These are stories Report on Business is following Wednesday, Oct. 11, 2012.
Well, you asked for it
I can only imagine the number of Canadians rubbing their hands in glee today over a request from the country's telecom regular for their input on a national code for wireless carriers.
Sort of like being asked to take part in a 360 review of your boss, depending on your boss.
As The Globe and Mail's Rita Trichur reports, the Canadian Radio-Television and Telecommunications Commission announced today it's going to draw up new rules, and is asking the public for input into a code that will set standards for mobile services, like smartphones, tablets and the like.
“In the past, Canadians have told us that contracts are confusing, and that terms and conditions can vary greatly from one company to another," said CRTC chairman Jean-Pierre Blais.
"We are asking them to assist us in developing a code that will help them better understand their rights as consumers and the responsibilities of wireless companies."
So I polled my colleagues and family to see what we'd like to see. I doubt all of this is what the CRTC has in mind - you can read the notice of consultation here - but here goes:
Me: Stop dinging me at every turn. That's dinging, not ringing.
Colleague: Bigger data cap.
Colleague: Stop sending spam text.
Family member: "Phone upgrades more often, a larger (geographical) network and unlimited Twitter!"
Colleague: "Make my bill in language I can understand. What the heck is a 'Govt' Regulatory Recovery Fee'?"
Colleague: Faster service.
Family member: "The free phone you offer upon signing should be an iPhone, not a piece of junk that breaks in a few weeks."
Colleague: "When I call to complain, don't try to sell me something. And don't put me on hold for 20 minutes"
Colleague: Don't put me on hold in order to transfer me to a section of the company that's closed on the weekend.
Twitter follower: “NO cheesy hold music either!!”
Me: Don't come to my door. I'll call you if I want you.
Colleague: Don't sell me a phone that doesn't get reception in my apartment.
Family member: "A promise to do away with the Wild West holsters - fashion no-no."
Colleague: Don't offer me a good deal on a monthly plan only as I threaten to leave.
Colleague: When my plane lands in another country, text me a friendly reminder "that using this phone while abroad will cost you $5-million per second."
My wife (to me, not the CRTC): No reciting of weekend activities while in the produce section. No stopping at the top of an escalator to text.
Softbank in talks for Sprint
Shares of Sprint Nextel Corp. surged today as America’s third-biggest telecom confirmed it could soon be snapped up by Japan’s Softbank Corp.
News organizations such as the Wall Street Journal and Reuters report that Softbank is in talks for a majority stake in Spring that could be worth almost $13-billion (U.S.), which prompted the U.S. carrier to disclose the discussions about a "potential substantial investment" by the Japanese company.
"Although there can be no assurances that these discussions will result in any transaction or on what terms any transaction may occur, such a transaction could involve a change of control of Sprint," it said.
Reports in Japan suggest an acquisition would give Softbank the ability to get mobile gadgets at lower prices.
Canada extends review
The Canadian government has extended its deadline for reviewing CNOOC Ltd.’s $15.1-billion acquisition of Calgary’s Nexen Inc., but notes that such delays are not unusual, The Globe and Mail’s Shawn McCarthy reports.
“The proposed transaction is undergoing a rigorous review under the Investment Canada Act,” Industry Minister Christian Paradis said in a statement today.
The government recently imposed a similar delay in reviewing the proposed $5.3-billion takeover by the Malayasian state oil company, Petronas, of Progress Energy Resources Corp.
Should Ottawa help fund pipeline?
Bank of Nova Scotia’s Derek Holt thinks the former Bank of Canada governor makes a lot of sense in calling for the government to help spur a west-to-east oil pipeline.
As The Globe and Mail’s Bill Curry reports, David Dodge said late yesterday that the federal government should wade in with incentives like loan guarantees, tax breaks or public-private partnerships.
That would help the economies of the eastern provinces, said Mr. Dodge, now an adviser to Bennett Jones LLP.
Mr. Holt agrees that the government should back off its “hands-off approach to fragmented domestic energy markets.”
The Scotiabank economist noted the “large gap” in prices of oil projects across Canada, citing east coast exporters getting Brent prices at about $115 (U.S.) a barrel, while others bring in the West Texas Intermediate price of $92.
Western Canadian production, he noted, was fetching its benchmark of $77 this morning.
“This massive $38-a-barrel gap between the selling prices of eastern versus western Canadian projects is a foregone opportunity to regional producers that are left to sell their product at a discount, and also penalizes some regions of the country by way of reduced government royalties in the west and higher energy prices elsewhere than may otherwise be the case, although this also speaks to refinery shortfalls,” Mr. Holt said.
“There are many bottlenecks in all directions, but the east-west infrastructure deficiency is a contributing factor and I’m not sure that a small wave toward rail car shipments is an ideal long-term solution notwithstanding some of its potential to alleviate some of the near-term price discrepancies.”
Citing the controversy over the Keystone and Northern Gateway projects, he argued that “public leadership” is needed.
“Speak of Canada’s commodity riches all you want, but the inability to get product to market for the best price handicaps the country’s ability to cash in on what I also believe to be the still early stages of a long-run commodity super-cycle as consumers across developing regions of the world economy become ‘westernized’ for better or for worse on net,” Mr. Holt said.
- Ottawa should help stabilize imbalanced national economy: Ex-Bank of Canada chief
- The oil patch opens an eastern front
- Enbridge grilled on leak detection ability at Gateway hearings
Canadians back oil sands
A majority of Canadians support oil sands development so long as continuous efforts are made to limit its environmental impact, says a new poll commissioned by a conservative think tank.
When presented with a list of oil industry arguments for the environmentally friendly aspects of oil sands production, 71 per cent of people surveyed in an online poll said “significant” efforts have been made to limit oil-sands’ environmental impact, according to Léger Marketing, The Globe and Mail's Bertrand Marotte reports.
Trade deficit narrows
Canada’s trade deficit narrowed to $1.3-billion in August, shrinking from July’s record $2.5-billion as a drop in imports outpaced a marginal decline in exports.
Imports to Canada slipped 3.1 per cent, Statistics Canada said today, while exports dipped just 0.1 per cent on higher volumes, though generally lower prices.
“The largest decline occurred in exports of industrial goods and materials, while exports of energy products increased after six consecutive months,” the agency said.
In trade with Canada’s biggest trading partner, exports to the United States climbed 1.4 per cent, while American imports dipped 4.3 per cent, boosting Canada’s surplus to $3.5-billion from $2-billion.
Exports to Japan were hit, though, falling almost 20 per cent, helping to push over all exports to countries other than the U.S. down by almost 4 per cent.
“Canada’s trade performance continues to suffer amid a global economic slowdown and a high Canadian dollar,” said economist Francis Fong of Toronto-Dominion Bank.
“After a slow recovery which almost saw exports read their pre-recession peak, they have now fallen by more than 12 per cent since December.”
The 'race to the bottom'
London’s CMC Markets cuts to the chase in a report that says the U.S. dollar is winning “the race to the bottom,” pushing investors into stocks and gold.
It all has to do with the stimulative asset-buying measures launched by the Federal Reserve – the latest has been dubbed QE3 to mark the third round of quantitative easing – that are aimed at juicing the U.S. recovery but at the same time weigh on the U.S. dollar.
Britain’s pound and the euro have all gained ground against the greenback, but those gains have been “much more modest” compared to the Canadian, Australian and New Zealand currencies, David Land, head of analysis at CMC Markets, said he a recent report.
“The ‘race to the bottom’ for currencies is being won by the USD,” Mr. Land said, referring to the U.S. dollar by its symbol.
“Quantitative easing packages have the world expecting long term weakness in USD and are looking to park money in equity markets and gold.”
Countries such as Japan, Sweden and Switzerland are all complaining about the impact of the strength of their currencies, and, noted senior currency strategist Camilla Sutton of Bank of Nova Scotia, the world is moving into another round of currency tensions.
"For the first time in four sessions, traders are adding risk into portfolios," Ms. Sutton said today.
"There has not been a single catalyst, however central bank policy remains the key focus ... with the Fed defending QE, Japan and Switzerland defending their stance on strong currencies, all helping to revive undertones of currency wars."
The U.S. dollar, of course, has moved up and down depending on the risk appetite of the world’s investors, and there’s plenty more of that ahead.
As Michael Gregory and Benjamin Reitzes of BMO Nesbitt Burns noted, the greenback reached a 22-month high in the last couple of weeks of July, but reversed course and slipped more than 5 per cent to a 10-month trough by mid-September.
“It was a surprise to see the trade-weighted unit appreciate in the wake of the Fed’s announcement,” they said.
“However, the dollar resumed its downtrend through early October,” they added in a report this week.
“Looking ahead, the risk landscape remains dotted with the euro area crisis, China’s slowdown, crude oil geopolitics and the U.S. ‘fiscal cliff’ (all good for the greenback). And, the Fed is expected to expand QE3 to start the year (bad for the dollar).”
Taken together, they said, it all adds up to a “flat profile” for the U.S. currency absent a fiscal blowup this winter. That would mean a short-lived spike in the dollar, though they expect to see a “credible” deficit plan, which would move the trend down again.
By the second half of next year, though, the U.S. currency should be on the rise again.
- Japan's stimulus sharpens risk of global currency clash
- U.S. bank loves Canadian dollar: 'Who doesn't? That's the problem'
- Canadian dollar too 'popular' as traders home in
Flaherty warns of euro woes
Canada’s finance minister warns today of “black boxes” in the financial system of a troubled Europe, though he did give a nod in a TV interview to the progress on the region’s debt crisis over the past year.
“Some of the European banks are in relatively good shape but there are some which are in need of recapitalization,” Mr. Flaherty told Bloomberg Television after he and his G7 colleagues met in Tokyo.
“We know there is some weakness in some banks but we don’t have much more information than that. There are some black boxes they need to open.”
A good source of …
I know in my heart that I shouldn’t poke fun at a consumer recall, but since no one has been hurt by the potential contamination of Kellogg Co.'s Frosted Mini-Wheats cereal in the United States, I can’t resist.
Kellogg's is recalling almost 3 million boxes of the stuff due to potential contamination via metal mesh bits, which the company blamed on the manufacturing process, adding that strong performance by other brands will “offset substantially” the $20-million (U.S.) to $30-million in in costs associated with the limited recall. It still expects annual earnings per share of between $3.18 and $3.30.
Anyway, here’s what the company’s website says of the product:
“Full of morning must-haves, each serving of Mini-Wheats is a good source of 10 essential vitamins and minerals and contains whole grain fiber to help keep you full and focused all morning. Other choices may do little more than leave a heavy feeling in your stomach.”
- Tavia Grant's Economy Lab: Slow, steady growth but no recession, new indicator predicts
- U.S. jobless claims fall to lowest in 4-1/2 years
- Greek unemployment scales new high
- Greece's biggest company quits for company quits for Switzerland
- Global slowdown, lagging recovery triggers 10th straight rate cut for Brazil
- Marc Lavoie and Mario Seccareccia in Economy Lab: Bank of Canada needs to chill on inflation