The highs, lows and in-betweens of 2013.
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Top story: How BlackBerry lost World War Z
BlackBerry Ltd. started 2013 on such a promising note, and may well have ended it that way, too, though only time will tell. The in-between, however, was trying, to say the least. As the year began, chief executive officer Thorsten Heins was preparing to launch the new BlackBerry10 line, including the consumer-oriented Z10. By the time 2013 was winding down, after restructuring, a pullback from the consumer market, heavy losses, layoffs and a failed attempt to sell the company, new CEO John Chen vowed that "we're ready to fight back," with a plan to focus on software and services, and pump up its already hugely popular BBM chat operation. By late December, BlackBerry shares were down by more than 39 per cent from a year earlier.
Terms of endearment
Some words that came to the fore in 2013:
1. Selfie. Why take a picture of your mom and dad, or a travelling companion, at Stonehenge when you can take a picture of yourself at Stonehenge? Why have someone else take your picture when you can do it yourself. Endlessly. (Some trivia: The Atlantic recently published a selfie by Anastasia, shot with a Kodak brownie into a mirror.)
2. Binge-watching. Why enjoy The Good Wife throughout the year when you can do it all in one night?
3. Bitcoin. If 50 Cent were a bitcoin, he'd be aptly named, after the year it's had.
4. Taper. Enough already.
5. Abenomics. Rip up the game plan, get a new team, and hope for the best.
Top story: Easy money
Just the mere thought of The Taper haunted the markets for months, investors driving down stocks with every utterance from a Federal Reserve official and every economic reading that might suggest the central bank was headed that way. When it finally came in late December, though, markets surged. The Fed's decision to begin reducing, or tapering, its bond-buying stimulus program by $10-billion (U.S.) a month was, as our Washington correspondent Kevin Carmichael noted, the "beginning of a long and perilous journey back to a more normal policy setting." This came in a key year for the Fed, whose chairman Ben Bernanke is leaving the helm of the world's most powerful central bank, to be replaced by Janet Yellen, who becomes the first woman in the role.
Marketing slogans that rang true
1. Mayor Rob Ford's friends: Try it, you'll like it.
2. Barrick co-chairman John Thornton: Because you're worth it.
3. Mark Carney: I Am Canadian.
4. Amazon.com's delivery drone: Fly the American way.
5. Lululemon's see-through pants: When you've got it, flaunt it.
6. The oil sands: Good to the last drop.
7. Rob Ford: Reach out and touch someone. (Or just barrel into her.)
8. BlackBerry's new CEO John Chen: I'm lovin' it. (If I had the chance to earn $90-million, I'd be lovin' it, too.)
9. Fort McMurray: The happiest place on Earth. (It may be Neil Young's Hiroshima, but at $186,782 it boasts Canada's highest median family income).
Top story: Golden slumbers
It was a daunting year for Canada's Barrick Gold Corp., culminating in the planned exit of founder and chairman Peter Munk and some directors. The world's biggest gold company bowed to pressure from those seeking change, bringing in new independent directors, while Mr. Munk will quit after the annual meeting in the spring, to be replaced by co-chairman John Thornton. This comes amid a plunging gold price. Barrick also posted billions in writedowns this year, suspended work on its huge Pascua-Lama project and sold some $3-billion (U.S.) in a stock sale. Barrick shares slipped almost 50 per cent by late December from a year earlier. Also, be sure to read Mr. Munk's frank interview with The Globe and Mail's Rachelle Younglai.
Songs that rang true
1. The Steve Miller Band on Senator Mike Duffy: Go on, take the money and run
2. BlackBerry's Thorsten Heins via James Blunt: Did I disappoint you, or let you down?
3. The Rolling Stones on Germany's Chancellor Merkel: Angie, Angie, when will those clouds all disappear?
4. Bank of Canada Governor Stephen Poloz via Keith Carradine: Take my hand and pull me down / I won't put up any fight / Because I'm easy
5. Mindy Smith on Jim Flaherty's parting words to Mark Carney: Oh, please don't go / Let me have you just one moment more
6. Mayor Rob Ford via Miley Cyrus: I came in like a wrecking ball
7. Garth Drabinsky via Bob Dylan: Any day now / Any day now / I shall be released
8. GM's Mary Barra, the first woman to lead a U.S. auto maker, via Meat Loaf: I can see paradise by the dashboard light
9. Carrie Underwood on Lance Armstrong: Maybe next time he'll think before he cheats
10. Peter Munk via The Beatles: I don't want to spoil the party so I'll go
Top story: Houses are built to live in (or speculate on)
Bank of Canada Governor Stephen Poloz isn't worried about a housing bubble, but a lot of other people are. Canada's housing market rebounded smartly this year after the government-induced slowdown of 2012, when Finance Minister Jim Flaherty moved to head off any meltdown. The OECD and some other observers believe the Canadian market is among the most overvalued in the world, Deutsche Bank going so far as to warn it tops the list, overvalued by 60 per cent. According to the latest readings, as The Globe and Mail's Tara Perkins writes, the housing market is expected to end the year stronger than the last, in contrast to what economists had projected earlier. That's at least partly because some home buyers moved up their timeline, fearing higher mortgage rates, which should help cap the market. Says Scotiabank economist Adrienne Warren: "The risks to the Canadian housing market appear fairly balanced. Cautious business hiring, muted wage growth, high household debt levels and affordability pressures could lead to a sharper slowdown in housing activity in 2014. At the same time, gradually improving global growth, still-attractive borrowing costs and population growth in key demographic segments are supportive of housing demand."
Required Reading
Some must-reads from Report on Business in 2013:
- The untold story of how Canada survived the financial crisis
- Our Time to Lead: The Wealth Paradox
- Board Games 2013: The best and worst governed companies in Canada
- Executive compensation: Compare top CEOs' pay and performance
- High-priced homes with no mail delivery: 13 things that make Canadians unique
Top story: The buck stops here (Or, what 94 cents will buy you)
The loonie certainly went from hero to zero over the course of the year. Money was flowing into Canadian assets and the currency was riding high, and then it all changed, the loonie sinking to the 94-cent area, with predictions of more erosion to come. Most notable was Goldman Sachs Group Inc.'s call for an 88-cent dollar and its recommendation to short it. Toronto-Dominion Bank is close, projecting 88.5 cents by the end of 2015. And by late December, the net short position was $6.2-billion, climbing ever closer to the mid-April record of $7.4-billion, according to the latest report from the U.S. Commodities Futures Trading Commission. Said TD economists Craig Alexander, Derek Burleton and Leslie Preston: "Further depreciation in the Canadian dollar does create winners and losers, but it will help inflation move back towards the Bank of Canada's target, and can help Canada's exporters regain some of their lost competitiveness."
Top story: A long and winding road
This is one anniversary TransCanada Corp. isn't celebrating. Mid-September marked the fifth anniversary of the Canadian company's first application for U.S. approval of the controversial Keystone XL pipeline, which it has been forced to reroute and is again awaiting the go-ahead to carry Alberta oil to America's Gulf Coast. The fierce battle over Keystone highlights the environmental concerns over Canada's oil patch, and it's being waged on several fronts. Indeed, according to figures compiled by Bloomberg, almost $16-million was spent on Keystone-related advertising during the 2012 election, with more this year. Indeed, Tom Steyer, founder of the Farallon hedge fund, has become a one-man force against the pipeline. Said Scotiabank's Patricia Mohr, one of Canada's leading commodities analysts, though in reference to a different pipeline: "The oil and gas industry is key to Canada's economic prosperity, generating almost one-quarter of Canada's merchandise trade exports in 2012."
Going out in style: Royal Bank of Canada chief Gordon Nixon announced his decision to step down. Here's what Streetwise columnist Boyd Erman had to say: "In 10 years, it may be hard to say exactly what Mr. Nixon's tenure was all about, except for the fact that earnings more than tripled."
Going out with style: Christine Day announced her decision to leave as chief of Lululemon Athletica Inc. with little fuss, saying simply that "now is the right to time to bring in a CEO who will drive the next phase of Lululemon's development and growth.
Going out of style: Canada Post.
Top story: Rational or irrational?
As Bank of Montreal's Robert Kavcic put it, the "sky was the limit" this year for stock investors, who were buoyed by central bank policies and projections for better economic growth. This, of course, led to questions about whether the markets were getting ahead of themselves, based on corporate earnings and economic fundamentals. Not so fast, Bay Street: While U.S. and overseas markets powered to huge gains, Toronto stocks lagged their counterparts. Said the senior economist: "In fact, Canadian stocks were the real dog among developed-world indices this year, up less than 8 per cent versus gains of more than 30 per cent in the U.S., 23 per cent in Germany, more than 10 per cent in France and the U.K., and a whopping 53 per cent in Japan. For Canadian investors, quite possibly the trade of the year was buying U.S. stocks in U.S. dollars - that would have yielded a gain of nearly 40 per cent versus the comparatively paltry domestic returns."