Canada column for Sunday, Jan. 18/15
THE CANADIAN REPORT
(c) By Jim Fox
The Canadian economy’s post-recession recovery is at risk over low oil prices that could ruin the government’s promise of a pending budget surplus.
Alberta – in the heart of Canada’s oil-patch – could even be looking at implementing a provincial sales tax or higher income taxes to counter the crisis.
With the price oil plummeting to near $45 a barrel, half of what it was six months ago, Suncor said it will cut 1,000 oil sands’ jobs and reduce its spending by $1 billion.
Shell Canada announced layoffs of up to 300 workers at the Albian Sands north of Fort McMurray.
TD Bank said slumping oil prices could cause a $2.3-billion federal budget shortfall in the 2015-16 fiscal year instead of a predicted $1.6-billion surplus.
Continued low crude prices would significantly discourage investment in the oil sector, Timothy Lane, the Bank of Canada’s deputy governor said.
As billions of dollars are being lost in oil-rich Alberta, Premier Jim Prentice said implementing a sales tax – the only province that doesn’t have one – is up for discussion.
“I'm not embracing a sales tax,” Prentice said, adding that he “wants to hear” what Albertans think about it.
After struggling to make it in the Canadian marketplace for two years, Target Corp. is closing its 133 stores that employ 17,600 people.
Canadians were well aware of the Minneapolis-based retailer and still cross the border in big numbers to shop at Target in the U.S.
But the foray into Canada started off badly with the company advising Canadians not to expect the same selection or low prices they find over the border.
Many shoppers have complained about empty store shelves and advertised products not being available.
Brian Cornell, Target CEO, said the Canadian operations didn’t show any hope of profitability “until at least 2021.”
The stores will remain open during a court-supervised liquidation and workers are to receive four months’ severance pay.
News in brief:
- Three Ottawa men have been arrested for conspiracy to participate in terrorist activity. The Mounties say twin brothers Ashton Carleton Larmond and Carlos Honor Larmond, 24, and Suliman Mohamed, 21, face various terrorism-related charges. Carlos Larmond was arrested at the Montreal airport trying to board a plane allegedly to take part in terrorist activity, police said. Further details will be available when they appear in court on Feb. 12.
- Canada’s Maple Leaf flag will mark its 50th anniversary on Feb. 15 but some people are calling for more of a celebration by the federal government. Roy Mayer, who founded the Canada Flag Holiday Campaign, has called for a national holiday to honor the flag that was a project of the late Liberal prime minister Lester Pearson.
Facts and figures:
Canada’s dollar has moved lower to 83.85 cents U.S. while the U.S. dollar returns $1.1925 in Canadian funds, before bank exchange fees.
The Bank of Canada’s key interest rate is steady at 1 percent while the prime-lending rate is unchanged at 3 percent.
Stock markets are lower, with the Toronto exchange index at 14,092 points and the TSX Venture index 661 points.
The average price of a liter of gasoline across Canada has taken a big drop to 89.53 cents (Canadian).
Lotto 6-49: (Jan. 14) 15, 16, 17, 28, 33 and 44; bonus 36. (Jan. 10) 1, 11, 23, 25, 27 and 30; bonus 43. Lotto Max: (Jan. 9) 3, 7, 12, 18, 31, 33 and 35; bonus 26.
- Bus drivers who don’t call out stops to help visually impaired riders are being disciplined by BC Transit. Drivers in Victoria were ordered to announce street names since last April after a complaint to the B.C. Human Rights Tribunal. The driver’s union says that is unsafe and they need to pay attention to driving, suggesting instead the installation of an automated call system.
- A Toronto-area woman has pleaded guilty to eight counts of aggravated assault for injecting silicone oil during buttocks enhancement procedures for women. The court hearing for Marilyn Eli Reid, 48, of Aurora was told that two of the women almost died from the injections. She used caulking guns to inject the substance and charged the victims thousands of dollars.
Jim Fox can be reached at email@example.com