Charitable donations down 5.3% in 2008 November 16, 2009
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Canadians donated $8.19 billion to charities in 2008 ? a 5.3 per cent drop from the previous year ? as the recession led people to contribute a little less to good causes.
It was the lowest annual donation figure since 2005’s $7.9 billion.
The news isn’t all bad, however. Figures released by Statistics Canada on Monday show that the number of people whose tax returns reported charitable giving went up by 1.7 per cent in 2008 to almost 5.8 million.
Statistics Canada reported that 24 per cent of those who filed tax returns last year claimed charitable donations. That was the same percentage as in 2007.
Manitoba was the province with the highest rate of donors ? 27 per cent. Ontario, Saskatchewan and Prince Edward Island each had a 26 per cent donor rate. Nunavut’s was by far the lowest at 10 per cent.
The median donation ? half of donors gave more and half less ? was unchanged from 2007 at $250 nationally.
For the ninth year in a row, Nunavut had the highest median donation at $500. P.E.I. had the second-highest median at $370 and Alberta was third at $360. Quebec had the lowest median donation at $130.
Among urban areas, the highest median donation came from tax filers in Abbotsford-Mission, B.C. It’s the sixth year in a row that this area led the country. Kelowna, B.C. came in second at $380 and Calgary’s median donation of $360 was third.
The statistics do not take into account the millions of hours of volunteer work that Canadians give to charities.
Statistics Canada also pointed out that tax filers can combine their donations with those made by their spouses to maximize the tax break, so the actual number of people who gave to charity is higher than the number who claimed tax credits.
Charitable donations – 2008
Region Amount % change from 2007 Median donation % claiming a donation
Canada $8.19B -5.3% $250 24
N.L. $80.9M +2.7% $340 22
P.E.I. $29.3M +1.5% $370 26
N.S. $186.5M -2.3% $300 23
N.B. $141.5M -6.1% $290 22
Quebec $774.7M -4.9% $130 22
Ontario $3.71B -7.9% $300 26
Manitoba $355.5M -8.3% $330 27
Sask. $280.5M +1.7% $320 26
Alberta $1.38B -0.4% $360 25
B.C. $1.23B -5.6% $340 23
Yukon $5.4M -9.9% $240 21
N.W.T. $5.8M +4.1% $260 16
Nunavut $2.9M +15.4% $500 10
Source: Statistics Canada
Looming oil crunch played down: IEA whistleblower November 11, 2009
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A whistleblower at the International Energy Agency has accused the organization of deliberately underplaying the seriousness of a looming oil shortage.
The whistleblower, identified by the Guardian newspaper in the U.K. only as a senior IEA employee, told the paper the world is much closer to running out of oil than official estimates admit but that the agency has toned down its warning to avoid triggering panic buying.
A senior official with the International Energy Agency is accusing the group of downplaying a looming shortage of oil. (CBC)
The official claimed the agency is responding to U.S. pressure to downplay how fast existing oilfields are being depleted while overplaying the chances of finding new reserves.
Both the unnamed current employee and a former staff member quoted by the Guardian raise concerns about the ability of the world to increase oil output. The IEA predicted in its latest report that demand will increase to 105 million barrels a day by 2030 and that the world’s energy resources are “adequate to meet the projected demand increase through to 2030 and well beyond.”
The two dissenters question whether production can be raised from its current level of 83 million barrels a day. Even in the oil industry, there are those who say world production has already reached its peak.
One of them, Matt Simmons of Simmons & Co. International, told CBC News he agrees. Simmons is the author of Twilight in the Desert:The Coming Saudi Oil Shock and the World Economy, in which he argued that Middle East reserves have been overstated.
Simmons said it’s impossible for the world to meet expected demand, and once India and China return to normal growth rates they “will drain up every scrap of oil we’ll ever be able to produce.”
Predicts the end of globalization
He predicted the world will be forced into conservation measures including a reversal of globalization, and changes will include curtailing long-distance commuting, growing food near where it’s consumed, and carrying goods by truck only where ship or rail transport cannot reach.
Even that, he said, will reduce consumption by at most 25 per cent over the next 10 years, and this means the world will have to find a substitute for transportation fuel.
Simmons predicts it won’t be high prices that kill demand for oil but the industry’s heavy use of water, which will become so scarce worldwide that it will be priced like other commodities.
The Guardian report came as the IEA released its annual World Energy Outlook on Tuesday, warning that the worldwide financial crisis has led to a dangerous drop in energy investment, which could stifle any hope of economic recovery.
The agency is a policy adviser to 28 mostly industrialized, oil-consuming nations. It estimates investment in finding oil and gas has dropped by $90 billion US this year, down 19 per cent from 2008. As a result, the IEA said, future supplies of oil and electricity could be constrained and “undermine the sustainability of the economic recovery.”
Natural gas glut seen to 2015
The IEA’s prediction about natural gas, which represents two-thirds of the activity in Canada’s energy industry, also has potentially serious consequences. The agency expects new supplies of natural gas from previously untapped shale formations will create a glut that will extend until 2015.
However, Simmons dismisses the idea that shale gas will create a sustained glut as the “single biggest illusion in the industry in the last 40 years,” saying it overestimates by 20 to 25 years how long shale gas wells will be able to keep producing .
The IEA report came a month ahead of the UN Copenhagen conference, where world leaders will discuss measures to reduce carbon dioxide emissions. Among the agenda items is an initiative for developing countries to switch from fossil fuels to renewable energy such as wind and solar.
The IEA report said investment in renewable energy sources has been hard hit, falling by a fifth this year compared with 2008.
With files from The Associated Press (more…)
TSX inches down as RIM shares tumble September 25, 2009
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The Toronto stock market was slightly negative Friday morning, held up by commodity stocks but dragged down by a big slide in Research In Motion Ltd. shares after the BlackBerry maker disappointed investors with its results.
The S&P/TSX composite index lost 29 points to 11,256.2 in late morning, with RIM shares down $13.66 or 15 per cent to $76.50 after the company said that adjusted earnings came in at $1.03 a share, better than the $1 a share that analysts expected.
But revenue came in at $3.53 billion, well below the $3.62 billion that was expected.
RIM signed 3.8 million net new BlackBerry subscribers in the quarter, which was less than the four million analysts were looking for. Its third-quarter revenue and earnings both missed analyst expectations.
The Canadian dollar inched up 0.01 of a cent to 91.83 cents US.
The TSX has tumbled 300 points over the last two days amid worries about the sustainability of this year’s rally and news of an unexpected drop in sales of existing homes in August.
The energy sector was a bright spot, up 1.34 per cent as oil prices rose after demand concerns shaved almost $6 a barrel over the last two sessions. The November crude contract on the new York Mercantile Exchange was up $1.08, to $66.24 US a barrel.
The base metals sector was ahead 1.76 per cent as December copper added one cent at $2.72 US a pound.
The TSX Venture Exchange was off 0.46 of a point to 1,255.9.
“Commodities have been leading this decline on concerns that the global economic rebound has not been as quick as had been hoped,” said Colin Cieszynski, market analyst at CMC Markets Canada.
New York markets were mainly positive. The Dow Jones industrials index was 19.8 points higher to 9,727.2. The Nasdaq composite index was weighed down by RIM’s earnings report, falling 2.11 points to 2,105.5 while the S&P 500 index rose 2.3 points to 1,053.1.
Traders are watching a meeting of leaders from the world’s 20 largest economies in Pittsburgh for indications of how those governments plan to bring about a strong, sustainable recovery.
With files from The Canadian Press (more…)
Canadian car sales down in June August 16, 2009
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New vehicle sales slipped 0.6 per cent in June, new data from Statistics Canada shows.
Canada’s statistics agency says that 119,961 cars were sold during the month, down slightly from May.
Much of the drop was attributed to sales of passenger vehicles.
After a sharp decline at the end of 2008, car sales have been on a slow upward trajectory throughout this year, but they’re still well below their recent historic highs.
An average, 119,000 cars have been sold per month this year, compared to about 148,000 in the same period in 2008. The best-ever month for Canadian vehicle sales was May 2007, when 185,471 cars were moved off dealer lots.
Passenger car sales were down one per cent to 59,038. Sales of trucks, which include minivans and SUVs, fared slightly better, down 0.2 per cent to 60,923 units.
Regionally, five provinces saw sales declines. They were down 2.3 per cent in Ontario, and 2.9 per cent in Newfoundland and Labrador. The 6.7 per cent sales drop in New Brunswick was the largest decline in Canada.
Nova Scotia sales inched 0.4 per cent higher, while Quebec sales were up by 1.4 per cent. The province with the greatest sales gain was Alberta, with 3.1 per cent more vehicles sold.
Preliminary data shows vehicle sales were up about 5 per cent in July, but official numbers will not be tabulated until next month.
Canada’s productivity down in 2008 May 14, 2009
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Canada’s productivity slipped in 2008, according to figures released Wednesday, a sign that the country’s economic recovery might be slower than hoped.
Statistics Canada said annual output per Canadian worker fell by 0.5 per cent, a figure that indicated the employed produced fewer goods and services in the year.
Ottawa’s statistical agency said Canada’s gross domestic economy — essentially the country’s national income — stagnated in 2008 without a corresponding drop in work effort.
“This occurred as the growth in real gross domestic product (GDP) decelerated significantly. At the same time, hours worked continued to rise, albeit at about half the pace as in the previous two years,” Statistics Canada said.
After subtracting inflation, Canada’s GDP stood at approximately $1.325 trillion for 2008, up 0.46 per cent compared to 2007.
The hours worked by Canadian men and women to produce this GDP, however, rose by one full percentage point.
Productivity growth
Year Canada U.S.
2008 -0.5% 2.8
‘07 0.7 0.7
‘06 1.0 1.8
‘05 2.2 2.7
Source: Statistics Canada, U.S. Commerce Department
In 2008, employers cut the time spent on the job by each employee. But more people had jobs in 2008 compared with 2007.
Thus, the annual output per worker dropped in 2008, a variable that economists usually want to rise.
The United States faces a similar situation in the final three months of 2008. In those months, U.S. output crashed by 10.5 per cent while American workers toiled 6.9 per cent fewer hours in the October-to-December period.
Thus, U.S. productivity fell by 3.9 per cent in the quarter.
Countries with high productivity tend to grow faster than economies with slower output per worker, economists say. Thus, falling productivity would indicate an economy becoming less competitive versus another country with rising GDP output per employee.
Canada slowing, U.S. recovering
Canada’s productivity has slipped for the past few years as the pace of economic growth slackened.
In 2005, Canadian output per worker rose by a hefty 2.2 per cent. By 2007, the pace of productivity increase had slowed to 0.7 per cent.
By contrast, American worker productiveness recovered in 2008, up 2.8 per cent for the entire year. That was an improvement compared with 0.7 per cent one year earlier.
Fewer machines, lower productivity
Canada’s productivity challenge centres around industry’s inability or unwillingness to invest in output-enhancing machinery, said Andrew Jackson, chief economist with the Canadian Labour Congress.
Historically, companies in Canada have not spent as much money on new equipment and worker training as firms in other countries, he said.
“For years, we have had very low rates of investment in plant and equipment,” Jackson said.
Conquest Vacations shuts down tour operations April 17, 2009
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A tourist enjoys the sun at a resort in Bavaro, Dominican Republic. Conquest Vacations, which set up tours to Canada, the United States, the Caribbean, Mexico and Europe, is shutting down after 37 years.(Eduardo Munoz/Reuters)
Conquest Vacations said Wednesday it is shutting down its tour operations effective immediately.
What you can do if your tour operator goes out of business:Customers who booked their vacation using a credit card should contact their credit card company for a refund for services not rendered.Travellers who opted for travel insurance should check if the coverage includes “operator default,” which provides reimbursement should a tour operator or air carrier go out of business.The Canadian Transportation Agency accepts complaints from consumers dissatisfied with the air portion of a travel package. Complaints about the land portion of the trip must be dealt with by provincial and territorial authorities dealing with travel.
In a statement published on its website, the Toronto-based company blamed several factors for the decision.
“Unfortunately, this has been a result of overcapacity and price [wars] among the major tour operators, unrealistic and unreasonable demands by the credit card processing companies, credit squeeze and economic turmoil in recent months making it impossible for companies like Conquest to continue in business even after weathering many storms over the past 37 years,” the company said.
Customers who booked and paid using cash or a cheque through a travel agency are being directed to contact their agency about refunds or claims.
The company said travellers who booked directly with Conquest Vacations will be contacted. They can also email the company with a booking reference number.
Customers who paid for their future travel using a credit card should contact their credit card institution for a refund.
In business since 1972, Conquest served destinations in Canada, the United States, the Caribbean, Mexico and Europe.
David McCaig, the president of the Association of Canadian Agencies, called it “a very sad day for a very reputable company.”
McCaig pointed out that Conquest’s closing is a different situation from some past bankruptcies in the travel business, which left travellers stranded.
“A closing means that they are able to protect all their customers in destination, and they’ll be able to bring their customers home, and that’s a very important thing to compare to other bankruptcies of tour operators that have happened in the past.”
Randolph de Gooyer of Maritime Travel of Halifax said at least one couple from Sydney, N.S., is stranded by the move.
“This is early hours yet, but our understanding is that Conquest has made arrangements to bring those people back to Canada, and we’re trying to confirm that. If that’s not the case, then we’ll make alternate arrangements for them,” he said.
Few vacationers from Nova Scotia are affected, since Conquest pulled out of Halifax a few years ago.
Lesley Keyter of Calgary’s The Travel Lady Agency said it was inevitable that one of Canada’s discount agencies would close. She said the prices of seats that some vacation companies have been offering created an unrealistic market for travellers and companies to sustain.
She said the industry will come out “because you have the strong players that emerge from this unscathed because they’ve got the depth and the customer loyalty.”
Housing starts down, and will keep falling: CMHC February 22, 2009
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Fewer basements dug, less concrete poured, and far fewer bricks were laid in Canada in 2008 than in 2007.
Canada Mortgage and Housing Corp. says housing starts fell 7.5 per cent to about 211,056 units in 2008. And that?s just the beginning. The agency forecasts sharply lower levels of starts for the next two years, along with sliding home sales.
2008 (Actual) 2009 (Forecast) 2010 (Forecast)
Nfld. and Lab. 3,261 2,675 2,775
PEI 712 575 625
Nova Scotia
3,982 3,675 3,900
New Brunswick 4,274 3,475 3,650
Quebec 47,901 40,700 40,500
Ontario 75,076 58,255 59,700
Manitoba 5,537 4,748 5,000
Sask. 6,828 4,141 4,500
Alberta 29,164 19,200 22,000
B.C. 34,321 22,800 20,700
Source: CMHC
CMHC says housing starts are expected to be about 160,250 for 2009 and about 163,350 for 2010, before things pick up again.
CMHC also says existing home sales, as measured by the Multiple Listing Service, are expected to decline 14.6 per cent during 2009 to 370,500 units. It expects a 9.3 per cent increase in 2010 to 405,000 units.
Along with the decline in building, expect declines in price.
CMHC sees the average MLS price to be $287,900 for 2009, a decline of 5.2 per cent, while 2010 will see little change from 2009 average prices.
“Housing market activity will begin to strengthen as the Canadian economy rebounds in 2010 and the level of housing starts over the forecast period will be more in line with demographic fundamentals,” said Bob Dugan, chief economist for CMHC.
Another candidate for commerce secretary turns Obama down February 16, 2009
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Another potential U.S. commerce secretary has withdrawn his nomination.
Republican Senator Judd Gregg of New Hampshire said “irresolvable conflicts” with President Barack Obama’s handling of the economic stimulus have taken him out of the running for the position.
“We are functioning from a different set of views on many critical items of policy,” Gregg said in a statement released by his Senate office.
Gregg, however, thanked Obama for the nomination, and said, “I especially admire his willingness to reach across the aisle.”
He said his withdrawal had nothing to do with the vetting of his past that Cabinet officials routinely undergo.
Gregg was Obama’s second choice to fill the commerce portfolio after New Mexico Governor Bill Richardson withdrew several weeks ago in the wake of a grand jury investigation into alleged wrongdoing involving state contracts. He has not been implicated personally.
It?s the latest setback for Obama in his attempt to build a Cabinet.
Treasury Secretary Tim Geithner was confirmed despite revelations that he had not paid some of his taxes on time, and former Senate Majority Leader Tom Daschle withdrew as nominee as health and human services secretary in another income-tax controversy.
Conservatives in both houses have been relentless critics of Obama?s stimulus plan, arguing it is filled with wasteful spending and won’t create enough jobs. Gregg has refrained from voting on the bill ? and on all other matters ? while his nomination was pending.
Market slump sends CPP assets down $8.5B in Q3 February 15, 2009
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The Canada Pension Plan fund saw its assets fall by $8.5 billion in the last three months of 2008 as falling stock markets hit it.
The CPP fund said Friday that it had $108.9 billion in assets as of the end of its third quarter on Dec. 31, 2008, down from $117.4 billion at the end of the second quarter.
“Sharp declines in global equity markets, especially in October and November, negatively impacted our results for the quarter,” said David Denison, the president and CEO of the CPP Investment Board.
“The funding structure of the CPP means that it is able to weather an extended market downturn and the assets we are managing today are not required to help pay pensions for another 11 years,” Denison said.
Falling market accounted for $7.9 billion of the fund’s asset decline, while the remainder of the drop was due to about $600 million in outflows to be used for benefit payments.
The stock market carnage contributed to an investment rate of return of -6.7 per cent during the third quarter, the pension plan said.
Despite the weak markets and the pension plan’s negative returns for the third quarter, Denison said the short-term problems also bring long-term investment opportunities.
“Since we are not forced to sell assets in these market conditions to pay current benefits, we instead are well-positioned to acquire assets at attractive prices,” Denison said.
Supreme Court strikes down interest tax scheme January 9, 2009
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A Supreme Court of Canada decision released Thursday could have wide implications regarding how you can reduce your taxes.
On the one hand, the decision by Canada’s top court guarantees that Canadians can use interest deductions in certain circumstances. But the so-called Lipson decision also could make it easier for bureaucrats to unwind your already-established tax plans, experts noted.
“It is a good news-bad news decision,” said Evy Moskowitz, a lawyer with KPMG.
Not a business loan
By a 4-3 count, the Supreme Court said a Toronto couple could not subtract mortgage interest from their tax bill by shifting the borrowed cash through a family company.
Under Canadian law, homeowners are not allowed to use such payments to chop income taxes.
But small business owners, among others, can use borrowed cash to set up a company or for some other income-earning purpose and use the ensuing interest costs to knock down what they pay to Ottawa.
In 1994, Earl and Jordanna Lipson tried to turn a mortgage into a business loan and snag $100,000 worth of deductions. The Canada Revenue Agency said “no” to this move, starting 14 years of legal wrangling.
This month, the Supreme Court agreed with a lower court decision in favour of Canada’s tax collector.
The effect of this complex case was to confirm that taxpayers can deduct the interest from borrowings against their income but also could increase the ability for Ottawa to apply an existing legal tool to halt shifty tax-avoidance schemes, experts said.
“Things are still equally uncertain (regarding tax planning),” said Daniel Sandler, who teaches tax law at the University of Western Ontario in London, Ontario.
The GAAR effect
The Supreme Court’s decision was one of the few times Canada’s top court has opined upon a provision in the tax code known as the General Anti-Avoidance Rule, or GAAR.
Passed in the late ’80s, GAAR was designed to give government the ability to chase after recalcitrant Canadians who might have set up their affairs in a technically proper way but are actually only trying to avoid paying taxes.
While well-intentioned, the Mulroney-era provision caused all sorts of head-scratching among Canada’s legal eagles.
Very few GAAR cases, however, have gone to the Supreme Court, thus making the rules concerning what is and what is not acceptable very murky, lawyers said.
This ruling won?t affect Canadians who borrow against the value of their home to buy investments, making their mortgage interest in effect tax-deductible, some experts noted.
