These are stories Report on Business is following Tuesday, Dec. 10, 2013.
Governments slash jobs
Canadian governments are slashing jobs with notable speed, one of the reasons behind the weaker showing in the labour market.
“Restraint at all levels of government has hit this sector hard,” senior economist Benjamin Reitzes of BMO Nesbitt Burns said of the public administration category.
“With the federal government and most provinces still looking to balance the books, don’t expect a comeback anytime soon.”
His research today shows that public sector employment declined by a record 5.3 per cent in November from a year earlier. That’s almost 52,000 jobs.
Referring to Friday’s report from Statistics Canada on how the jobs market fared last month, Mr. Reitzes noted that overall employment rose by a “meagre” 1 per cent over the course of the 12 months. In fact, so far this year, employment is up by just 147,900 for the poorest showing since 2001, excluding the recession period.
“Not quite weak enough to argue for rate cuts, but this hardly the stuff of a firm underlying economy,” he said.
In November alone, the Canadian economy created about 22,000 jobs, and the unemployment rate held firm at 6.9 per cent for the third consecutive month.
Consider that job creation in Canada has averaged 13,400 a month this year, well down from last year’s 25,400.
“Note that total employment is up only 1 per cent year over year, but when you exclude public administration, that rises to 1.4 per cent: Better but still not great,” Mr. Reitzes said on the 12-month reading.
- Tavia Grant: Canadian employment growth continues – but soft spots remain
- Infographic: Unemployment rate stays at 6.9 per cent
- Tavia Grant: Canadian employers to continue hiring in coming quarter: Survey
GM taps Barra
GM has named its first woman chief executive officer.
Mary Barra, 51, now an executive vice-president, will replace Dan Akerson, 65, who announced today he’s stepping down in mid-January, speeding up his plans because of a family illness.
Ms. Barra has more than three decades worth of experience at the auto maker, which, remember, is born again after slipping into bankruptcy protection to be rescued by U.S. and Canadian governments.
“With an amazing portfolio of cars and trucks and the strongest financial performance in our recent history, this is an exciting time at today’s GM,” Ms. Barra said in a statement.
Kellogg deals blow to province
Kellogg Co. is shutting down a cereal operation in London, Ont., at the end of next year, yet another blow to the manufacturing sector in the Canadian province, The Globe and Mail's Eric Atkins reports.
Southern Ontario has seen plants close and workers laid off amid a stronger Canadian dollar, though one which has weakened of late, that have driven up costs.
The plant employs 509 unionized workers, who are members of the bakery, Confectionery, Tobaco Workers and Grain Millers local 154G.
Last month, HJ Heinz said it would close its factory in Leamington, Ont., putting about 740 people out of work.
Lululemon on the rise
Shares of Lululemon Athletica Inc. climbed today in the wake of the company’s change at the top.
As The Globe and Mail’s Marina Strauss reports, the yoga-wear retailer has named retailing veteran Laurent Potdevin as its next chief executive officer, while founder Chip Wilson quits his post as non-executive chairman.
Mr. Potdevin, late of TOMS Shoes, replaces Christine Day, who announced plans to retire from the post last summer. He’ll take over in the new year.
Mr. Wilson, in turn, will walk away from the chairman’s job before next summer’s annual meeting, to be replaced as chairman by Michael Casey, who’s now the board’s lead director.
Banks await Volcker Rule
The biggie today is the final version of the so-called Volcker Rule, which would bar banks in the United States from proprietary trading.
Among those scheduled to vote were the Commodity Futures Trading Commission, the Federal Reserve and the Federal Deposit Insurance Corp., which is similar to the Canadian Deposit Insurance Corp.
The CFTC cancelled its open meeting “due to the closure of all federal government agencies because of inclement weather in the Washington Metropolitan area,” it said on its website, but reports said a vote would still be held.
(That never would have happened in Canada.)
The Volcker Rule, named for former Fed chief Paul Volcker, was one piece of the Dodd-Frank Act aimed at stopping risky business on Wall Street after the financial crisis.
- Joanna Slater on the Volcker Rule: Banks have reason to be apprehensive
- Boyd Erman in Streetwise (for subscribers): RBC faces few options but to spin off U.S. trading unit
- Tim Kiladze: Five things you need to know about the Volcker Rule
Shares of BlackBerry Ltd. are plumbing depths not seen in a decade.
Stock of the troubled smartphone maker slipped again today, falling 1.9 per cent in early trading to $5.64 (U.S.).
These are levels that are the lowest in more than 10 years, or, adjusting for splits, since late September of 2003.
BlackBerry now has a new interim chief executive officer who’s bent on improving its fortunes, but it hasn’t done much for the stock.
Streetwise (for subscribers)
ROB Insight (for subscribers)