China maintains world lead in auto sales February 9, 2010
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China is currently the world’s biggest auto market. Sales exceeded 1.3 million in November.(Associated Press)
Chinese consumers bought 1.32 million cars in January, solidifying the country’s status as the world’s largest auto market.
Spurred by tax cuts and other government stimulus measures, the January figure was 18 per cent more than December’s 1.1 million vehicles sold. It was also up 116 per cent from the same month of 2009, when China first overtook the U.S. in vehicle sales.
Total vehicle sales, including larger vehicles, more than doubled from 735,000 last year to 1.66 million units, the China Association of Automobile Manufacturers said.
U.S. auto sales rose a modest six per cent in January, but that was up from a 26-year low of 656,976 a year before.
For the year as a whole, total Chinese vehicle sales were up 45 per cent to an estimated 13.6 million in 2009, overtaking the American market as sales there languished. The auto group expects 15 million passenger vehicle sales this year.
Trade-ins encouraged
Beijing ignited sales last year with a series of policies aimed at encouraging car owners to trade in older vehicles, in many case three-wheel trucks, for more fuel-efficient small cars.
The huge year-on-year jump in January sales also reflected relatively weak sales and production a year earlier, when China’s economy had slowed because of the global financial crisis.
January sales may have been buoyed by a rush to buy cars ahead of the Feb. 14 Lunar New Year, the country’s biggest holiday, so analysts say sales could fall off now that the holiday is past.
“We need to keep an eye on the data for February and March,” said Wei Chenggang, an analyst at Shanghai Securities in Shanghai. “Given expectations that inflation may rise, people may spend less.”
“January does not tell us what the whole year will be like, since the broader economy faces various uncertainties,” the association said in a statement.
With files from The Associated Press (more…)
AbitibiBowater subsidiary cuts 163 jobs February 9, 2010
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Montreal-based AbitibiBowater’s subsidiary in the United Kingdom announced Tuesday it is laying off 163 more workers in Liverpool.
The subsidiary ? Bridgewater Paper Company ? said it was stopping production at the mill while it searches for a buyer.
AbitibiBowater’s U.K. subsidiary announced 163 more layoffs Tuesday.(CBC)
The company laid off 108 employees last week after it filed for administration, a form of bankruptcy protection from creditors.
The parent company ? the eighth-largest publicly traded pulp and paper manufacturer in the world ? filed for bankruptcy protection in the U.S. and Canada last April.
The forest products industry has been hit by a strong Canadian dollar, the shifting of production to low wage-cost countries and falling demand for newsprint as newspapers lose readership to the internet.
With files from The Canadian Press (more…)
Agrium reports sharp drop in profits February 9, 2010
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Calgary-based Agrium Inc. reported a substantial drop in fourth-quarter profit and revenue Tuesday.
But the fertilizer producer also said it sees signs of improved market conditions.
Agrium says it’s seeing improved demand for potash in North America.(CBC)
“The fourth quarter of 2009 saw the initial stages of recovery in the crop input sector,” CEO Mike Wilson said.
“We have seen increasing demand for domestic potash and a tight supply situation for nitrogen and phosphate products.”
The company, which reports profits in U.S. dollars, had net earnings for the three months of $30 million, or 19 cents per share. That was down from $124 million or 79 cents per share in the same period a year earlier, when demand for fertilizer producers was still high.
Agrium produces fertilizer ingredients for sale around the world. It also sells agricultural products through retail locations in Canada and the United States.
The company’s net sales fell to $1.44 billion US in the fourth quarter of 2009, down from $1.94 billion in the comparable period of 2008.
Agrium was one of three major Canadian potash producers to announce a deal Monday to sell 350,000 tonnes of the fertilizer ingredient to a Chinese buyer. They did not disclose a price, but Wilson said Monday it was “a good deal for us.”
The fertilizer giant also repeated Tuesday that it’s still interested in acquiring CF Industries Holdings Inc. in a $5.2 billion US bid hostile bid. The offer stands until Feb. 22.
With files from The Canadian Press (more…)
Alberta challenges move to one securities regulator February 8, 2010
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The Alberta government filed a legal challenge Friday to Ottawa’s plan to create a single securities regulator.
Alberta is asking the province’s court of appeal to consider questions on the “constitutional soundness” of the federal move.
“We very strongly believe that this is an intrusion by the federal government into an area that has historically been under provincial jurisdiction,” Alberta Finance Minister Ted Morton said in a news release.
“This comes down to defending Alberta?s jurisdiction and the rights of Albertans to regulate their own provincial affairs, as well as defending a provincial regulatory system that works well now and better serves the interests of Alberta companies and investors.”
The Alberta Court of Appeal with meet with the provincial and federal governments to set up timelines and procedures for the court challenge.
Alberta is also intervening in a similar challenge the Quebec government has made in that province’s court of appeal.
Last year, the federal government announced it will ask the Supreme Court of Canada to rule on whether it has the power to set up a single regulator.
Home sales forecast to rise 13.3% February 8, 2010
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The Canadian Real Estate Association is predicting home sales will rise 13.3 per cent this year compared to 2009, the CREA said in a release Monday.
The industry association predicted sales of 527,300, which would be a new annual record, up 1.2 per cent from the previous record year of 2007.
The Canadian Real Estate Association predicts existing home prices will average $337,500 nationally in 2010. (Geoff Howe/Canadian Press)
CREA expects low interest rates will boost sales in all provinces, led by Ontario and British Columbia, but that the growth in sales would slow over the second half as pent-up demand is met, interest rates rise, and the harmonized sales tax takes effect in Ontario and B.C.
For 2011, the association predicts higher interest rates will slow activity, leading to a decline in sales of 7.1 per cent, to 490,100 homes.
The CREA forecast the average price nationally would climb by 5.4 per cent this year, to a record $337,500, with gains in all provinces, but ease 1.5 per cent in 2011.
CREA chief economist Gregory Klump predicted interest rates will rise slowly this year and next, citing “fiscal restraint, a strong Canadian dollar and a subdued inflation outlook.”
Average home price forecast
2009 2009 change 2010 forecast 2010 change 2011 forecast 2011 change
Canada 320,333 5.0% 337,500 5.4% 332,400 -1.5%
British Columbia 465,725 2.4% 485,500 4.2% 476,600 -1.8%
Alberta 341,201 -3.3% 357,300 4.7% 361,700 1.2%
Saskatchewan 233,695 4.1% 242,500 3.8% 248,500 2.5%
Manitoba 201,343 5.8% 210,300 4.4% 215,300 2.4%
Ontario 318,366 5.3% 332,700 4.5% 326,000 -2.0%
Québec 225,412 4.7% 240,500 6.7% 249,100 3.6%
New Brunswick 154,906 6.3% 159,400 2.9% 164,200 3.0%
Nova Scotia 196,690 3.6% 200,900 2.1% 204,700 1.9%
Prince Edward Island 146,044 4.4% 149,900 2.6% 153,200 2.2%
Newfoundland 206,374 15.6% 222,300 7.7% 238,900 7.5%
Source: Canadian Real Estate Association
‘Buy American’ deal exempts Canadian firms February 8, 2010
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A United States flag blows in the wind while transport trucks line up across the Ambassador Bridge between Windsor, Ont., and Detroit. (Jason Kryk/Canadian Press)
Canadian companies will be exempt from a protectionist “Buy American” clause in the U.S. government’s $787-billion US economic stimulus package, the federal government announced Friday.
The deal involves 37 U.S. states that adhere to the World Trade Organization’s government procurement agreement, effectively ending a dispute that has raged since Congress passed the protectionist measures in 2009.
“Our government had serious concerns about the ‘Buy American’ provisions contained in the American Recovery and Reinvestment Act,” International Trade Minister Peter Van Loan told reporters in Ottawa.
“We believe that a co-ordinated approach to job creation and economic recovery was essential for both countries,” said Van Loan.
Speaking shortly after details of the deal were announced, Liberal trade critic Scott Brison slammed it as “too little, too late” as much of the stimulus funds made available by the Obama administration have already been spent.
The U.S. stimulus money is allocated for roads, public housing and other infrastructure projects, the drawback being that most of the funding has already been spent. The program’s deadline for handing out funding is Feb. 17.
“This deal is a pathetic attempt to try to create some level of symbolic victory when, in fact, a real deal was required to defend Canadian interests,” Brison told reporters in Ottawa. “There is absolutely no reason the government couldn’t have concluded this deal last March.”
Access to sub-federal projects
The deal provides companies in both countries with permanent market access to projects at the sub-federal level, meaning they can bid and work on public works projects at the provincial, state or municipal level.
Foreign Affairs Minister Lawrence Cannon (left) gestures as International Trade Minister Peter Van Loan looks on during an update on Canadian-American trade relations in Ottawa on Friday.(Pawel Dwulit/Canadian Press)
The agreement applies only to U.S. funding delivered under the current stimulus program, not future legislation that might include similar “Buy American” provisions.
International Trade Minister Peter Van Loan did not say how much the deal would be worth to Canadian companies, calling any estimate “highly speculative.”
“We could only guess at how much value Canadians would have gotten out of [the stimulus] contracts,” said Van Loan. In the future, the deal will bring “significant opportunities” for Canadians, he said.
‘It sure is a sweet victory.’?Victor Fedeli, mayor of North Bay, Ont.
The “Buy American” provision gives priority to U.S. iron, steel and other manufactured goods for use in state-level and municipal public works and building projects funded with stimulus tax revenue.
In October, reports of progress between the U.S and Canada over the controversial provision prompted the Federation of Canadian Municipalities to withdraw a resolution to block U.S. companies from bidding on city contracts in this country.
‘It’s going to be good’: mayor
The deal was made with the support of the provinces, territories and industrial associations, said Van Loan.
But it also has the support of some municipal leaders.
“It sure is a sweet victory,” said Victor Fedeli, the mayor of North Bay, Ont.
“We have companies that make everything from sandbags and tarps to municipal engineering to huge bridges that you find all over the United States,” said Fedeli. “And these companies now have their door open again.”
Asked whether he worried the deal could also mean large American companies winning contracts in North Bay that might otherwise have gone to his own constituents, Fedeli said the city was “already a community with open doors.”
“We bought two fire trucks in South Dakota for $850,000,” he said. “They had to compete against the Canadian firms, and while we certainly want to buy Canadian, that is not the best value for taxpayers.
“The Canadian companies needed to sharpen their pencil, and if a company can make a water reservoir in Illinois and ship it to North Bay and install it for $1 million, I would hope someone in Ontario would have a sharper pencil,” he said.
“I think it’s going to be good.”
With files from The Canadian Press (more…)
Toyota Canada to resume shipping recalled models February 7, 2010
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Toyota Canada announced Friday that it has resumed deliveries to dealers of the eight models the automaker recalled on Jan. 21.
It also said that as of Friday, it will begin notifying owners of vehicles recalled because of sticky accelerator pedals and have them contact their dealers to have the repair done. The company said all new cars will be shipped with modified pedals.
Toyota Canada has resumed deliveries to dealers of the eight models it recalled on Jan. 21.(Associated Press)
The vehicles include some 2009-2010 RAV4 models, the 2009-2010 Corolla, the 2009-2010 Matrix, the 2005-2010 Avalon, the 2007-2010 Camry, the 2010 Highlander, the 2007-2010 Tundra and the 2008-2010 Sequoia.
The automaker did not announce how it plans to deal with the new complaints about brake failures on its hybrid vehicles.
There were concerns, too, that Toyota may not be the only company with the problem. Ford uses brakes made by the same supplier and has recalled two of its new hybrid models. And analysts said the problem may affect other carmakers as well.
Tony Faria, a professor at the Odette School of Business at the University of Windsor, said it’s common for various carmakers to use many of the same components.
“While that certainly is efficient in terms of efficiency and economies of scale,” he said, “one issue that does arise is if there’s an issue with a supply source. It’s a problem that may extend across a number of auto assemblers and a whole bunch of vehicles.”
The announcement on the accelerator pedals came the same day as Toyota Motor Corporation’s president apologized for the recall crisis that has engulfed the Japanese automaker and promised a new emphasis on quality control.
Toyota president Akio Toyoda reacts during a news conference at a Toyota office in Nagoya, Japan, on Friday.(Itsuo Inouye/Associated Press)
Akio Toyoda spoke at a hastily arranged late evening news conference in Nagoya, Japan.
Toyoda said he would personally head a special committee that would examine Toyota’s internal quality control and consult with outside experts on what to do with the automaker’s growing list of problems.
“We are facing a crisis,” he acknowledged.
It was the first public appearance by Toyoda, grandson of the company’s founder, since the automaker ordered a huge recall of 4.5 million vehicles last month ? 270,000 in Canada ? over a problem with sticking gas pedals.
“I offer my apologies for the worries,” he said in Japanese. “Many customers are wondering whether their cars are OK.”
Toyota said Thursday the U.S. recall could cost $2 billion US ? $1.1 billion in direct costs and $770 million to $800 million in lost sales.
Toyota says it is still deciding whether to recall 2010 Prius vehicles over complaints of braking problems. (Charles Rex Arbogast/Associated Press)No Prius recall yet
Toyoda said the company has not decided how to address concerns with brakes on the 2010 Toyota Prius, but said a decision would be announced soon.
Prius drivers in Japan and the U.S. have complained of a short delay before the brakes kick in ? a flaw Toyota says can be fixed with a software programming change. The lag has been reported to occur as the car hits slick surfaces and road bumps.
The automaker said it fixed the programming glitch in Prius models that went on sale since last month, but has done nothing on 270,000 Prius cars sold last year in Japan and the U.S.
?Whatever action is warranted in response to the Prius brake concerns, we?ll take that action as well,? Stephen Beatty, managing director of Toyota Canada said.
There have been almost 200 complaints ? including five in Canada ? about braking problems on the new hybrid while travelling on uneven road surfaces.
With files from The Associated Press (more…)
Carney sees tough recovery ahead February 7, 2010
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The global economy is recovering from the recession but will be dramatically changed for the worse, and Canadian companies and workers need to prepare for that, says Bank of Canada governor Mark Carney.
In an address Thursday to the Winnipeg Chamber of Commerce, Carney said he’s not sure corporations and the labour force are prepared for the changes.
Bank of Canada governor Mark Carney predicts jobs lost during the economic downturn will never return.(Canadian Press)
Carney said Canadian companies have fallen behind on their investment in new technology, while Americans have seen a surge in productivity during the recession and are emerging more competitive than ever.
He also predicted that many of the jobs lost in the downturn will never return and that Canada might be heading for a period in which unemployment rates are generally higher than they were in the past.
“Could Canada experience a jobless recovery?” he asked. “Conflicting forces are at play.”
“A powerful and sustained restructuring of the global economy has begun,” he emphasized. “Canadian business will need to develop new markets as the traditional advantage of relatively open access to U.S. markets becomes less valuable.”
Carney also said the Bank of Canada is predicting growth this year of 2.9 per cent and 3.5 per cent in 2011.
With files from The Canadian Press (more…)
TSX see-saws on European debt worries February 7, 2010
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Worries about Europe’s debt crisis sent the Toronto Stock Exchange lower for much of trading Friday, before it recovered later in the day.
Traders also sold stocks amid new U.S. unemployment data showing the American economy shed 20,000 jobs in January.
A man tries to clean a shop window in central Athens near a wall where a slogan reading ‘Revolution Now’ in Greek was spray-painted. (Petros Giannakouris/Associated Press)
The benchmark index of the Toronto stock market, the S&P/TSX composite index, closed up 94.36 points to 11,223.12 after plunging 262 points Thursday. In New York, markets see-sawed between gains and losses.
The Dow Jones industrials ended higher by 10.05 at 10,012.23 after losing 268 points Thursday. The Nasdaq composite index gained 15.69 to 2,141.12 while the S&P 500 index edged up 3.07 points to 1,066.18.
Investors were also watching the debt crisis in Greece amid fears Portugal, Spain and Ireland, with weak public finances, may also be unable to deliver on promises to cut their deficits.
Greek customs and tax officials have already begun a 48-hour strike in protest at planned austerity measures. The debt crisis has prompted a rush to the perceived safety of the U.S. dollar, which in turn pressured commodity prices.
The Canadian dollar ended up 0.24 of a cent to 93.46 cents US. Oil prices slipped a bit more after falling almost $4 US on Thursday.
The March crude contract on the New York Mercantile Exchange finished the day down another $1.95 US a barrel to $71.19 US. Crude plunged along $4 US a barrel on Thursday.
The April bullion contract on the Nymex closed down $10.20 to $1,052.20 US an ounce, following a near $50 US drop on Thursday.
With files from The Canadian Press (more…)
RBC knew of Jones account oddity, memo shows February 6, 2010
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Financial adviser Earl Jones, right, pleaded guilty last month to two counts of fraud totalling roughly $50 million.(Graham Hughes/Canadian Press)
The Royal Bank of Canada knew disgraced Montreal financial adviser Earl Jones was using his personal account for business and passing it off as an in-trust account, The Fifth Estate has learned.
But the bank denies there were any indications that Jones was using his account inappropriately.
According to a confidential internal memo obtained by The Fifth Estate, Jones was warned “he could get himself in trouble because this is just a personal account in his name alone, the in trust does not mean anything ?”
The memo was dated Nov. 7, 2001. But the matter was dropped and Canada’s largest bank allowed Jones to keep doing business as usual.
Jones had a personal account with the Royal Bank but told his clients it was an “in-trust” account. The only problem the bank had was that Jones was operating his business through the account, and it asked him to open a commercial account in 2008.
Fifth Estate
Watch The Fifth Estate report on Earl Jones on Friday at 9 p.m. on CBC Television.
The episode will be repeated at various times on CBC News Network.
Wayne Bossert, executive vice-president of RBC, said Earl Jones did what many entrepreneurs do ? start small, using personal accounts to operate their business.
Asked whether it was wrong for the bank to let his clients believe Jones was putting their money into a trust account, Bossert said: “Jones illegally used our letterhead, our logo, in other ways of applying legitimacy to his fraud.”
“We had no knowledge of that. What we understood of Mr. Jones is he was an administrator of trusts and estates. A very legitimate business and a legitimate business for him to be in.”
Bossert denied that any alarm bells went off before 2008.
“We saw no signals that there was any abuse, any suspicious transactions through the account. There was nothing to signal that this person was anything other than a legitimate successful businessman.”
Last month, Jones pleaded guilty to two counts of fraud totalling roughly $50 million. The charges covered his 27-year career as a financial adviser on Montreal’s West Island. Authorities have confirmed that Jones bilked 158 clients out of $50.3 million.
Neil Stein, a lawyer representing most of the victims, said Jones would commingle everything into one bank account, called “Earl Jones in trust” that he would use “as his own piggy bank.”
“When you’re opening up an account in trust for somebody, it’s clear, or it should be clear to the bank and everybody, that that account is not being opened for your personal benefit, but rather for and on behalf of some other person or entity.”
Stein said he wants to know why the Royal Bank never questioned how Jones was using his account.
“More than red flags should have gone off, from what I’ve seen,” he said.
“There are obvious instances when you see cash being withdrawn from a trust account, when you see credit card bills being paid from a trust account, when you see a debit card being issued on a trust account. That shouldn’t happen. “
