These are stories Report on Business is following Thursday, April 18, 2013.
Flaherty fires back
Jim Flaherty’s team is in a public spat with a newspaper columnist who notes today that the Finance Minister hasn’t been in the Commons since his budget last month.
He went on a trade mission a day after the budget, then there was the Easter break, and he hasn’t been back in his seat since Parliament reconvened a few days ago, writes The Toronto Star’s Chantel Hébert.
Oh, and he hasn’t tweeted anything since the budget on March 21.
While he’s been gone, Ms. Hébert says, the opposition has been attacking the government on issues important to his portfolio, such as a tiff over tariffs and an issue over Royal Bank of Canada’s “importation of foreign workers to take over Canadian-held jobs.”
(Actually, the issue is the importation of foreign workers by a separate company to which RBC outsourced the work.)
Mr. Flaherty’s communications chief, Dan Miles, responded via a letter to the editor he also posted on the Finance Minister’s website.
He complained that Ms. Hébert questioned “the political currency of the sixth-longest-serving Finance Minister in Canadian history, the senior statesman of the G7 and G8 and one of the architects of Canada’s recovery from the worst recession since the Great Depression.”
(Actually, where Canada is concerned, this recession wasn’t as bad as the last recession or the one before that, in the drop in output and spike in unemployment.)
He noted that Mr. Flaherty left after the budget to speak in Vancouver, Hong Kong, Thailand and Bermuda to sell the budget and help spur on investment in Canada.
Then he met with his Indian counterpart, went to a bunch of other meetings and briefings, then spoke to international investors in Calgary. Today, he’s in Washington along with other finance ministers.
“If anything, I would suggest Minister Flaherty’s currency is appreciating in value each and every day, here in Canada and internationally,” said Mr. Miles, referring to the headline suggesting his “currency appears to be losing value.”
Late-breaking earnings reports
Google Inc. posted a jump in first-quarter profit to $3.35-billion (U.S.) or $9.94 a share from $2.89-billion or $8.75 a year earlier. Revenue jumped 31 per cent to $13.97-billion. “We are working hard and investing in our products that aim to improve billions of people's lives all around the world,” said chief executive officer Larry Page.
Microsoft Corp.’s third-quarter profit rose to $6.05-billion or 72 cents a share from $5.11-billion or 60 cents, diluted, a year earlier, while revenue climbed to $20.5-billion from $17.4-billion. It also announced that chief financial officer Peter Klein plans to leave. “While there is still work to do, we are optimistic that the bets we’ve made on Windows devices position us well for the long-term,” said CEO Steve Ballmer.
- Google posts quarterly revenue of $14.-billion
- Microsoft profit rises, CFO to leave
- IBM misses estimates as profit hit by weak yen
Apple dips again
Shares of Apple Inc. dipped below $400 (U.S.) again today, closing shy of the mark and down by more than 2.5 per cent..
Today’s decline followed a drop of 5.5 per cent yesterday, spurred by concerns as the tech giant prepares to report quarter results next week.
In fact, The Financial Times reports, analysts believe Apple could mark its first annual dip in profit.
The drop was sparked by a weak first-quarter outlook from audio chip supplier Cirrus Logic, whose own stock plunged by almost 16 per cent yesterday.
The softer outlook now has investors fretting over what that could mean for Apple, whose chips are used in iPhones and iPads.
Carney on energy
Bank of Canada Governor Mark Carney grazed the edges of the hot political debate over the Keystone XL pipeline, telling an audience in Washington today that the “uncertainty around infrastructure” is starting to slow investment in Canada’s energy industry, The Globe and Mail's Kevin Carmichael reports.
Mr. Carney’s remarks were prompted by a question about Keystone, which has become a flashpoint for a heated rhetorical clash in the United States over greenhouse gas emissions, continental energy independence and jobs. President Barack Obama last year delayed the TransCanada Corp. project, and now is weighing anew whether to allow the pipeline to proceed along a redrawn route.
Canada’s central bank chief prefaced his carefully worded remarks by saying that nothing he said should be construed as a comment on any particular comment. Still, his remarks are sure to attract attention, as they establish what’s at stake for Canada, and undermine an argument favoured by Keystone’s opponents.
- 'Uncertainty around infrastructure' hurting energy investment: Carney
- Oliver: Rail won't be enough to carry oil and gas
- Corporate Canada's 'dead money' is back to life, Carney says
Toyota expands Lexus production
Toyota Motor Corp. is expanding North American production of its luxury Lexus vehicles beyond Canada to a plant in Kentucky, The Globe and Mail's Greg Keenan reports.
A Toyota plant in Georgetown, Ky., will begin production of the Lexus ES350 sedan in 2015, according to industry sources.
The auto maker’s Toyota Motor Manufacturing Canada Inc. plant in Cambridge, Ont., already makes the Lexus RX350 crossover and was the first plant outside Japan to manufacture vehicles for the Lexus brand.
The project will be assisted by a $146.5-million (U.S.) incentive package from the state government, the Kentucky Economic Development Finance Authority said in a report on the project.
A day at the mall
What is it that keeps drawing Canadians across the border to shop?
So much so that the central banks of both Canada and the United States noted it yesterday.
For one, the Canadian dollar is strong, close to parity with the U.S. currency and forecast to stay in that area. Added to that are new duty-free rules in Canada.
Plus, many things are cheaper in the United States, there are bargains galore, the consumer experience is often different, the malls and shops are easy to get to, and it can be fun to head across the border with friends or family to spend the day shopping in cities like Buffalo, N.Y., or Bellingham, Wash.
Cross-border shopping is on the rise, according to the latest data.
Indeed, same-day car trips by Canadians to the United States, a good measure for how we’re shopping south of the border, rose 0.7 per cent in February to 2.79 million, marking the fourth monthly increase in a row, Statistics Canada said today. In January, such trips had jumped by 1.5 per cent to mark the highest level since February, 2012.
Just yesterday, the Federal Reserve noted in its Beige Book of regional economic conditions that mall sales in upstate New York were “brisk” in March, up from a year earlier, and that “some of the recent strength is attributed to Canadian shoppers.”
The Bank of Canada, in its monetary policy report yesterday, also cited the “increase in cross-border shopping, stimulated by the persistent strength in the Canadian dollar and the rise in travelers’ duty-free exemptions for short stays implemented in June 2012.”
This, the central bank said, is among several reasons for tame inflation.
On the other side of that, the Bank of Canada cited the “expansion of big-box stores in Canada and the arrival of large U.S. retailers,” along with an increase in shopping online.
The central bank didn’t name Target Corp. for feeding into the “competitive pressures” on Canadian shops to hold down prices, but it was obviously one of the retailers in question, given it only just opened up here.
The Target effect is interesting, as The Globe and Mail’s Marina Strauss reports, and we’ll get a sense of that tomorrow when Statistics Canada reports inflation data for March.
Economists expect the agency to report that the annual inflation rate dipped to 1.1 per cent from 1.2 per cent in February as, among other things, “Target’s expansion could have spurred discounting,” said senior economist Robert Kavcic of BMO Nesbitt Burns.
Note, too, that the last reading of inflation showed prices for clothes and shoes well down in February from a year earlier.
(On a side note, today's Statistics Canada report also shows visitors to Canada from Asia on the rise. Indeed, the 29,400 trips from China to Canada in February was a record. Visitors from China have doubled on a yearly basis from almost 150,000 in 2006 to almost 300,000 last year.)
Where everybody knows your name, but not your relationship
Great line today from The Associated Press: “In Iceland, a country with a population of 320,000 where most everyone is distantly related, inadvertently kissing cousins is a real risk.”
Which is why there’s an app for that.
Streetwise (for subscribers)
- In wealth management, being global pays
- Poseidon Concepts dropped from TSX
- Exempt market pushes for looser rules
- Corporate Canada's 'dead money' is back to life, Carney says
- Canada is a hit with Chinese tourists, as Americans stay home
- Mark Carney gets a bad grade on forecasting
ROB Insight (for subscribers)
- Ontario to crack down on debt-settlement agencies
- Rob Carrick: A former homeowner, now a renter: one year later and still loving it
- A tax tune-up: How to get in gear on car-related deductions
- Rob Carrick on money: The great cupcake crash of 2013
- Diamond era ends at Barclays with Ricci exit
- Morgan Stanley posts $958-million profit as wealth management grows
- Nokia sales tumble despite strong Lumia pick-up
- U.S. becomes Japan's largest export market
- Germany rejects quota for women board directors
- Sharp-eyed student takes on famed economists over basic errors - and wins
- U.S. jobless claims edge higher but underlying numbers still sound