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Pay hikes: Go west or east, young man, but not Ontario Add to ...

These are stories Report on Business is following Thursday, Jan. 26, 2012. Get the top business stories through the day on BlackBerry or iPhone by bookmarking our mobile-friendly webpage.

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Where the money is, and isn't As Sal Guatieri of BMO Nesbitt Burns puts it, wage pressures are restrained in Canada, but "not across Canada."

A look at a new report from Statistics Canada shows what the BMO economist calls "glaring" differences in pay throughout the country.

Overall, average weekly earnings were up 2.2 per cent in November from a year earlier, reflecting both wage gains and growth in employment. What's notable is the regional disparity in both growth and levels.

In Newfoundland and Labrador, average weekly pay increased 5.7 per cent over that period, to $898.95, Statistics Canada said, adding the province has topped the national average since September of last year.

In Saskatchewan, pay rose 5.1 per cent to $904.42. And in Alberta, weekly earnings climbed 5 per cent to the country's highest level, $1,052,53.

Increases also eclipsed the national average in New Brunswick and British Columbia, though to a lesser extent at 4.6 per cent and 3.2 per cent, respectively. Other provinces were below the national average, with Ontario lagging at the bottom, with an increase of just 0.5 per cent to $898.63.

As for the three at the top of the charts, Mr. Guatieri said, "Strong in-migration from other provinces should relieve some of the labour market pressure in these three regions."

Boomers deep in debt People over the age of 45 and already-heavy borrowers are driving virtually all of the increase in Canada's household debt load, a new study finds.

The report today by CIBC economists Avery Shenfeld and Benjamin Tal finds that the most heavily-indebted are responsible for all of the rise in debt since 2007, and those who should be saving for retirement and building assets are moving fastest into a financial hole, The Globe and Mail's Tavia Grant reports.

“While a crisis does not appear imminent, there are cracks emerging in the financial foundation of Canadians that are likely to impair spending growth ahead,” says the report.

After the Fed One of the takeaways from the Federal Reserve yesterday was the gloomy outlook for the labour market.

As The Globe and Mail's Kevin Carmichael writes in today's Report on Business, the overall message from the U.S. central bank is that the perkier economic indicators of late don't suggest Ben Bernanke and his colleagues have faith that the jobless rate is coming down markedly anytime soon.

Indeed, unemployment is now forecast at 8.2 per cent to 8.5 per cent for 2012, 7.4 per cent to 8.1 per cent next year, and 6.7 per cent to 7.6 per cent in 2014.

"The fact that the range for the unemployment rate at the end of 2014 is projected to be 6.7 per cent to 7.6 per cent, still about 1.5 percentage points above the long-run level, explains why they are so sanguine about any near-term inflation risks tied to easy monetary policy," said Mark Chandler and Ian Pollick of RBC Dominion Securities.

"Moreover, the reluctance to provide a specific unemployment rate target also suggests a degree of discomfort with the number of people that have dropped out of the labour force. Note that the employment/population ratio – at 58.5 per cent – is still some 1.6 standard deviations below its average since 1980. The upshot is we need both unemployment rate surprises and employment surprises to push the Fed off its planned course."

CP productivity declines Canadian Pacific Railway Ltd. posted a 19-per-cent jump in fourth-quarter profit today, but a key indicator of productivity worsened, The Globe and Mail's Brent Jang reports.

CP earned $221-million or $1.30 a share, diluted, up from $186-million or $1.09 a year earlier.

Calgary-based CP’s operating ratio, which measures costs as a percentage of revenue, rose to 81.3 per cent last year, up from 77.6 per cent in 2010. A lower number is better, but CP’s operating ratio is the worst among North America’s Big Six railways.

Canadian National Railway Co. has the industry's best operating cost-to-sales ratio, lowering it slightly to 63.5 per cent in 2011, compared with 63.6 per cent in 2010.

CP has been under pressure from U.S. hedge fund Pershing Square Capital Management LP to stage a turnaround. New York-based Pershing CEO Bill Ackman is waging a proxy fight to replace CP CEO Fred Green with Hunter Harrison, CN’s former CEO.

Potash falls short Just a day after doubling its dividend, Potash Corp. of Saskatchewan fell short of expectations with its fourth-quarter results today, though with a stronger profit.

The giant potash producer earned $683-million (U.S.) or 78 cents a share in the quarter, compared to $508-million or 56 cents a year earlier. Revenue inched up to $1.87-billion from $1.81-billion.

Potash Corp. also forecast first-quarter earnings per share of 55 cents to 75 cents, which would fall short of the year-earlier period, and a full-year profit of $3.40 to $4 a share.

Chief executive officer Bill Doyle cited the uncertain climate, but was upbeat nonetheless.

"The drag of global economic concerns shook the confidence of fertilizer buyers and caused a greater decline in fourth-quarter demand than we had anticipated," he said in a statement. "However, we believe these short-term challenges do not change the more powerful drivers of our business. The return on fertilizer investment continues to be attractive to farmers worldwide and is expected to result in greater demand in the quarters ahead."

Yesterday, the company hiked its quarterly dividend to 14 cents a share from 7 cents.

The Apple effect Earnings today from Nintendo and Nokia Corp. underscore the impact of Apple Inc. in the market.

It's not just Apple, but the Android system from Google Inc. , as well, but let's focus on the iPhone and iPad maker for now.

Nintendo warned of a widening loss in its current fiscal year. True, it's fighting a strong yen, as are other Japanese companies, but sales of game consoles are being being eroded as players opt for games on mobile devices.

Nokia, in turn, posted its third quarterly loss in a row, and hefty drop in sales, though it's seeing a better-than-expected takeup on its new Windows handsets.

Indeed, a report today by Strategy Analytics in Boston underscores the globe shift to tablets, saying shipments reached a record high of 26.8 million in the fourth quarter, up by 150 per cent from a year earlier. For all of 2011, sales surged 260 per cent, it said.

The group's executive director Neil Mawston, noted, too, the impact of Apple and Google's Android. The Apple operating system actually slipped in the fourth quarter in terms of market share, but still strong at 58 per cent, while Android came on strong, climing to 39 per cent from 29 per cent a year earlier.

Sympathy for the PM? Mick Jagger has pulled out of an event at the World Economic Forum in Davos, saying he was being used as a "political football" by the government of British Prime Minister David Cameron.

The Rolling Stones rock star was to have joined other celebrities at a tea party - yes, a tea party - to help promote Britain at the forum.

But today, he put out a statement that there have been inaccurate reports, which prompted him to skip the gathering.

"During my career I have always eschewed party politics and came to Davos as a guest, as I thought it would be stimulating," said Mr. Jagger, who studied at the London School of Economics.

"I have always been interested in economics and world events. I now find myself being used as a political football and there has been a lot of comment about my political allegiances which are inaccurate."

One official told The Telegraph that the government is disappointed, describing the event as non-political and saying there was never a suggestion that Mr. Jagger is a Conservative. Well, yes, there's really little doubt about that.

Rating, target revisions RBC Dominion Securities today downgraded BCE Inc. to "sector perform from outperform," while holding its price target on the stock at $43. Analyst Drew McReynolds: "We continue to view BCE as a core holding that should continue to benefit from investor demand for yield and capital preservation. Nevertheless, we see rising valuation risk in the name should the improvement in leading economic indicators and associated increase in risk appetite be sustained."

RBC analyst Mike Abramsky boosted his price target on shares of Apple Inc. to $600 (U.S.) from $525, holding his rating at "outperform"after the tech giant's extraordinary earnings report this week: "Strong Q1 results offer an early vote of confidence for CEO Tim Cook and team, and the strong guidance shows continued momentum from product cycles and expanding markets."

RBC analyst Walter Spracklin trimmed his price target on shares of Canadian National Railway Co. to $84 (Canadian) from $85, holding his rating at "sector perform" after this weeks results.

CanaccordGenuity analyst Jeff Rath boosted his target on shares of Netflix Inc. after its earnings yesterday, to $66 (U.S.) from $57, and held his "sell" on the stock. He cited better domestic streaming but said he continues to believe Netflix "faces numerous challenges, including subscriber losses, rising content costs and an increasingly competitive landscape."

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