Gas prices soar, more Canadians plan "staycations"

   Canada column for Sunday, April 8/12

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   THE CANADIAN REPORT

   (c) By Jim Fox

   Canadians are planning more “staycations” as gasoline prices have surged and are poised to climb even higher.

   Staying-near-home vacations are among ways Canadians are suggesting to conserve fuel after prices jumped about 16 cents a gallon at midweek.

   The hike pushed the price of a regular gas to a national average of $1.355 a liter ($5.15 a U.S. gallon).

   Industry watchers are predicting record-high prices – as much as $1.50 a liter ($5.70 a gallon) – by summer even though crude oil is less expensive this year.

   Prices reached a high of $1.479 a liter ($5.62 a gallon) in Montreal; $1.44 ($5.47) in Halifax; $1.40 ($5.32) in Toronto; $1.364 ($5.18) in Vancouver; and the lowest at $1.129 ($4.29) in Edmonton, in Alberta oil country.

   Reasons for the jump at the pump include switching refineries to summer gas, the changeover from producing home-heating oil, refinery capacity and shutdowns, and tensions in the Middle East oil-producing countries.

   As Canada is a major oil exporter, higher prices are of some benefit but not for those who drive.

   “Rising prices concern everyone,” Finance Minister Jim Flaherty said, adding: “The price of oil is a global one – it's not a national price.”

Cross-border shoppers benefit; pension age to rise in Canada

   Canada column for Sunday, April 1/12

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   THE CANADIAN REPORT

   (c) By Jim Fox

   U.S. businesses stand to cash in from the Canadian government budget that will also make everyone wait longer for retirement benefits.

   Cross-border shoppers as of June 1 can bring back $200 in goods duty-free after being away for 24 hours, up from $50, and $800 after 48 hours, up from $400.

   To cope with the huge number of “baby boomers” retiring, the government will raise the age to receive the “old-age pension,” now at a maximum $6,481 a year, to 67 from 65 starting 11 years from now.

   Other highlights of the budget include a 10-percent funding cut, or $115 million, starting in 2014, for the Canadian Broadcasting Corp. and a reduction of $1.1 billion in the $20-billion defense budget by 2014-2015.

   The government will eliminate 19,200 public-service jobs and reduce spending on programs by $5.2 billion a year.

   The good news was that the current annual deficit was reduced to $24.9 billion from a projected $31 billion, with the budget’s goal to eliminate it completely by 2015-16.

Canada seeks Asian Pacific markets for oil, energy resources

   Canada column for Sunday, March 25/12

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   THE CANADIAN REPORT

   (c) By Jim Fox

   Canada’s government continues its quest to boost prosperity by selling some of its vast energy resources to Asian Pacific countries after feeling snubbed by the United States.

   In Thailand, Prime Minister Stephen Harper announced an agreement for talks toward a free-trade deal.

   This is his second visit and sales pitch to Asia after the U.S. government shelved a decision on allowing construction of the Keystone XL pipeline to deliver Canadian crude oil to Texas refineries.

   "Our government believes it's essential that we be able to sell our energy products outside of North America to countries other than the United States," Harper said.

   After the Keystone decision delay, Canada now wants to proceed with the Northern Gateway pipeline to move Alberta crude one province west to British Columbia ports to supply oil-thirsty Asian countries.

   Harper visited China in February and on this trip will also visit Japan and South Korea to talk trade.

Immigration policy costly to Canadian taxpayers: Fraser Institute

   Canada column for Sunday, March 18/12

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   THE CANADIAN REPORT

   (c) By Jim Fox

   A leading public policy organization wants Canada’s immigration selection process revamped to counter the huge cost caused by people emigrating to the country.

   The Fraser Institute said the cost of supporting immigrants who arrived in Canada between 1987 and 2004 is between $16 billion and $23 billion a year.

   That’s because they receive more in government services and payments per person than they pay in taxes.

   “As a result of Canada's welfare-state policies, our progressive income taxes and universal social programs, these immigrants impose a huge fiscal burden on Canadian taxpayers," said report co-author Herbert Grubel.

   Immigrants who have come to Canada since 1987 “are not doing as well economically” as those who came previously, with their annual income 72 percent of that of other Canadians, he said.

   The controversial report calls on the government to scrap the points-based selection process and instead let the market decide the types of workers and professionals that are needed in Canada.

   Report co-author Patrick Grady said their lower income and tax payments “are likely to persist over all stages of their lives.”

Air Canada strike/lockout averted by federal government

   Canada column for Sunday, March 11/12

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   THE CANADIAN REPORT

   (c) By Jim Fox

   The Canadian government has moved swiftly to avert a labor disruption that would have grounded Air Canada flights during the busy March school break week.

   Air Canada was preparing to lock out its 3,000 pilots at midnight Sunday as the union representing 8,600 mechanics, baggage handlers and cargo agents planned to go on strike.

   The work stoppage would have coincided with the holiday break when hundreds of thousands of Canadians are flying to southern destinations and abroad.

   “I'll be darned if we will now sit by and let the airline shut itself down,” Prime Minister Stephen Harper said Friday.

   Labor Minister Lisa Raitt called in the Canadian Industrial Relations Board to investigate the “potential effects on health and safety” that a strike/lockout would cause.

   The investigation will involve contract demands for both pilot and ground workers unions and no work stoppage is allowed during that time.

   “My concern is not management or labor: my concern is the broader Canadian public and I think the public overwhelmingly expects the government to act,” Harper said.

Tough budget coming for Canadians on March 29

   Canada column for Sunday, March 4/12

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   THE CANADIAN REPORT

   (c) By Jim Fox

   Canadians will learn on March 29 how the federal government plans to cut spending by about $5 billion a year within three years.

   The much-awaited, no-frills federal budget will outline “what we’re doing in terms of the deficit-reduction action plan and much more than that, this is a jobs and growth budget,” Finance Minister Jim Flaherty said.

   There are concerns the Conservative government will cut programs, jobs and announce a plan to start scaling back pensions, including making Canadians wait beyond age 65 to receive the monthly “Old Age Security” payments.

   Government workers are bracing for cutbacks and plan to protest next Thursday on Parliament Hill in Ottawa.

   They have been “protected” during the recession and it is “realistic that we ask the public service to participate in the belt-tightening,” Flaherty said.

   Overall, the government is “talking about relatively small spending reductions,” he said, with cuts being “modest” in a budget of $265 billion.

   Government revenues are expected to be more than predicted with the continued strength of commodity prices, particularly for oil, a major Canadian export.

Canadians need to be wary of mounting debt, central bank warns

   Canada column for Sunday, Feb. 26/12

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   THE CANADIAN REPORT

   (c) By Jim Fox

   Canadians who have taken advantage of record-low interest rates must moderate their debt load or possibly face “substantial negative economic consequences,” the Bank of Canada warns.

   In a research paper, Canada’s central bank said many Canadians have constructed their finances on a “house of cards.”

   This could come crashing down once interest rates start increasing or if housing prices fall, it said.

   The bank cautioned that families have taken on too much debt but didn’t expect there would be a U.S.-style housing meltdown as banks have more stringent credit regulations in Canada.

   Debt loads have been rising, with a typical 31- to 35-year-old now owing $120,000 compared to $75,000 a decade ago, the report said.

   Finance Minister Jim Flaherty said interest rates have “nowhere to go but up," although economists don’t suggest that will happen for more than a year.

   “It isn’t necessary for everyone to have the most expensive house they can buy," he said.

   The concern is that house prices have risen sharply in the past decade and continue to do so along with debt for to pay for larger mortgages and home equity loans to finance other purchases.