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Sunday, August 26, 2012

Unused money held by corporations should be used to boost economy: Bank of Canada governor

   Canada column for Sunday, Aug. 26/12


   (c) By Jim Fox

   There’s too much “dead money” in Canada that should be working to improve the economy, the head of the country’s central bank says.
   Company owners are sitting on piles of cash that could be spent on expanding businesses or at least be given back to shareholders, said Bank of Canada governor Mark Carney.
   Speaking at a Canadian Auto Workers meeting, Carney said the level of caution by business owners “could be viewed as excessive.”
   A study said Canadian businesses have set aside $526 billion in unused cash assets.
   Business investment and consumer spending provide the “chief support” for the continuing economic recovery, he said.
   Ongoing international concerns have led to a “less robust” business investment than what was previously expected, causing some of the caution.
   Auto workers’ president Ken Lewenza called for some of that unused money to be reinvested into technology, the workplace, productivity and training.


   Canada’s newest national park is in a vast tract of mountainous Northwest Territories terrain near Norman Wells.
   Prime Minister Stephen Harper said the decision to set aside the 1,660 square miles strikes a balance between protecting the environment and expanding Canada’s economy.
   Described as a pristine area of lakes and rainbow-hued mountains, the country’s 44th national park is surrounded by land rich in minerals that are prime for development.
   To be known as the Naats'ihch'oh National Park Reserve, it is on aboriginal land inhabited by the Sahtu Dene and Metis of the Tulita District.
   Its boundaries protect 70 percent of the upper portion of the South Nahanni River and reaches Yukon's border adjacent to the Nahanni National Park Reserve.


   News in brief:
   - Polls indicate the Liberals are poised to be returned to office in Quebec’s provincial election on Sept. 4. A Forum Research poll gives Premier Jean Charest’s Liberals 35 percent support compared with 29 percent for the Parti Quebecois and 24 percent for the Coalition Avenir Quebec. The sudden turnaround in support for the Liberals followed a televised leaders’ debate last weekend.
   - Events were held across Canada on Wednesday to remember former New Democratic Party leader Jack Layton who died a year ago. His death at age 61 from cancer came only three months after the socialist party made an electoral breakthrough by becoming Canada’s official Opposition party. The charismatic Layton “would’ve loved this,” his widow Olivia Chow, a Member of Parliament, told crowds at the largest event held outside Toronto’s city hall.


   Facts and figures:
   The Canadian dollar continues above party with the U.S. currency at $1.0082 in U.S. funds. The U.S. dollar returns 99.18 cents Canadian.
   The Bank of Canada’s key interest rate is unchanged at 1 percent while the prime-lending rate is 3 percent.
   Stock markets are higher, with the Toronto exchange index at 12,112 points and the TSX Venture index 1,247 points.
   Lotto 6-49: (Aug. 22) 9, 13, 19, 32, 41 and 49; bonus 17. (Aug. 18) 7, 14, 15, 23, 35 and 37; bonus 36. Lotto Max: (Aug. 17) 18, 19, 22, 27, 29, 36 and 47; bonus 25.


   Regional briefs:
   - An influential newspaper executive is proposing that a $13-billion refinery be built in British Columbia instead of shipping unprocessed Alberta oil sands crude to Asia. David Black, who heads the Black Press Group, said this would create Canadian jobs and be safer to ship as finished products such as gasoline, kerosene and diesel. The current proposal is to build the Northern Gateway pipeline to move the crude to a port in Kitimat for shipping overseas.
   - Ontario’s Liberal government will hold a special session early this week to consider a bill to force new contracts with no pay raises for two years for the province’s school teachers. Conservative Leader Tim Hudak said his party will vote in favor of the controversial legislation that also bans lockouts and strikes in a bid to attack a $15-billion government spending deficit.
   - Consumers can expect to benefit from even lower prices for lobster. As the fall lobster fishing season is getting underway in Atlantic Canada, Prince Edward Island fishermen say they are getting far less than they did last spring and half what was paid 10 years ago. Buyers are paying just $2.50 a pound for “canners” and $2.75 a pound for market-sized lobsters.


Jim Fox can be reached at canadareport@hotmail.com

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