These are stories Report on Business is following Friday, Feb. 27, 2015.
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Tame growth seen
A new forecast suggests Canada is in for two years of just moderate economic growth amid the oil shock.
Bank of Nova Scotia projects the economy will eke out average growth of 1.9 per cent this year and 2 per cent in 2016, lagging countries such as the United States, Britain and Mexico, but faring much better than the big European economies.
The forecasts released late yesterday, however, show a widening gap between economic growth in Canada and the United States.
And where the Canadian provinces are concerned, of course, there's a complete change of fortunes.
Alberta, the heart of the energy sector and Canada's economic leader of late, is projected to see growth of just 0.6 per cent this year and 1.6 per cent in 2016.
Ontario, a laggard of late, will lead the nation with growth of 2.7 per cent and 2.4 per cent.
And the jobless rate in Alberta will spike to 5 per cent this year before easing just slightly to 4.9 per cent, according to the forecast.
"I think it's moderate growth," deputy chief economist Aron Gampel said of the overall projection for Canada, adding that the global economy should start to "regain traction" amid exceptional stimulus from central banks.
We just haven't seen that yet.
"A sharp retrenchment in energy-related investment should be partially offset by strengthening non-energy exports, with manufacturers benefiting from U.S. demand and a more competitive currency," Scotiabank said.
"Meanwhile, lacklustre employment and wage gains are expected to restrain retail and housing activity, particularly in oil-producing regions."
Unemployment, Scotiabank projected, will remain elevated at 6.7 per cent for the next two years, though down from 2014's 6.9 per cent, even as the economy churns out 140,000 jobs in each of 2015 and 2016.
The bank hasn't changed its base forecasts for gross domestic product in Canada and the U.S., but the report comes amid gathering gloom for Canada's oil-producing regions.
Indeed, Bank of Canada Governor Stephen Poloz warned that "we are not in a position to engineer the perfect outcome."
Early next week, economists expect Statistics Canada to report that the economy expanded at an annual pace of about 2 per cent – possibly a shade above or below – in the fourth quarter of last year.
Today, the U.S. Commerce Department revised its earlier estimate of economic growth in the fourth quarter of last year down to an annual pace of 2.2 per cent, from its first reading of 2.6 per cent.
"Over all, while the economy ended the year with less momentum than in the summer and fall, average annual growth of 2.9 per cent in the past six quarters still denotes a meaningful upward shift from 2.1 per cent in the first four years of the recovery," senior economist Sal Guatieri of BMO Nesbitt Burns said of the U.S. economy.
"We look for 2.3-per-cent growth in Q1 and near 3-per-cent growth for the rest of the year, powered by more financially-fit consumers, but also supported by solid growth in business spending (outside the oil patch.)"
- Canada's depressing day: Alberta warns of woe, Poloz of 'setback'
- Barrie McKenna and David Parkinson: Poloz says January rate cut was the 'appropriate amount'
Germany approves extension
It turns out the Germans can say ja, after all.
The Bundestag today approved a four-month extension to Greece's bailout provisions despite the controversy.
Earlier this week, for example, the newspaper Bild, in a rather big one-word headline, had urged Parliament to say nein.
"We Germans should do everything to keep Europe together as far as we can and bring it together again and again," said German Finance Minister Wolfgang Schaeuble.
This came as the Hellenic Statistical Authority, or Elstat, reported that Greece's economy shrank by 0.4 per cent in the fourth quarter of last year.
Black banned
Conrad Black is defiant in the face of news he has been permanently banned from acting as a director or officer of a company that issues securities in Ontario, saying today he has no interest in holding such positions anyway, The Globe and Mail's Janet McFarland reports.
The Ontario Securities Commission released a decision saying Mr. Black and former Hollinger International Inc. colleague John Boultbee will be banned from acting as directors or officers because they must be prohibited "from directing or influencing" the management of a company.
Mr. Black responded quickly, saying the ruling "is at least welcome as the comparatively inoffensive end of more than 11 years of persecution," and adding he has no plans to seek a board seat anyway.
Tax scandal widens
The Queen's private banker has been caught up in a widening scandal over tax evasion.
Coutts & Co. in Switzerland, the wealth management arm of Royal Bank of Scotland, is the latest to be pulled into the saga.
HSBC, too, is caught up in the controversy.
RBS, which is majority-owned by the British government, says Coutts is now being probed by German officials.
"A prosecuting authority in Germany is undertaking an investigation into Coutts & Co. Ltd. in Switzerland, and current and former employees, for alleged aiding and abetting of tax evasion by certain Coutts & Co. Ltd. clients," RBS said yesterday in the notes of its annual results.
"Coutts & Co. Ltd. is co-operating with the authority."
RBS chief executive officer Ross McEwan told reporters that the bank will "come down incredibly hard" if it finds evidence of wrongdoing.
"This is what has tarnished the banking industry, and in my view private banks have taken far too long to catch up with the public's expectations," Mr. McEwan said, according to reports.
Coutts, which boasts billions in assets under management, and the Queen among its clients, is up for sale.
- Eric Reguly: USBC chief drawn into Swiss scandal, bank issues fresh apology
- Ian McGugan: HSBC scandal reveals extent of pressure to attract wealthy investors
- HSBC chiefs offer contrition for past mistakes
ROB Magazine
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