CANADA ECONOMICS
INTERNATIONAL TRADE
StatCan. 2017-11-03. Canadian international merchandise trade, September 2017
Imports: $46.7 billion
September 2017, -0.3% decrease (monthly change)
Exports: $43.6 billion
September 2017, -0.3% decrease (monthly change)
Trade balance: -$3.2 billion, September 2017
Source(s): CANSIM table 228-0069
Canada's merchandise trade deficit with the world totalled $3.2 billion in September, essentially unchanged from the previous month. Exports were down 0.3% on lower passenger car and light truck exports, while imports decreased 0.3% on lower prices.
Chart 1: Merchandise exports and imports
Exports down despite increases in most sections
Total exports were down 0.3% to $43.6 billion in September, the fourth consecutive monthly decline since the record high in May. Lower exports of motor vehicles and parts were largely offset by higher exports of energy products. Prices decreased 0.6%, while volumes rose 0.3%. Exports excluding energy products fell 1.8%. However, exports excluding motor vehicles and parts were up 1.8%. Year over year, total exports rose 0.3%.
In September, exports of motor vehicles and parts fell 10.6% to $6.5 billion. This was the fourth consecutive monthly decrease and the lowest level since February 2015. Exports of passenger cars and light trucks (-15.6%) were responsible for the decline in September, due to work stoppages in the automotive industry as well as changes to certain models destined for the American market.
This decrease was largely offset by higher exports of energy products, up 7.2% to $7.8 billion in September. Exports of crude oil and crude bitumen (+9.5%) were responsible for the gain, mainly on increased volumes. Exports of crude oil were higher in September than in previous years.
Widespread decline in imports led by electronic and electrical equipment and parts
Total imports amounted to $46.7 billion in September, down 0.3% from the previous month. Declines in the electronic and electrical equipment and parts and consumer goods sections were mostly offset by higher imports of energy products. Prices decreased 1.5%, while volumes were up 1.3%. Year over year, total imports fell 2.0%, with the peak in September 2016 due to the import of a module for the Hebron offshore oil project.
Imports of electronic and electrical equipment and parts were down 4.6% to $5.1 billion in September. Communications and audio and video equipment (-6.9%) posted the largest decrease, mainly on lower imports of cell phones in September compared with previous years.
Imports of consumer goods fell 1.9% to $9.9 billion in September, a fifth consecutive monthly decline. Following a 7.6% increase in August, pharmaceutical and medicinal products (-7.0%) posted a similar decline in September, returning to July levels ($1.4 billion).
Lower exports to the United States
Exports to the United States fell 1.2% to $32.3 billion in September, due to lower exports of passenger cars and light trucks. Imports from the United States rose 0.4% to $30.1 billion. As a result, Canada's trade surplus with the United States narrowed from $2.7 billion in August to $2.2 billion in September. The Canadian dollar gained 2.1 US cents on average relative to the US dollar between August and September.
Exports to countries other than the United States rose 2.4% to $11.3 billion, as higher exports to China (unwrought gold) and Brazil (pharmaceutical products) were partially offset by lower exports to Japan (iron, coal and copper).
Imports from countries other than the United States fell 1.4% to $16.6 billion in September. Lower imports from Switzerland (pharmaceutical products) and Japan (gold bars) were partially offset by higher imports from Saudi Arabia (crude oil) and Singapore.
As a result, Canada's trade deficit with countries other than the United States narrowed from $5.8 billion in August to $5.3 billion in September.
Sharp decrease in quarterly exports and imports
Following four consecutive quarterly gains, exports fell 7.9% to $131.2 billion in the third quarter of 2017, the strongest decrease since the second quarter of 2009. Motor vehicles and parts contributed the most to the decline.
Imports were down 4.9% to $140.7 billion, returning to first quarter levels. Declines were widespread throughout the sections in the third quarter.
Export prices were down 4.8% while import prices decreased 4.6% in the third quarter. These declines coincided with an average increase of the Canadian dollar of 5.5 US cents relative to the US dollar between the second and third quarters.
As a result, Canada's quarterly trade deficit with the world widened from $5.5 billion in the second quarter to $9.4 billion in the third quarter.
Real imports and exports down in the third quarter
Following a 2.4% increase in the second quarter, real exports were down 3.2% in the third quarter, primarily due to lower real exports of motor vehicles and parts.
Real imports edged down 0.2%, resulting in Canada's real trade balance moving from a $340 million surplus in the second quarter to a $3.4 billion deficit in the third quarter.
Chart 2: International merchandise trade balance
Revisions to August exports and imports
Revisions reflected initial estimates being updated with or replaced by administrative and survey data as they became available, as well as amendments made for late documentation of high-value transactions. Exports in August, originally reported as $43.6 billion in last month's release, were revised to $43.7 billion in the current month's release. August imports, originally reported as $47.0 billion in last month's release, were revised to $46.9 billion.
FULL DOCUMENT: http://www.statcan.gc.ca/daily-quotidien/171103/dq171103b-eng.pdf
THE GLOBE AND MAIL. REUTERS. NOVEMBER 3, 2017. Canada trade deficit unchanged; exports and imports both drop
OTTAWA - Canada's trade deficit remained at $3.18-billion in September as imports and exports dropped for the fourth consecutive month, according to Statistics Canada data released on Friday.
Analysts in a Reuters poll had forecast a shortfall of $3.00-billion. Since Statscan started compiling trade data in 1946, exports and imports never both declined for four months in a row.
Exports fell by 0.3 per cent to $43.56-billion. Shipments of motor vehicles and parts shrank by 10.6 per cent due to work stoppages and the introduction of changes to certain models destined for the U.S. market.
Excluding the auto sector, exports rose by 1.8 per cent in September.
Imports slipped by 0.3 per cent to $46.74-billion on widespread declines. Electronic and electrical equipment and parts dropped 4.6 per cent, mainly on lower imports of cellphones.
Exports to the United States fell by 1.2 per cent, while imports rose by 0.4 per cent. As a result, the trade surplus with the United States, which accounted for 74.1 per cent of Canadian goods exports in September, shrank to $2.16-billion from $2.66-billion in August.
The Globe and Mail. 3 Nov 2017. SOFTWOOK LUMBER. U.S. hits Canadian softwood with final duties. Softwood: Talks broke down over ‘hot-market provision’
BRENT JANG
ADRIAN MORROW
The U.S. Department of Commerce has imposed final tariffs averaging 20.83 per cent against most Canadian shipments of softwood lumber into the United States, intensifying trade tensions between the two countries.
The weighted average tariffs levied by the Trump administration consist of 14.25 per cent for countervailing duties and 6.58 per cent for anti-dumping levies.
“While I am disappointed that a negotiated agreement could not be made between domestic and Canadian softwood producers, the United States is committed to free, fair and reciprocal trade with Canada,” Commerce Secretary Wilbur Ross said in a statement on Thursday. “This decision is based on a full and unbiased review of the facts in an open and transparent process that defends American workers and businesses from unfair trade practices.”
The move comes amid deadlocked talks to overhaul the North American free-trade agreement, adding one more strain to the already tense relationship between Ottawa and the Trump administration.
The final determination by the Commerce Department reduces the combined lumber tariff, compared with 26.75 per cent in the preliminary findings.
But Thursday’s decision to uphold the imposition of tariffs comes as a setback for Canadian producers that had been hoping for a breakthrough softwood deal. The Canadian government and forestry industry say that the flow of lumber from Canada into the United States should be embraced and not feared by Americans.
“The U.S. Department of Commerce’s decision on punitive countervailing and anti-dumping duties against Canada’s softwood-lumber producers is unfair, unwarranted and deeply troubling,” said a joint release issued by Foreign Affairs Minister Chrystia Freeland and Natural Resources Minister Jim Carr.
“We urge the U.S. administration to rescind these duties, which harm workers and communities in Canada. These duties are a tax on American middle-class families, too, whose homes, renovations and repairs will only be more expensive. Further, it is clear the tariffs are worsening the lumber-supply problem in the United States and forcing U.S. home builders to look overseas to meet their demand for lumber.”
The 2006 softwood-lumber agreement between Canada and the United States expired in October, 2015. A group led by the U.S. Lumber Coalition began flexing its muscles in November, 2016, after the expiration of a one-year litigation moratorium, petitioning the Commerce Department to impose preliminary countervailing and anti-dumping duties on Canadian lumber shipments into the United States. That move turned out to be successful in 2017, with the Commerce Department deciding to penalize Canadian producers, first with countervailing duties starting on April 28 for what the United States sees as subsidized Canadian lumber and then anti-dumping duties beginning on June 30.
The long-running softwood fight factors into one of the most controversial elements of the bilateral agreement – NAFTA’s Chapter 19, which sets up trade panels to settle disputes, including for softwood.
Last week, West Fraser Timber Co. Ltd. chief executive officer Ted Seraphim said the lack of progress in renegotiating NAFTA paints a gloomy outlook for reaching a separate softwood deal any time soon. He also said the U.S. lumber lobby is unwilling to compromise in the Canada-U.S. softwood dispute, a stand that points to a long impasse in the trade battle.
One source with knowledge of the softwood discussions said the impediment to a deal was the U.S. lumber industry, which appeared to prefer hitting Canada with tariffs rather than agreeing to a negotiated settlement.
Early in his tenure as Commerce Secretary, Mr. Ross proposed a deal based on stumpage fees, in which Canada would agree to a market mechanism for calculating what companies would pay to fell timber, the source said. But Mr. Ross swiftly dropped the idea after speaking with U.S. industry.
Instead, negotiations focused on a market-share arrangement, in which Canada would agree to cap its softwood sales to the United States at a specific quota. The two sides were close to an agreement over the summer. Under that arrangement, the source said, the Canadian quota would have been a little more than 30 per cent of U.S. market share to start, falling to slightly less than 30 per cent over five years, then holding steady for another five.
The talks, however, deadlocked over whether Canada would be able to exceed its cap in the event U.S. companies could not produce enough to meet the rest of the demand. Canada argued that such a “hot-market provision” would be better for the United States than importing the extra wood from Russia and Germany. But the U.S. would not budge.
Zoltan van Heyningen, executive director of the U.S. Lumber Coalition, denied that the American industry was the barrier to a deal. The real problem, he said, was that Canadian sector could not agree on a common position, with some companies favouring a market-share deal and others preferring an export tax.
“Such a claim by Canada would be ridiculous after all the efforts we and our government have put into realizing an agreement, and the inability of the Canadian industry to have a unified position on any agreement to this day,” he wrote in an e-mail.
Canada is expected to appeal Thursday’s ruling under Chapter 19, or to the U.S. Court of International Trade, or through the World Trade Organization.
West Fraser now faces a combined duty of 23.76 per cent, Canfor Corp. 22.13 per cent, Tolko Industries Ltd. 22.07 per cent, Montreal-based Resolute Forest Products Inc. 17.90 per cent and New Brunswick-based J.D. Irving Ltd. 9.92 per cent. West Fraser, Canfor and Tolko are based in British Columbia. Rates fell for the three B.C. producers and rose for Resolute and Irving.
Other Canadian producers will pay 20.83 per cent.
The new anti-dumping rate is slated to kick in within days, while the new countervailing duty would take effect after the U.S. International Trade Commission makes its final ruling by Dec. 21 into the issue of U.S. lumber producers being injured.
REUTERS. NOVEMBER 2, 2017. SOFTWOOD LUMBER. U.S. imposes final duties on Canadian softwood lumber
Lesley Wroughton, Julie Gordon
WASHINGTON/VANCOUVER (Reuters) - The U.S. Commerce Department, accusing Canada of unfairly subsidizing and dumping softwood lumber in the United States, on Thursday set final duties on imports and Canada said it would appeal the decision, which comes during tense NAFTA trade talks.
The duties would impose anti-dumping and anti-subsidy duties affecting about $5.66 billion worth of imports of the key building material, the department said.
The combined final duty rates range from about 10 percent to nearly 24 percent, lower than a preliminary range of about 17 percent to 31 percent.
Canadian Prime Minister Justin Trudeau denounced what he called the “unjust and punitive” final measures while acknowledging they could have been worse.
“We are, I guess, pleased that they are not as bad as they were before but they still represent a burden on forestry workers and communities all across this country,” he told reporters in Brampton, Ontario. “We will continue to work with the American administration to resolve this in a negotiated way.”
British Columbia’s Lumber Trade Council called the measures protectionist and said it planned to challenge the decision.
“We will be immediately filing appeals of these final duties,” Susan Yurkovich, president of the BC Lumber Trade Council told reporters.
The appeals, one under NAFTA and the other to the World Trade Organization, will be jointly filed, including the Canadian government and affected provinces, as soon as the rates are published in the U.S. Federal Register, a spokeswoman for British Columbia’s Forestry Ministry said.
The U.S. International Trade Commission will make a final rule on the issue by Dec. 18.
FAILED TALKS
The U.S. Commerce Department said exporters from Canada have sold softwood lumber in the U.S. market at 3.20 percent to 8.89 percent less than fair value, and that Canada was providing unfair subsidies at rates of 3.34 percent to 18.19 percent.
The decision follows failed talks to end the decades-long lumber dispute between the neighbors.
“This decision is based on a full and unbiased review of the facts in an open and transparent process that defends American workers and businesses from unfair trade practices,” U.S. Commerce Secretary Wilbur Ross said in a statement.
The disagreement centers on the fees paid by Canadian lumber mills for timber cut largely from government-owned land. They are lower than fees paid on U.S. timber, which comes largely from private land.
Jason Brochu, co-chair of the U.S. Lumber Coalition and president of Pleasant River Lumber Company, said the duties helped “to level the playing field” for U.S. lumber companies, which could now expand production to meet demand.
But the National Association of Home Builders denounced the move saying it would drive up lumber prices at a time when communities were trying to rebuild after hurricanes and California wildfires.
“This tariff only adds to the burden by harming housing affordability and artificially boosting the price of lumber,” said NAHB Chairman Granger MacDonald. “It is nothing more than a thinly-disguised tax on American home buyers, home builders and consumers.”
The decision is likely to further escalate tensions between the United States and Canada during talks between the United States, Canada and Mexico to modernize NAFTA, which U.S. President Donald Trump has threatened to withdraw from.
In September, the United States slapped preliminary anti-subsidy duties on Canadian jetmaker Bombardier Inc’s CSeries jets after rival Boeing Co accused Canada of unfairly subsidizing the aircraft.
Additional reporting by David Ljunggren in Ottawa and Eric Walsh in Washington; editing by David Alexander and Andrew Hay
Canadian International Trade Tribunal. November 2, 2017. Tribunal Finds no Injury nor Threat of Injury—Silicon Metal from Brazil, Kazakhstan, Laos, Malaysia, Norway and Thailand
Ottawa, Ontario, —The Canadian International Trade Tribunal today found that the dumping and subsidizing of silicon metal, originating in or exported from the Federative Republic of Brazil, the Republic of Kazakhstan, Lao People’s Democratic Republic, Malaysia, the Kingdom of Norway and the Kingdom of Thailand, have not caused and are not threatening to cause injury to the domestic industry. Anti-dumping and countervailing duties will therefore not be collected by the Canada Border Services Agency. The complainants in this case were Québec Silicon Limited Partnership and its affiliate QSIP Canada ULC of Bécancour, Quebec.
The Tribunal will issue the reasons for its finding on November 17, 2017.
The Tribunal is an independent quasi-judicial body that reports to Parliament through the Minister of Finance. It hears cases on dumped and subsidized imports, safeguard complaints, complaints about federal government procurement and appeals of customs and excise tax rulings. When requested by the federal government, the Tribunal also provides advice on other economic, trade and tariff matters.
STATEMEN
SILICON METAL
Inquiry No. NQ-2017-001
Finding issued on Thursday, November 2, 2017
IN THE MATTER OF an inquiry, pursuant to section 42 of the Special Import Measures Act, respecting:
silicon metal originating in or exported from the Federative Republic of Brazil, the Republic of Kazakhstan, Lao People’s Democratic Republic, Malaysia, the Kingdom of Norway and the Kingdom of Thailand
FINDING
The Canadian International Trade Tribunal, pursuant to the provisions of section 42 of the Special Import Measures Act, has conducted an inquiry to determine whether the dumping of silicon metal containing at least 96.00% but less than 99.99% silicon by weight, and silicon metal containing between 89.00% and 96.00% silicon by weight that contains aluminum greater than 0.20% by weight, of all forms and sizes, originating in or exported from the Federative Republic of Brazil, the Republic of Kazakhstan, Lao People’s Democratic Republic, Malaysia, the Kingdom of Norway and the Kingdom of Thailand, and the subsidizing of the above-mentioned goods originating in or exported from the Federative Republic of Brazil, the Republic of Kazakhstan, Malaysia, the Kingdom of Norway and the Kingdom of Thailand, have caused injury or are threatening to cause injury to the domestic industry.
This inquiry is pursuant to the issuance by the President of the Canada Border Services Agency, on July 5, 2017, of a preliminary determination of dumping with respect to the above-mentioned goods originating in or exported from the Federative Republic of Brazil, the Republic of Kazakhstan, Lao People’s Democratic Republic, Malaysia, the Kingdom of Norway and the Kingdom of Thailand, and a preliminary determination of subsidizing with respect to the above-mentioned goods originating in or exported from Federative Republic of Brazil, the Republic of Kazakhstan, Malaysia, the Kingdom of Norway and the Kingdom of Thailand.
On October 3, 2017, the President of the Canada Border Services Agency made a final determination of dumping in respect of the above-mentioned goods originating in or exported from the Federative Republic of Brazil (excluding those goods exported by Rima Industrial S.A.), the Republic of Kazakhstan, Lao People’s Democratic Republic, Malaysia and the Kingdom of Thailand, and a final determination of subsidizing in respect of the above-mentioned goods originating in or exported from the Federative Republic of Brazil, the Republic of Kazakhstan, Malaysia and the Kingdom of Norway.
The Canadian International Trade Tribunal hereby finds, pursuant to subsection 43(1) of the Special Import Measures Act, that the dumping and/or subsidizing of the above-mentioned goods originating in or exported from the Federative Republic of Brazil, the Republic of Kazakhstan, Lao People’s Democratic Republic, Malaysia, the Kingdom of Norway and the Kingdom of Thailand have not caused injury and are not threatening to cause injury to the domestic industry.
Ann Penner
Member: Serge Fréchette
The statement of reasons will be issued within 15 days.
Canadian International Trade Tribunal—Newly Published Documents: http://www.citt-tcce.gc.ca/en/node/8090
ECONOMY
Department of Finance Canada. November 3, 2017. Official International Reserves
Ottawa - The Department of Finance Canada announced today that Canada’s official international reserves decreased by an amount equivalent to US$952 million during October to US$83,387 million.
Details on the level and composition of Canada’s reserves as of October 31, 2017, as well as the major factors underlying the change in reserves, are provided below. All figures are in millions of US dollars unless otherwise noted.
| Millions of US dollars | |
|---|---|
| Securities | 62,244 |
| Deposits | 11,171 |
| Total securities and deposits (liquid reserves): | 73,415 |
| Gold | 0 |
| Special drawing rights (SDRs) | 7,851 |
| Reserve position in the IMF | 2,121 |
| Total: | |
| October 31, 2017 | 83,387 |
| September 29, 2017 | 84,339 |
| Net change: | -952 |
FULL DOCUMENT: http://www.fin.gc.ca/n17/17-108-eng.asp
VENEZUELA
Global Affairs Canada. November 3, 2017. Canada imposes sanctions on individuals linked to human rights violations and corruption
Ottawa, Ontario - Under the new Justice for Victims of Corrupt Foreign Officials Act, the Honourable Chrystia Freeland, Minister of Foreign Affairs, today announced targeted sanctions against 52 individuals.
The sanctions target individuals who are, in the opinion of the Government of Canada, responsible for, or complicit in, gross violations of internationally recognized human rights or acts of significant corruption.
These sanctions place an asset freeze in Canada on all listed people, and render listed persons as inadmissible to Canada under the Immigration and Refugee Protection Act.
Quotes
“Canada is determined to protect human rights and combat corruption worldwide. Today’s announcement sends a clear message that Canada will take action against individuals who have profited from acts of significant corruption or who have been involved in gross violations of human rights. Canada’s Parliament recently passed the Justice for Victims of Corrupt Foreign Officials Act, and I am pleased we are today using this new and fit-for-purpose tool for the first time.”
- Hon. Chrystia Freeland, P.C., M.P., Minister of Foreign Affairs
Quick Facts
- The Justice for Victims of Corrupt Foreign Officials Act entered into force on October 18, 2017.
Case 2: Canada remains concerned about the pervasiveness of significant corruption and violations of human rights in Venezuela, which are contributing to the serious crisis in that country.
Backgrounder
Canada remains concerned about the pervasiveness of significant corruption and violations of human rights in Venezuela, which are contributing to the serious crisis in that country.
Effective immediately, Canada is imposing sanctions pursuant to the Justice for Victims of Corrupt Foreign Officials Act against 19 Venezuelan officials, including President Nicolás Maduro. These individuals are responsible for, or complicit in, gross violations of internationally recognized human rights, have committed acts of significant corruption, or both. These measures are consistent with Canadian principles and values, and support Canada’s international efforts to restore democracy in Venezuela.
These actions are in addition to sanctions imposed on September 22, 2017, pursuant to the Special Economic Measures Act on Venezuela and key figures in the Maduro regime.
The names of the individuals targeted by these sanctions are:
- Nicolás MADURO MOROS
- Tareck Zaidan EL AISSAMI MADDAH
- Gustavo Enrique GONZÁLEZ LÓPEZ
- Adán Coromoto CHÁVEZ FRÍAS
- Luis Ramón REYES REYES
- Rocco ALBISINNI SERRANO
- Alejandro Antonio FLEMING CABRERA
- Rafael Darío RAMÍREZ CARREÑO
- Carlos Alberto OSORIO ZAMBRANO
- Luis Alfredo MOTTA DOMÍNGUEZ
- José Vicente RANGEL ÁVALOS
- Eulogio Antonio DEL PINO DÍAZ
- Nelson José MERENTES DÍAZ
- José David CABELLO RONDÓN
- Rodolfo Clemente MARCO TORRES
- José Gregorio VIELMA MORA
- Francisco José RANGEL GÓMEZ
- Ricardo Antonio MOLINA PEÑALOZA
- Argenis de Jesús CHÁVEZ FRÍAS
FULL DOCUMENT: https://www.canada.ca/en/global-affairs/news/2017/11/canada_imposes_sanctionsonindividualslinkedtohumanrightsviolatio.html
BOMBARDIER
The Globe and Mail. 3 Nov 2017. Bombardier signs new C Series deal. Bellemare says Airbus partnership has helped accelerate ‘sales momentum,’ and is giving customers more confidence to buy. Bombardier: Trains, private jet divisions have already achieved 2020 margin targets
NICOLAS VAN PRAET
Bombardier Inc. has clinched its first major C Series plane sale in 18 months, sparking new life into the slow-selling aircraft program as the Canadian company sketches out plans for its future under a new partnership with Airbus Group SE.
The Montreal-based plane and train maker struck a letter of intent to sell 31 C Series planes to an unnamed customer in Europe, it said Thursday while reporting thirdquarter earnings. The buyer will also take purchase options on another 30 C Series aircraft. The firm portion of the order is valued at $2.4-billion (U.S.) before the discounts typically given on large-sized orders.
The order provides a much-welcome stimulus for the C Series program, which had languished without a significant sale since Delta Air Lines bought 75 jets in April, 2016. Aerospace consultancy AirInsight said the sale was made to a new customer and not an existing one, which is crucial because it signals fresh interest in the plane.
“With the Airbus news now in the open, the market for the C Series feels different now,” AirInsight said in an analysis. “Airlines and lessors can review and consider the C Series without anywhere near the risk and concern they had even three months ago.”
The new C Series sale was being negotiated well before the Airbus partnership was announced last month and didn’t come because of the tie-up. Still, Bombardier chief executive Alain Bellemare said bringing Airbus into the fold is giving customers more confidence to buy.
“It is clearly helping us to accelerate the sales momentum,” Mr. Bellemare said on a conference call with stakeholders. “We had, and we still have, a number of very active campaigns ongoing.” He declined to give further details.
One near-term deal could be struck with EgyptAir. The Cairobased carrier is set to place an order for a dozen C Series CS300 models in an announcement that could come at the Dubai Air Show later this month, according to local media reports in the African country. IAG, the parent of four carriers including British Airways and Iberia, is another logical buyer. The company has said the C Series could be particularly well suited to British Airways operations at London City Airport, where it flies Embraer and Airbus A318 jets.
Mr. Bellemare is now wrapping up the second year of a five-year effort to turn around Bombardier, which flirted with bankruptcy protection in 2015 as it struggled with a cash crunch and high cost structure. Since he took the helm, he has cut more than 14,500 jobs, restructured Bombardier’s train business, and struck an industry-changing agreement to cede control of the C Series program to Airbus in exchange for its sales and logistics power.
Airbus has a call option to buy Bombardier’s interest in the C Series in seven years’ time but Bombardier has no intention of exiting the commercial aerospace business, Mr. Bellemare said Thursday. He said a key benefit of the Airbus deal is to help Bombardier secure C Series sales and production volumes, which in turn will lead to lower procurement costs.
The company posted a net loss of $117-million or 5 cents a share for the quarter, compared with a net loss of $94-million or 4 cents a year ago. Revenue climbed 3 per cent to $3.8-billion. Stripping out special items such as costs associated with layoffs, earnings before interest and taxes (EBIT) grew to $165-million, nearly double the tally of last year’s third quarter. The company burned through $495-million of cash in the period.
Profit margins improved in each of Bombardier’s four business units. The trains and private jet divisions, which are the two biggest contributors to the company’s overall earnings and cash flow, have already achieved the 2020 margin targets management set in its turnaround plan.
“We expect progressive margin and cash flow improvement over the next several years that should bolster investor confidence,” National Bank analyst Cameron Doerksen said in a note to clients.
Bombardier said EBIT for the full year will be at least $630-million, at the upper end of what it previously forecast. It expects to book $16.3billion in revenue for fiscal 2017, roughly the same as 2016, and use $1-billion in cash. The company had $2.8-billion in short-term capital resources at the end of September.
Bombardier also confirmed suspicions on Thursday that it would not meet its previous target to deliver 30 C Series planes this year. Shipment of roughly 10 planes will get pushed into 2018 as the company deals with a shortage of geared turbofan engines supplied by United Technologies Corp.’s Pratt & Whitney unit. That in turn will bite into Bombardier’s revenue for the year.
Pratt has been wrestling with durability issues on the engines and had warned Oct. 24 that it couldn’t meet its commitments to Bombardier because it was first fixing engines on planes already in service. Pratt will pay Bombardier a cash advance to help remedy the situation, Bombardier said. Bombardier (BBD.B) Close: $2.95, up 17¢
LABOUR
StatCan. 2017-11-03. Labour Force Survey, October 2017
Employment — Canada: 18,489,000
October 2017, 0.2% increase (monthly change)
Unemployment rate — Canada: 6.3%
October 2017, 0.1 pts increase (monthly change)
Source(s): CANSIM table 282-0087
Employment increased by 35,000 in October, and the unemployment rate rose 0.1 percentage points to 6.3%. Employment gains in the month were driven by full-time work (+89,000), while fewer people worked part time (-53,000).
On a year-over-year basis, total employment rose by 308,000 (+1.7%), with full-time work increasing by 397,000 (+2.7%) and the number of people working part time declining by 89,000 (-2.5%). On a year-over-year basis, total hours worked were up 2.7%.
The unemployment rate trended downwards in the 12 months to October, falling 0.7 percentage points over this period.
Chart 1: Employment
Chart 2: Unemployment rate
Highlights
In October, employment rose for youth aged 15 to 24, while it was little changed for the core-aged population of 25- to- 54 year-olds, and for people 55 and older.
The largest employment increase was in Quebec, followed by Alberta, Manitoba, Newfoundland and Labrador, and New Brunswick. At the same time, there was a decline in Saskatchewan.
Employment rose in several industries, led by "other services;" construction; information, culture and recreation; and agriculture. Employment declined in wholesale and retail trade.
The number of private sector employees increased in October, while public sector employment and self-employment were little changed.
More youth working or searching for work
There were 18,000 more youths aged 15 to 24 employed in October, with all of the growth in full-time work. At the same time, their unemployment rate rose 0.8 percentage points to 11.1%, as more of them searched for work. On a year-over-year basis, employment for youth was virtually unchanged, while their unemployment rate fell 1.8 percentage points.
Despite more youth in the labour market in October, their participation rate—that is, the proportion working or searching for work—trended downwards in the 12 months to October, falling 0.8 percentage points to 63.7%. This rate was down for young men and edged down for young women. Overall, the participation rate among youth has remained lower than the average of 67% in 2007 and 2008, just prior to the economic downturn. Part of this decline is associated with social and economic factors such as increased school attendance and delayed entry into the labour market compared with previous generations. For more information on these trends, see "Youth Labour Force Participation: 2008 to 2014."
Employment holds steady for core-aged women and men
Total employment for core-aged 25- to 54-year-olds held steady in October, while their unemployment rate fell 0.2 percentage points to 5.4%. Employment for this group was up 174,000 (+1.5%) compared with 12 months earlier.
Among core-aged women, more worked full time (+32,000) in October, while the number working part time declined (-25,000). Their unemployment rate was little changed, at 5.1%. On a year-over-year basis, employment for this group rose 106,000 (+1.9%).
For men in the core-age group, part-time employment increased by 23,000 in October, while full-time employment was little changed. Their unemployment rate fell 0.3 percentage points to 5.6%, as fewer of them searched for work. Employment growth among this group totalled 68,000 (+1.1%) in the 12 months to October.
Employment for people 55 and older little changed in the month
Employment was little changed for people aged 55 and older, while their unemployment rate increased 0.3 percentage points to 5.7% as more of them—particularly men—searched for work. The unemployment rate for men in this age group was 6.2%, while it was 5.1% for women. On a year-over-year basis, 130,000 (+3.4%) more people aged 55 and older were working, largely the result of the continued transition of the baby-boom cohort into this older age group.
Among workers aged 55 and older, 8 in 10 were between the ages of 55 and 64. The estimated year-over-year employment growth rate for this group (unadjusted for seasonality) was 2.3%, relatively in line with their population increase (+2.0%). In comparison, people aged 65 and older comprised a smaller share of older workers, but their proportion has been increasing over the past decade. This group had the fastest year-over-year employment growth rate among the major demographic groups in October, rising 8.7% and outpacing their rate of population growth (+3.7%). For more information about recent trends among older workers, see "The impact of aging on labour market participation rates."
Provincial overview
The largest employment increase in October was in Quebec (+18,000). Full-time employment increased (+33,000), while part-time employment edged down. The unemployment rate was virtually unchanged at 6.1%, following a notable downward trend since the start of 2016. On a year-over-year basis, employment in Quebec was up by 67,000 (+1.6%).
Employment rose by 12,000 in Alberta, all in full-time work. At the same time, the unemployment rate was little changed at 7.8%. Compared with 12 months earlier, employment in the province was little changed (+17,000 or +0.7%) and the unemployment rate declined by 0.8 percentage points. The unemployment rate in Alberta has not fully rebounded to what it was in the fall of 2014, just prior to the oil-related downturn. The unemployment rate was 4.4% in November 2014 and reached a peak of 9.0% in November 2016.
In Manitoba, employment increased by 4,000 in October and the unemployment rate was down 0.3 percentage points to 5.2%. The unemployment rate had been on a strong downward trend from the fall of 2016 to the summer of 2017. On a year-over-year basis, employment in this province increased by 14,000 (+2.3%).
Employment in Newfoundland and Labrador rose by 3,400 in October, the first monthly increase in nine months. The unemployment rate in the province edged down to 14.5%. Employment in Newfoundland and Labrador was down on a year-over-year basis (-4,700 or -2.1%).
Chart 3: Unemployment rate by province, October 2017
For New Brunswick, employment was up by 2,300 in October, and the unemployment rate held steady at 7.8%. Compared with 12 months prior, employment in the province was virtually unchanged. The unemployment rate fell 2.0 percentage points, as fewer people searched for work and the number of people participating in the labour market declined.
Employment declined in Saskatchewan by 4,000 in October, while the unemployment rate decreased 0.3 percentage points to 5.9%. All of the employment decline was in full-time work. On a year-over-year basis, employment in the province was virtually unchanged, while the unemployment rate declined 1.1 percentage points. Like Alberta, the unemployment rate in Saskatchewan has not returned to the rates observed in the fall of 2014, just prior to the oil-related downturn. The unemployment rate was 3.5% in November 2014 and reached a high of 7.0% in October 2016.
In Ontario, employment was virtually unchanged in October, while the unemployment rate increased 0.3 percentage points to 5.9% as more people searched for work. On a year-over-year basis, employment in the province rose by 149,000 (+2.1%) and the unemployment rate fell 0.5 percentage points.
Employment in British Columbia was also little changed in October. Employment in the province has held steady since June 2017, following a strong upward trend which began in the spring of 2016. On a year-over-year basis, employment in the province was up by 64,000 (+2.7%) and the unemployment rate fell 1.2 percentage points to 4.9%.
Industry perspective
Employment was up by 21,000 in the "other services" industry in October. Compared with 12 months earlier, employment in this industry was little changed. "Other services" include services such as those related to civic and professional organizations, and personal and laundry services.
In construction, employment rose by 18,000 in October. Compared with October 2016, employment in construction was virtually unchanged.
There were 15,000 more people working in information, culture and recreation industries in October. On a year-over-year basis, employment in this industry was little changed.
In October, employment in agriculture increased by 6,100, reaching a level similar to that observed in October 2016.
Employment in professional, scientific and technical services was little changed in the month, but this industry was the fastest growing on a year-over-year basis, up 85,000 or 6.1%. Much of the year-over-year increase was in computer system design services.
Manufacturing employment edged up in October (+7,800) and was up by 51,000 (+3.0%) on a year-over-year basis. Employment in this industry has been on an upward trend since the start of 2017. The increase in the 12 months to October was mostly attributable to subsectors such as electrical equipment, appliance and component manufacturing.
Employment was down by 36,000 in trade, mostly in wholesale. On a year-over-year basis, employment in this industry was up by 47,000 (+1.7%).
The number of private sector employees rose by 39,000 in October, while public sector employment was little changed. Compared with 12 months earlier, the number of private sector employees increased by 165,000 (+1.4%) and public sector employment rose by 83,000 (+2.3%).
Self-employment was little changed in October, but was up by 60,000 (+2.1%) on a year-over-year basis.
Chart 4: Part-time employment rate, Canada, 1976 to 2016
Chart 5: Part-time employment rate by sex and age group, Canada, 1976 and 2016
FULL DOCUMENT: http://www.statcan.gc.ca/daily-quotidien/171103/dq171103a-eng.pdf
THE GLOBE AND MAIL. NOVEMBER 3, 2017. CANADIAN ECONOMY. Economy blows past expectations, creates 35,000 jobs in October
Canada's jobs market was on fire in October, creating tens of thousands of full-time positions.
The net increase to employment was 35,300, with a gain of 89,000 full-time jobs and the loss of 53,000 part-time positions, Statistics Canada said Friday.
Having said that, the jobless rate inched up to 6.3 per cent from September's 6.2 per cent as more people looked for work.
The Canadian dollar jumped near half a cent on the news to 78.56 (U.S.)
Over the past 12 months, employment is now up 1.7 per cent, or almost 310,000 jobs. Again, that's led by full-time positions, which are up 2.7 per cent or almost 400,000.
Quebec led October's surge, with a gain of 18,000.
In Alberta, employment also climbed, by 12,000, and all of them full-time jobs. Of course, unemployment is still at 7.8 per cent in the heart of the energy industry.
Notable, too, is that young people aged 15 to 24 gained the most.
"Growth indicators for Canada have been decelerating, but you wouldn't know it looking at the labour market, where employers are still beefing up their work force," said CIBC World Markets chief economist Avery Shenfeld.
"A 35,000 net addition to employment in October topped consensus expectations, and the 'quality' indicators this month were all on the side of angels. The growth was in full-time, private sector paid (not self-employed) positions, and led by cyclical goods industries (construction and manufacturing)."
The jobs report, however, showed a pick-up in average hourly wages, to 2.4 per cent from a year earlier and "a long way from the extreme lows of below 1 per cent in the spring and finally well north of inflation," said Bank of Montreal chief economist Douglas Porter.
Economists and the Bank of Canada are looking at that number closely, particularly given that September also showed a perkier statistics.
"While one single jobs report will not sway the Bank of Canada, officials will no doubt be encouraged by the moderate wage uptick," Mr. Porter said.
Royal Bank of Canada economist Josh Nye agreed.
"Stronger wage growth is also consistent with their expectation that tighter labour market conditions will feed through to wages, albeit with some lag," he said.
THE GLOBE AND MAIL. NOVEMBER 3, 2017. Job creation surges
MICHAEL BABAD, Columnist
Canada's jobs market was on fire in October, creating tens of thousands of full-time positions.
The net increase to employment was 35,300, with a gain of 89,000 full-time jobs and the loss of 53,000 part-time positions, Statistics Canada said today. The loonie popped above 78 cents (U.S.) in response.
Having said that, the jobless rate inched up to 6.3 per cent from September's 6.2 per cent.
Over the past 12 months, employment is now up 1.7 per cent, or almost 310,000 jobs. Again, that's led by full-time positions, which are up 2.7 per cent or almost 400,000.
Quebec led October's surge, with a gain of 18,000.
In Alberta, employment also climbed, by 12,000, and all of them full-time jobs. Of course, unemployment is still at 7.8 per cent in the heart of the energy industry.
Notable, too, is that young people aged 15 to 24 gained the most.
"Growth indicators for Canada have been decelerating, but you wouldn't know it looking at the labour market, where employers are still beefing up their work force," said CIBC World Markets chief economist Avery Shenfeld.
"A 35,000 net addition to employment in October topped consensus expectations, and the 'quality' indicators this month were all on the side of angels. The growth was in full-time, private sector paid (not self-employed) positions, and led by cyclical goods industries (construction and manufacturing)."
The U.S. jobs report, in turn, showed an October gain of 261,000, with unemployment easing to 4.1 per cent.
REUTERS. NOVEMBER 3, 2017. Canada job market shows unexpected strength, wage growth firms
David Ljunggren
OTTAWA (Reuters) - The Canadian economy added more jobs than expected in October as wages posted their biggest gain in 18 months, a sign that labor market slack could be tightening despite strong employment growth over the last year.
A "Help wanted" sign is seen in the window of a bakery in Ottawa, Ontario, Canada, November 2, 2017. REUTERS/Chris Wattie
Statistics Canada on Friday reported a net gain of 35,300 jobs - all of them due to a boost in full-time positions - but added the jobless rate had edged up to 6.3 percent as more people sought work.
Analysts in a Reuters poll had forecast 15,000 extra jobs and predicted the unemployment rate would stay at 6.2 percent.
The Bank of Canada, citing the need to remove monetary stimulus as the economy strengthened, raised interest rates in July and September and said it would closely review data before deciding whether to hike again.
Average hourly wages were up 2.4 percent from a year earlier, the strongest year-over-year increase since April 2016.
“Most importantly, we saw a little bit more acceleration in wages ... the labor data does support tighter (monetary) policy at some point next year and perhaps sooner than later,” said Andrew Kelvin, a senior rates strategist at TD Securities.
The Bank of Canada said last week various measures of wage growth remained below their historical averages.
The Canadian dollar quickly rose to C$1.2728 against the greenback, or 78.57 U.S. cents, up from C$1.2829, or 77.95 U.S. cents before the report was released.
Statscan said full-time employment jumped by 88,700 jobs while part-time positions dipped by 53,400.
On a year-over-year basis, employment rose by 308,100, or 1.7 percent, while the six-month average for employment growth was 29,700 jobs, up from 24,300 in September.
Doug Porter, chief economist at BMO Capital Markets, said the Bank of Canada would be “mildly encouraged” by the increase in year-over-year wage growth.
“But I think they need to see more evidence before they can consider raising rates again,” he said in a phone interview.
Separate trade data for September was much gloomier, possibly tempering the central bank’s enthusiasm for a third rate hike in quick succession.
Statscan said the trade deficit remained at C$3.18 billion ($2.50 billion) as imports and exports dropped for a fourth consecutive month.
Analysts in a Reuters poll had forecast a shortfall of C$3.00 billion. Since Statscan started compiling trade data in 1946, exports and imports never both declined for four months in a row.
($1=$1.27 Canadian)
Additional reporting by Susan Taylor, Solarina Ho and Fergal Smith in Toronto; Editing by Bernadette Baum
REUTERS. NOVEMBER 3, 2017. Canada adds more jobs than expected on gains in full-time work
OTTAWA (Reuters) - The Canadian economy added more jobs than expected in October on gains in full-time employment, but the jobless rate edged up to 6.3 percent as more people looked for work, data from Statistics Canada showed on Friday.
Canada created 35,300 jobs, the most since June. Analysts in a Reuters poll had forecast a net gain of 15,000 positions and predicted the jobless rate would stay at 6.2 percent.
Full-time employment jumped by 88,700 jobs while part-time positions dipped by 53,400. Average hourly wages were up 2.4 percent from a year earlier, the strongest annual increase since April 2016, in a sign labor market slack might be tightening.
Employment in the construction and manufacturing increased by 18,400 and 7,800 jobs respectively but slumped in the wholesale and retail trade sector, which shed 35,900 positions.
On a year-over-year basis, employment rose by 308,100, or 1.7 percent. The six-month average for employment growth was 29,700 jobs, up from 24,300 in September.
Reporting by David Ljunggren; Editing by Jeffrey Benkoe
BLOOMBERG. 3 November 2017. Record Gain in Full-Time Work Makes Canada a Jobs Machine
By Theophilos Argitis
- Two-month gain of 201k in full-timers is largest on record
- Average hourly pay gains hit 2.4%, fastest since April 2016
October was another stellar month of gains for Canada’s labor market, with signs of tightening that included stronger wage increases and the biggest-ever two-month surge in full-time employment.
Jobs increased by 35,300 in October from the previous month, Statistics Canada said Friday from Ottawa, more than double the 15,000 median forecast in a Bloomberg survey of economists.
The data reveal the expected slowing of Canada’s labor market has yet to materialize, potentially casting some questions about whether the Bank of Canada can continue to maintain a wait-and-see strategy toward raising interest rates.
“Growth indicators for Canada have been decelerating, but you wouldn’t know it looking at the labor market, where employers are still beefing up their workforce,” Avery Shenfeld, chief economist at Canadian Imperial Bank of Commerce, said in a note to investors.
The country has now produced job gains for 11 consecutive months -- the longest streak in more than a decade. While there is across-the-board strength, nowhere is it more evident than in the number of full-time jobs being created.
The country added 88,700 full-time jobs in October, and 200,700 over the past two months. That’s the biggest two-month gain in records going back to 1976. Just under 400,000 jobs have been created over the past 12 months, also one of the biggest such gains on record.
The Canadian dollar advanced as much as 0.7 percent to C$1.2768 per U.S. dollar. A recent deterioration of the outlook has fueled a 5 percent drop in the Canadian dollar since early September.
The job gains -- which more than doubled economists’ forecasts -- suggest the economy may be poised to end the year with a bang. Hours worked rose 2.7 percent from a year earlier, the biggest gain since August 2011, while wages are now growing faster than the average since the recession.
The report poses a dilemma for Bank of Canada Governor Stephen Poloz, who has indicated he’ll be cautious on raising interest rates. The gains, particularly faster wage growth, could be signaling even less capacity than thought only a few weeks ago. At the same time, the job gains could bolster his belief that more workers could be drawn into the labor force, allowing the economy to grow longer without fueling inflation.
Employment for youth -- an area that Poloz has given particular emphasis -- increased by 17,500 with the participation rate for that group up by 1 percentage point to 63.7 percent.
A separate trade report Friday was more in line with the current trend of weakening data, as exports continued falling and deficits surpassed C$3 billion for a fourth month. Exports were down 7.9 percent in the third quarter, the biggest quarterly decrease since 2009.
“Overall, while the trade data exposes a weak angle of the Canadian economy, the Labour Force Survey report points to continued gradual tightening in the labor market and supports our call for a more hawkish stance,” TD Securities said in a note.
Other Details
- The unemployment rate increased to 6.3% from 6.2% -- which was the lowest since 2008 -- as more people entered the labor force.
- The participation rate increased to 65.7%
- Goods-producing industries were behind the gain in October, generating 33.9k jobs versus 1.4k jobs in services
- All the new jobs were in the private sector
— With assistance by Erik Hertzberg
NEW US-FED NOMINATION
Bank of Canada. November 3, 2017. Statement on the Nomination of a New Federal Reserve Chair
Ottawa, Ontario - The Bank of Canada congratulates Jerome Powell on his nomination as the new Chair of the Board of Governors of the Federal Reserve System. The Bank has worked with Mr. Powell in his capacity as a member of the Federal Reserve Board and we look forward to continuing the close working relationship enjoyed by our two institutions.
The Bank has been honoured to work with Chair Janet Yellen. We are grateful for her many years of service to the Board, and her consistent demonstration of leadership, integrity and collaboration among the international policy-making community.
The Globe and Mail. 3 Nov 2017. Trump picks Jerome Powell as new Fed chairman. Powell: Fed pick does not embrace plans for significant reductions in regulation
BINYAMIN APPELBAUM
ANA SWANSON
President Donald Trump nominated Jerome H. Powell to chair the Federal Reserve on Thursday afternoon, bypassing Janet L. Yellen for a second term but turning to a replacement who is expected to stay the course on monetary policy if the economy continues its steady growth.
“He’s strong, he’s committed, he’s smart,” Mr. Trump said in the Rose Garden, where he introduced Mr. Powell as his choice. Using Mr. Powell’s nickname, the president said, “Based on his record, I am confident that Jay has the wisdom and leadership to guide our economy through any challenges that our great economy will face.”
Less certain is where Mr. Powell would lead the Fed if the economy falters. Mr. Powell, a member of the Fed’s board of governors since 2012, has consistently voted with Ms. Yellen, and colleagues consider him a centrist and pragmatist. But his tenure as a central banker has been relatively brief, and he has expressed skepticism in the past about the unconventional measures that the Fed has taken in the wake of the severe recession of 2008 and 2009. Mr. Powell could also depart from the Fed’s current trajectory when it comes to regulating banks and other financial institutions — rules Mr. Trump has said should be loosened.
Mr. Powell is a Republican with deep roots in the party’s establishment and in the financial industry, a lawyer by training and investment banker by trade.
As chairman, a position some consider as the second most powerful post in government, he will be the voice of an institution that is charged with keeping the economy on track by adjusting interest rates that influence the decisions of millions of Americans.
In replacing Ms. Yellen, Mr. Trump is breaking with precedent. The previous three Fed chairman were reappointed, in each case by a president of the opposite political party.
Mr. Trump said that he respected Ms. Yellen and on Wednesday called her “excellent.” The Fed under her leadership has sharply reduced unemployment while maintaining control of inflation, coming as close to achieving its congressional mandate as at any time in its history. But Mr. Trump and his advisers wanted to pick their own Fed chairman.
The position requires Senate confirmation, but Mr. Powell is likely to attract broad support from the Republican majority. He won some Democratic votes when he was confirmed as a Fed governor in 2012, and when he was confirmed again in 2014.
Most expect Mr. Powell to maintain the slow but steady approach that Ms. Yellen has taken in raising rates and unwinding the portfolio of assets that the Fed purchased to boost the economy after the 2008 financial crisis. Mr. Powell remains a centrist voice in the Fed’s internal debates, arguing for the Fed to end its stimulus campaign at a slow and steady pace. Over the last year, that has placed him solidly among the majority led by Ms. Yellen.
“Our view is Powell is the GOP version of Yellen, with the added kicker of wanting to reduce regulation,” said Tom Porcelli, chief U.S. economist at RBC Capital Markets. He said Mr. Powell was “the easy choice if you want to maintain continuity.”
But some argue that there is more uncertainty surrounding Powell’s approach than for other recent Fed chairs. Lewis Alexander, chief U.S. economist at Nomura Securities, said it is unclear how aggressive Powell would be in responding to an economic slowdown.
“I don’t think it’s right to think of Powell as a Yellen clone,” Mr. Alexander said. “In terms of the core issues of monetary policy, we just don’t have much of a baseline for him.”
Mr. Powell would also be the first Fed chair in four decades who does not have a degree in economics — meaning he lacks a body of academic work that analysts can parse for his views.
Ms. Yellen’s work on the labour market and former Fed chair Ben Bernanke’s focus on financial crises both gave insight into their leadership at the Fed, said Sarah Binder, a political scientist at George Washington University. But beyond Mr. Powell’s performance as a “loyal lieutenant” to Mr. Bernanke and Ms. Yellen, “we don’t know all that much about any existing priors Powell has about monetary policy,” she said.
As a member of the Fed’s board of governors, Mr. Powell also raised concerns that the Fed was trying too hard to revive economic growth with its massive bond-buying program — calling into question whether he would be as willing as Mr. Bernanke and Ms. Yellen to use such tools again.
The Fed announced in September, 2012, that it would launch a third round of bond buying, purchasing $85-billion a month in Treasuries and mortgage-backed securities until economic conditions improved to its satisfaction. The program was backed by Mr. Bernanke, then Fed chair, and Ms. Yellen, then the vice chairwoman, who argued the Fed had not done enough to reduce unemployment.
A group of three Fed governors, including Mr. Powell, pressed Mr. Bernanke to clarify the Fed’s goals, establishing what Mr. Powell called an “off-ramp” for the program. Jeremy Stein, the Harvard economist who was a governor at the time, described his concerns in public speeches, but Mr. Powell characteristically worked behind the scenes, raising his concerns with Mr. Bernanke in private conversations.
Mr. Bernanke responded by announcing a wind-down plan in May, 2013, but fear of a premature retreat caused a “taper tantrum” in financial markets. The Fed ended up continuing the purchases for longer than it had expected.
A survey of 144 investors conducted by Evercore ISI found investors expected that Mr. Powell would push rates modestly higher over time compared to Ms. Yellen.
Coming appointments could also complicate Mr. Powell’s task of forging consensus at the Fed. The president has three more open seats on the board of governors, and may have a fourth if Ms. Yellen decides to step down from her position on the board as she departs as chair. Mr. Trump may decide to appoint John Taylor, a Stanford economist who is among the Fed’s most vocal critics, and who was a top choice for Fed chief along with Mr. Powell.
Mr. Powell may also diverge from his predecessor on financial regulation. In a June appearance before the Senate Banking Committee, Mr. Powell made clear that he did not fully embrace the Trump administration’s plans for significant reductions in regulation, released a few weeks earlier, but said that the Fed’s current rules showed opportunities for improvement.
“I see it is a mixed bag,” he said. “There are some ideas in the report that make sense, maybe not as expressed there, but it would enable us to reduce the cost of regulation without affecting safety and soundness.”
But, he continued, “There are some ideas that I would not support.”
He could face significant internal pressure, however. Mr. Trump already has chosen Randal K. Quarles, the Fed’s vice-chairman of supervision, to lead the push against regulation. The two men were colleagues at the Carlyle Group.
Mr. Powell has expressed support for legislation that would require financial regulators to apply costbenefit analysis to proposed rules. But he pushed back against proposals to allow large banks to borrow more of their funding, saying that requiring large banks to raise capital from investors had strengthened the financial system.
“I happen to think we’ve gotten it about right,” he said.
Mr. Powell, 64, is a Washington native. He studied politics at Princeton University, then earned a law degree from Georgetown University and embarked on a career in investment banking at Dillon Read and Co.
In 1990, he returned to Washington to work for Treasury Secretary Nicholas Brady. Mr. Powell was named undersecretary for finance. When Salomon Bros. was caught in an attempt to manipulate the market in Treasuries, Powell spent a long August weekend making phone calls from Cape Cod, Mass., arranging for the company’s top managers to resign and for Warren Buffett, a major investor, to become chairman of the company’s board.
Under pressure to account for the shortcomings in regulation that had allowed Salomon’s misconduct, Mr. Powell told Congress, “There is no question that it can be improved, and improve it we will.”
Mr. Powell joined the private equity firm Carlyle Group in 1997. Over the next eight years, he solidified his fortune. His 2016 financial disclosure form showed a net worth of as much as $55-million. In 2005, Mr. Powell left the firm to focus on public policy as a scholar at the Bipartisan Policy Center. He attracted the attention of the Obama administration in 2011, when he worked behind the scenes to convince Congressional Republicans to raise the debt ceiling. The following year, president Barack Obama nominated Powell to the Fed alongside Mr. Stein, a Democrat. The package deal was meant to attract bipartisan support, and both men were quickly confirmed.
In an interview, Mr. Stein described Mr. Powell as “a determinedly not dogmatic guy.” “He completely checks any kind of ideology at the door,” he said.
CUSTOMERS
Financial Consumer Agency of Canada. November 2, 2017. FCAC revamps tools to help consumers find the best account and credit card for their needs
Ottawa, ON - Today, the Financial Consumer Agency of Canada (FCAC) launched its new and improved Account and Credit Card Comparison Tools. FCAC has redesigned the tools to help consumers decide which product best meets their needs. These tools will make it easier for consumers to compare different bank accounts and credit cards. FCAC has also ensured the tools are easily accessible on all devices as Canadians increasingly use tablets and smart phones.
In keeping with this year’s Financial Literacy Month theme, “Take charge of your finances – It pays to know”, the tools allow consumers to quickly review their needs, shop around in an unbiased environment and choose a banking package or credit card that best suits their needs.
Quotes
“In a competitive financial marketplace, FCAC’s revamped Account and Credit Card Comparison Tools will help consumers navigate and compare the various products available to them. Empowering consumers to make informed decisions plays a key role in consumer protection by helping ensure consumers get the products they need based on the options and features they want.”
Lucie Tedesco, Commissioner, Financial Consumer Agency of Canada
“Financial Literacy Month is underway and I want to encourage Canadians to take charge of their finances. The variety and complexity of available financial products is increasing. Each product has different options and features to choose from. FCAC’s revamped Account and Credit Card Comparison Tools will help consumers shop around, compare features and make informed decisions about the products that best suit their needs.”
Jane Rooney, Financial Literacy Leader, Financial Consumer Agency of Canada
Quick Facts
- FCAC’s Account Comparison Tool includes 171 chequing accounts and 84 savings accounts from different banks and credit unions.
- FCAC’s Credit Card Comparison Tool includes 145 credit cards from different banks and credit unions.
- Consumers can use the tools to compare the cost and features of different accounts and credit cards.
- FCAC continually ensures Canada’s financial institutions keep their information up to date and accurate for consumers.
- FCAC’s comparison tools are unbiased and are not intended to promote or endorse a particular product.
FULL DOCUMENT: https://www.canada.ca/en/financial-consumer-agency/news/2017/11/fcac_revamps_toolstohelpconsumersfindthebestaccountandcreditcard.html
CORRUPTION
TCS. 02/October/2017. Canada Repeals Facilitation Payments Exception
It is now illegal for Canadians to make what’s known as facilitation payments to foreign public officials in other countries to expedite bureaucratic processes to obtain necessary permits and other services.
Enacted in 1999, Canada’s Corruption of Foreign Public Act makes it illegal to bribe foreign public officials—both in Canada and in other countries. However, facilitation payments made to expedite what could otherwise be slow bureaucratic processes which could hinder business or other endeavours, were an exception. On October 31, 2017, Canada repealed the exception made for facilitation payments under the Act. Like other forms of bribery, facilitation payments are now illegal.
Facilitation payments are a concept known in Italian as spintarella, or “pulling strings.” In the Middle East, they are baksheesh. In Greek, they’re fakelaki, or a “little envelope.” In Kiswahili, kitu kidogo refers to this concept as “something small.” In Latin America, it’s a request for algo para el refresco, “something for a beverage” and in Chinese, they’re chaqian, which means “tea money.”
Canadians who have conducted business or lived in a country where corruption is common have likely had to deal with government employees expecting handouts. Facilitation payments, sometimes known as “grease payments,” are small payments made to government officials to get them to perform routine tasks within the scope of their duties. Paying money “under the table” to expedite processes for things such as obtaining a driver’s licence or a work permit for an employee, for example, is common in some countries.
“Some companies justify paying kitu kidogo because they know that their competitors are doing it, and by declining to pay, they are putting themselves at a disadvantage,” says Ryan Ward, a trade commissioner with the Canadian Trade Commissioner Service (TCS) in Nairobi, Kenya.
In 2009, the Organisation for Economic Co-operation and Development (OECD) recommended that member countries criminalize facilitation payments and strongly discouraged the use of facilitation on the basis that such payments have a corrosive effect on the rule of law, and hinder sustainable economic growth, says Daniel Whalen, a lawyer with Global Affairs Canada (GAC)’s criminal, security and diplomatic law division.
“Canada delayed the implementation of this change in order to give companies time to adjust their internal practices and procedures,” Whalen says, adding the exception was slated for removal at a future date (to be set by an Order in Council) by An Act to amend the Corruption of Foreign Public Officials Act (Fighting Foreign Corruption Act) in 2013. “This change to Canadian law highlights Canada’s commitment to combating corruption and bribery.”
With this change in the law, Canadian companies doing business abroad should ensure all of their employees and representatives are fully aware that even small facilitation payments are illegal and could lead to criminal charges in Canada. Preparing staff for the challenge of corruption can help ensure a company’s survival, says Brooke Grantham, a trade commissioner based with GAC in Ottawa.
“Companies hit by corruption scandals end up with sullied reputations and lose future business opportunities,” Grantham says. “They can then spend millions to clean up the mess and try to fix their reputations.”
From his vantage point in East Africa, Ward sees a refusal to pay as being a competitive advantage for Canada in the region. “We are known for our honest and clean approach, standing in contrast to those who will go to any length to win a contract,” he says. “Many countries are aggressively working to rein-in corrupt practices, and Canada is an increasingly sought-after partner in this pursuit.”
Experts recommend companies establish an anti-corruption compliance program which should include clear policies and procedures to prevent corruption as well as comprehensive training for management and staff, Grantham says.
FULL DOCUMENTS: http://tradecommissioner.gc.ca/canadexport/0002067.aspx?lang=eng
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