based parent company of American Airlines, said Wednesday it will start charging $15 US for a first checked piece of luggage on June 15.

The airline said it will also raise fees for a variety of other services, including reservation services, and shipping pets and oversized bags.

Oil retreats from $135 peak

Oil prices retreated Thursday after earlier touching a record high above $135 US a barrel.

Light sweet crude for July delivery fell $2.36 to settle at $130.81 a barrel on the New York Mercantile Exchange.

In overnight trading, oil reached a new peak of $135.09, but prices came back down as the U.S. dollar regained some of its lost ground.

Many observers believe oil will continue the march that has seen the price surge from $65 per barrel roughly a year ago.

Big drop in mortgage rates

Canadian financial institutions have begun to slash their mortgage rates amid lower borrowing costs in the bond market and more competition for mortgage business.

BMO Bank of Montreal was the first to announce lower rates. Effective Wednesday, a five-year closed mortgage will carry a posted rate of 6.65 per cent, a drop of a little more than a third of a percentage point.

Bigger cuts apply to shorter-term mortgages. BMO's one-year closed mortgage drops 8/10ths of a percentage point to 6.15 per cent. Its two- and three-year closed mortgages tumbled by 0.85 of a percentage point to 6.15 per cent.

Ford cutting production as gasoline prices climb

Ford cutting production as gasoline prices climbFord 3-month NYSE chart

Ford Motor Co. said Thursday it is cutting North American production of its large trucks and sport utility vehicles in the face of rising gasoline prices and the weak U.S. economy.

March wholesale trade sees small rebound

Canadian wholesale activity posted a "modest rebound" in March, growing by 0.6 per cent to $42.7 billion, but that was not enough to prevent a second straight quarterly fall in sales, Statistics Canada said Tuesday.

The March increase was a small turnaround from the 2.1 per cent decline seen in February.

During March, wholesale sales grew thanks to higher deliveries of building supplies, machinery and electronic equipment.

Building supply sales rose by 3.4 per cent in March, following a February that was hurt by winter weather conditions in Central Canada. The March growth in building supply sales accounted for around half of the overall rise in wholesale sales.

Alberta attempts to balance growth, conservation in new land-use policy

Alberta will be divided into six land-use regions as part of the government's plan to balance industrial growth and conservation.

The division into regions is one of six strategies in the new draft land-use framework announced Wednesday by Sustainable Resource Development Minister Ted Morton.

Key land-use strategiesCreate six new land-use regions with personalized plans.Create a cabinet committee and a regional advisory council to develop regional plans.Set region-specific environmental goals.Develop new policy tools for conservation on private and public lands.Create an information, monitoring and reporting system to support planning.Include Aboriginal Peoples in planning.

Carbon tax 'foolish and unnecessary': PM

Prime Minister Stephen Harper dismissed Liberal Leader Stéphane Dion's plan to tax carbon emissions as a "foolish and unnecessary policy" on Wednesday, saying it's nothing more than a cash grab for a government.

Harper was asked what role the government could play in cushioning the impact of high oil and gas prices on consumers.

He said that beyond providing some tax relief — something he said his party has done with GST and income tax cuts — the government can have little impact on lowering gas prices.

U.S. dollar bills discriminate against the blind, court rules

The United States might have to redesign its money after a Court of Appeals ruled Tuesday that the traditional green dollar bills discriminate against the blind and visually impaired.

The U.S. Court of Appeals for the District of Columbia Circuit upheld the 2006 lower-court ruling that using the same colour and shape on all bills makes it too difficult for people with poor vision to distinguish between values.

The latest ruling means U.S. Treasury Department may have to make bills different sizes, and include raised markings and oversized numbers on each bill. The department has not yet said if it will fight the court decision, or change its money.

BCE shares down on concerns over deal

BCE shares down on concerns over dealBCE 3-month TSX chart

Shares of BCE Inc. retreated Tuesday amid reports of a possible rift between the group buying the telecommunications giant and the bankers backing the deal.

Thursday, May 15, 2008

Old media meets new media: CBS buying CNET for $1.8B

Media and entertainment company CBS Corp. is buying online news and information provider CNET Networks Inc. for $1.8 billion US in cash, the two companies announced Thursday.

The proposed offer would expand the online reach of one of the U.S.'s most venerable media companies and also gives it ownership of CNET's host of desirable domain names, including,, and

CNET, an early pioneer on the internet, has a stable of news and information websites, including the CNET technology news website as well as video game website

Take 5 pennies off the gas pump, taxpayers federation urges Ottawa

Take 5 pennies off the gas pump, taxpayers federation urges OttawaThe national pump price average registered $1.28 per litre on Wednesday.(CBC)

Wednesday, May 14, 2008

Cameco earnings powered by higher prices for uranium, gold

Cameco earnings powered by higher prices for uranium, goldCameco 3-month TSX chart

Higher prices for uranium and gold sent earnings sharply higher at Cameco Corp. in the first quarter, the company reported Tuesday.

Unions take EI surplus fight to Supreme Court

Labour unions appeared before the Supreme Court of Canada on Tuesday to argue the federal government has been improperly spending billions of surplus dollars in the unemployment insurance fund.

The court reserved judgment Tuesday afternoon and didn't set a date for a ruling.

Brought by the Quebec-based labour union Confédération des syndicats nationaux (CSN), the unions' argument is that the Employment Act fund shouldn't go into general revenue and pay for things such as debt reduction. Doing so turns it into an indirect tax and is unconstitutional, they argue.

Tuesday, May 13, 2008

Credit crunch puts end to merger boom

Mergers and acquisitions were much rarer events in Canada during the first three months of this year as tighter credit conditions hit the takeover market, according to a firm that tracks such deals.

The number of M&A deals in the first quarter fell to a three-year low, said Crosbie & Co. Tuesday. There were 338 transactions worth $24.3 billion — well off the 523 deals valued at $61.5 billion in the first quarter a year ago.

It was the third consecutive drop in both the number and value of quarterly M&A announcements. "Lingering credit concerns and economic uncertainty in the U.S. and Canada continued to weigh on M&A activity in Canada," according to an analysis by Crosbie & Co.

Housing prices creep up 0.2 per cent in March: StatsCan

Housing prices creep up 0.2 per cent in March: StatsCanRising labour and materials costs coupled with strong demand drove up the price of new homes in Manitoba and Saskatchewan.(CBC)

Monday, May 12, 2008

Housing starts decline in April: CMHC

Urban starts fell 16.3 per cent in April compared with March, according to the CMHC.(Patti Edgar/CBC)

Housing starts in April dropped at a seasonally adjusted annual rate to 213,900 units from 243,000 a month earlier, owing to a decline in new construction on condos and apartments, the Canada Mortgage and Housing Corporation said Thursday.

"Housing starts in April moderated from the high levels posted in February and March," said CMHC chief economist Bob Dugan in a release.

TSX closes at record high

S&P/TSX composite index 3-month chart

The benchmark index of the Toronto Stock Exchange closed at an all-time high Monday, boosted by big gains in a couple of heavyweight stocks.

The S&P/TSX composite index was up 145 points to end the trading day at 14,666, shattering the previous high close of 14,625 reached on July 19 last year.

Two stocks in particular were driving Monday's gains. Research in Motion shares jumped $8.90 to $142.25 after it announced its new Bold smart phone. Oil and gas giant EnCana shares were up $5.68 to a close of $92.20 after it announced plans to split into two separate companies.

Sunday, May 11, 2008

Govt. confirms decision to block sale of MDA space division

The Canadian government delivered official word Friday of its decision to block the $1.3-billion sale of Vancouver-based MacDonald, Dettwiler and Associates' space-technology division to a U.S. space and weapons company.

Federal Industry Minister Jim Prentice made the announcement early Friday in a release, following what he called an "extensive and rigorous review process" of the proposed sale to Minnesota-based Alliant Techsystems Inc., also known as ATK.

Canada's trade surplus grew again in March

Canada's merchandise trade surplus grew in March for the third consecutive month as exports grew and imports declined, Statistics Canada said Friday.

The surplus jumped to $5.53 billion, its highest level since May 2007.

Canada's exports rose for the third consecutive month, increasing 1.6 per cent to $40.06 billion in March, mainly due to shipments of energy products. Imports fell by 0.3 per cent to $34.53 billion on widespread declines in all sectors except energy.

Saturday, May 10, 2008

Manulife CEO to step down in May 2009

Shares of Manulife Financial Corp. traded lower on Thursday after the insurance and investment firm reported lower first-quarter earnings and said its top executive will retire next year.

The company said company said it made $869 million, or 57 cents a share, down from $986 million, or 63 cents a share, in the same quarter of last year.

Manulife said sharp declines in global equity markets, particularly in the U.S. and Asia, reduced reported earnings in the first quarter of this year by $265 million or 18 cents per share.

Vick ordered to pay Royal Bank of Canada $2.4 million

Michael Vick, seen here at his sentencing, was ordered by a federal judge in Virginia to repay a $2.4 million loan to the Royal Bank of Canada.

A federal judge in Virginia has ordered imprisoned NFL quarterback Michael Vick to repay more than $2.4 million to a Canadian bank for defaulting on a loan.

The Royal Bank of Canada sued Vick in September, arguing his guilty plea to federal dogfighting charges and the resulting impact on his career prevented him from repaying the loan.

Friday, May 9, 2008

Are Canadian investors being too cautious?

S&P/TSX composite index 3-month chart

Canadian investors have rushed to the safety of cash as they try to ride out current market volatility — a strategy that could cost them billions in potential gains, an economist warns.

Canadians are sitting on a record $45 billion in excess safe, liquid assets that would normally be invested in the market, according to a report Wednesday by CIBC World Markets economist Benjamin Tal.

"If history is a guide, investors who are sitting on the sidelines to wait out the volatility will hang on to the cash too long and miss out on billions of dollars in lost investment opportunities," he said.

Tal's estimate of $45 billion in extra cash is based on his analysis of the amount that would have normally been invested in the markets given the risk level that was apparent just as the current financial crisis was starting.

Since then, all indicators show that Canadians' holdings of cash and cash equivalents have been rising rapidly, Tal notes.

Investors have been shovelling record amounts into low-risk money market mutual funds, with sales of $10.7 billion in the first three months of the year. Redemptions of higher-risk equity funds have reached $35 billion in the last six months.

Balances in chequing and savings accounts are up seven per cent year-over-year, while cash balances in brokerage accounts are up 15 per cent, Tal estimates.

Risk aversion rises with age

Older Canadians are leading the rush to cash. An Ipsos Reid-Canadian Financial Monitor survey suggests that the median cash balance held in chequing and savings accounts is now $7,650 for those 55 and over.

But current cash positions among the 25-to-49 set are still twice what they were in 2001. "Back then, some of the money that left the stock market was deployed in the real estate market," Tal said. "Today, this option is less attractive."

Market volatility has created a rush to cash before, and Canadians paid the price for sitting in cash for too long, Tal says.

After the 1987 market crash, overall cash positions held by Canadians grew 20 per cent. The market correction lasted two months, but investors sat on their "mountain of cash" for 16 months. In that time, the stock market gained 20 per cent.

Something similar happened following the 2001 correction, he says. "We estimate that by not adjusting their liquidity positions to pre-2001 levels, Canadians assumed more than $30 billion in lost investment opportunities."

Fast forward to 2008. Even though the Toronto stock market has risen 20 per cent from its January lows, Tal says Canadians are still sitting on 15 per cent more cash than they were in 2001. "By doing so, Canadians are sacrificing billions of dollars in potential investment gains."

Tal's employer, CIBC World Markets, sees the TSX rising further on the strength of higher energy prices and, eventually, a rebounding U.S. economy. Chief economist Jeff Rubin forecasts the S&P/TSX composite index will end 2009 at 16,200 — almost 1,800 points above its current level.

  • Tech firms team up to offer high-speed WiMax
  • Corporate takeovers pull foreign funds into Canada
  • Biovail shifts focus, closing Puerto Rican plants

    Biovail 3-month TSX chart

    Pharmaceutical company Biovail Corp. unveiled sweeping changes to its business on Thursday, including the closure of two offshore production facilities and a shift in its research focus.

    The Toronto company said it will concentrate on products targeted to central nervous system disorders.

    The company said it estimates the global market for treatments for central nervous systems disorders is worth about $70 billion US, and growth is expected in the low-to-mid double digits in niche markets, such as Parkinson's disease and multiple sclerosis.

    Thursday, May 8, 2008

    Alliant still awaiting word from government on MDA sale

    Industry Minister Jim Prentice rejected the sale of MDA to a U.S. firm in April.(Marketwire/Canadian Space Agency)

    The chief executive of Alliant Techsystems Inc. says the company has received "absolutely no indication of a change" in the Canadian government's decision to block the sale of the space assets of MacDonald Dettwiler and Associates Ltd. to the U.S. space and weapons company.

    During a conference call Thursday morning, Alliant CEO Dan Murphy said his company is still awaiting an official response from the government and expects one within a week.

    Air Canada loss grows on cargo probe charge

    Air Canada A 3-month TSX chart

    Air Canada, the country's biggest airline, reported a deeper first-quarter loss on Thursday, partly due to a $125-million charge to cover a cargo price-fixing investigation.

    The airline said it lost $288 million, or $2.88 a share, including the cost of the investigation, coupled with $89 million in foreign exchange losses. In the first quarter of 2007, Air Canada lost $34 million, including a foreign exchange gain of $33 million.

    Corporate takeovers pull foreign funds into Canada

    Corporate takeovers pull foreign funds into CanadaLast Updated: Tuesday, May 6, 2008 | 9:36 AM ET CBC News

    Corporate takeovers last year by foreign firms in Canada, especially in the resource sector, pushed foreign direct investment holdings here past the half-trillion dollar mark for the first time, Statistics Canada said Tuesday.

    "Foreign direct investment acquisitions activity surpassed that realized during the high-tech bubble of 2000," the federal government agency said, as 2007's total hit $500.9 billion.

    Tech firms team up to offer high-speed WiMax

    Tech firms team up to offer high-speed WiMax Last Updated: Wednesday, May 7, 2008 | 9:37 AM ET CBC News

    A who's-who of media and technology companies are joining forces to create a new venture that promises to deliver web access for cellphones and laptops at much faster rates than currently available.

    On Wednesday U.S. wireless provider Sprint Nextel Corp. announced its next-generation wireless broadband business was teaming up with wireless start-up Clearwire Corp. to create a new $14.55 billion US wireless communications company.