These are stories Report on Business is following Friday, April 5, 2013.
Loonie sinks on bleak numbers
The Canadian dollar plunged today, before recovering some ground, as the country's jobs boom came to a shuddering halt and a report on trade added to the economic gloom.
"It's all bleak," chief currency strategist Camilla Sutton of Bank of Nova Scotia said of the loonie, as the dollar is known in Canada.
The dollar closed at 98.39 cents U.S., compared to yesterday's close of 98.74 cents, but at some points during the day was down by more than three-quarters of a penny.
The currency was reacting to a raft of poor economic indicators, including the loss of 54,500 jobs in Canada in March, a fatter February trade deficit of $1-billion and weaker-than-expected job creation in the United States.
"The Canadian report was particularly weak, and broad-based weak, and below even the lowest expectation on the Street," Ms. Sutton said.
Investors, she added, are concerned about the outlook for the Canadian economy, and today's numbers fed into that.
As The Globe and Mail's Tavia Grant reports, the unemployment rate climbed in March to 7.2 per cent from 7 per cent in February. It's expected to remain above 7 per cent into next year.
All of the jobs lost were full time.
Among the unnerving statistics: Canada’s private sector cut 85,000 jobs, while the ranks of the self-employed swelled by 39,000. The public sector was little changed. Every province lost work, with the exception of Nova Scotia. The jobless rate rose from 7 per cent in February.
Today’s numbers end a string of relatively upbeat reports on the labour market from Statistics Canada.
The number of jobs created in the past year now numbers 203,000, an increase of 1.2 per cent, largely full-time work. Total hours worked are also up by 1.2 per cent.
Private-sector employment is now up by 111,000, or 1 per cent, while self-employment is up by 2.1 per cent, largely because of last month.
Employment in the public sector hasn’t changed by much.
Economists had been saying that the recent gains in the labour market were outpacing those of the general economy.
"The job declines were led by a 24,000 dive in manufacturing, and a 24,000 drop in public administration," said chief economist Avery Shenfeld of CIBC World Markets.
"Both of these sectors are now down significantly from a year ago. Self-employed jobs were up, so actual paid positions dropped 93,000. Add it all up, and Canada’s good news jobs story was erased in a single month, with employment, up 1.2 per cent year-on-year, now making much more sense relative to GDP."
Still, the labour market is expected to continue plodding along from here on in.
"Job losses are not expected to continue in the coming months as a modest pace of Canadian economic growth should support average monthly job gains in the range of 10,000 to 12,000 per month and keep the unemployment rate steady at 7.2 per cent over the remainder of the year," said economist Diana Petramala of Toronto-Dominion Bank.
Today's U.S. labour report also disappointed markets, as the number of jobs created in March fell far shy of what was expected, at just 88,000. The U.S. jobless rate, though, dipped to 7.6 per cent, but that was because people gave up looking for work as confidence in the outlook eroded.
"We would be remiss not to mention the continued decline in the participation rate," said senior economist James Marple of Toronto-Dominion Bank.
"This is perhaps even more disconcerting than the slowdown in job growth for what it says about the ability of an improving economy to bring workers back to the labour market," he said in a research note.
"Part of the reduction in participation is related to demographic factors, but the extent of the decline goes well beyond that as an explanation. We have not given up hope that this will turn around in the months ahead, but central bankers should take note: if the participation rate does not turn around, it signals a permanent loss of productive potential and an economy operating closer to its potential than is widely thought."
- Canada loses 54,500 jobs in March, jobless rate climbs
- Weak U.S. job gains cast shadow on economic outlook
- David Parkinson's Economy Lab: Should we be surprised by huge drop in jobs?
- Kevin Carmichael's Economy Lab: U.S. jobs report doesn't necessarily signal spring swoon
Trade deficit widens
The jobs report wasn't the only piece of disappointing news today.
Statistics Canada also reported that the country's trade deficit widened in February to $1-billion from $746-million in January.
That's the result of exports falling by 0.6 per cent and imports climbing 0.1 per cent.
On the export side, goods shipped to the United States fell by 1.1 per cent, while those to other country's increased by 0.9 per cent.
- Trade deficit rises as exports dip, imports advance
- Barrie McKenna's Economy Lab: Canada's faltering trade performance isn't good - or new
One fish two fish red fish dead fish: How to test for oil sands pollution
This week I learned all about how to test for oil sands pollution: Take a handful of rainbow trout, put them in test water, and see if more than half of them die.
Seem odd that you use live fish to see whether there will be dead fish? I think the idea is that you (potentially) sacrifice the few to save the many.
I was surprised, though those in the know wouldn’t be, because I wasn’t familiar with how officials test for the impact of a spill on aquatic life. But it’s worth sharing.
First, the background.
As The Globe and Mail’s Kelly Cryderman reported, an estimated 350,000 litres of waste water leaked into the Athabasca River from a pipe at the Suncor Inc. oil sands base plant site in late March.
This was industrial waste water, not an oil spill.
However, it came amid the raging debate over pipelines and the environment.
This waste water, which leaked over a period of some 10 hours, upstream from Fort MacKay and other points, held trace amounts of oil, grease, ammonia and some other stuff.
Suncor said this week that its tests show a “negligible impact” on the water.
Which got me interested in how the water is tested.
These bioassay tests are fairly standard, and, along with other tests, are routine for various and sundry approvals. These are designed to find out what impact a spill is having on a body of water and its aquatic life.
The standard is to use fingerling rainbow trout, put a few in the water for up to 96 hours, and see if any die. And how many.
If more than half of them die, it’s deemed a “rainbow trout bioassay failure,” as Alberta’s environment department put it in a recent enforcement order in the oil sands, unrelated to the recent spill.
Legalese says that at least 50 per cent of all the rainbow trout in the test must “survive the acute lethality testing at 100 per cent wastewater concentration.”
And, as this recent order demanded, a monitoring plan at the site in question had to include “necropsy of representative fish severely affected or killed during an acute bioassay test failure, including gill and liver morphologies and tissue histopathologies of those fish.”
(Memo to Ontario’s environment ministry: Should my Toronto neighbourhood ever be overcome by noxious fumes, I’d very much like not to be considered a fingerling rainbow trout.)
- Waste-water leak did not affect fish in Athabasca River: Suncor
- Alberta tests Athabasca River to gauge Suncor site leak’s toxicity
- CP oil spill in northern Ontario larger than first reported
- Alberta faces high hurdles with ambitious carbon reduction plan
- David Parkinson in ROB Insight (for subscribers): Does key to Keystone lie in Alberta move to curb emissions?
Streetwise (for subscribers)
- Canada's faltering trade performance isn't good - or new
- Should we be surprised by huge drop in jobs?
- U.S. jobs report doesn't necessarily signal spring swoon
ROB Insight (for subscribers)
- Are damning reports on pre-crisis banks useful, or a sideshow?
- Does key to Keystone lie in Alberta move to curb emissions?