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The Week In Review

The image experts are right: Nine (twisted) reasons to love Toronto Add to ...

These are stories Report on Business followed this week.

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Why we love Toronto
As reputations go, Toronto is now No. 2. And those who populate it know why.

As The Globe and Mail’s Tu Thanh Ha reports, the Reputation Institute, a global consultancy, has released its 2013 report on cities around the world, which shows Toronto jumping into the Top 10.

And rather high at that, just behind Sydney and ahead of Stockholm, Vienna, Venice, Florence, Edinburgh, Zurich, London and Copenhagen.

(Bye bye, Vancouver, which ranked No. 1 last year and No. 10 in 2011.)

The global survey is based on living, working and investing in a city, and how it ranks as a place to visit.

Toronto ranked No. 1 for working, No. 2 for living, No. 5 for buying, and No. 7 for investing, but didn’t make the top ranks for tourism.

A city’s reputation is hugely important, the group says, because that helps attract tourists, boost exports, bring in top-notch talent and attract foreign investment.

The Reputation Institute report doesn’t say why Toronto holds these scores, but we all know the answers:

1. Our mayor is famous. Everywhere. And, yes, we do have live theatre, but why pay when you can get it for free? And it’s way more juicy.

2. We get to root for hockey’s underdogs. For 46 years.

3. We can always find a condo to buy.

4. We don’t need to pay for gym memberships. We get our daily workout by dodging falling window panes and chunks of concrete. And cyclists.

5. We don’t need down time. We get it by relaxing in our cars. Waiting for the traffic to get through the construction.

6. Our transit system is second to none. It’s the commuters who are second. Or third. Or fourth. As they wait to get on the subway.

7. We don’t foster public drunkenness. The bars close too early for that.

8. We’ve got money to throw around. Which is why we pay 10 per cent more than Americans.

9. Our landmark is a rather big phallic symbol. And it lights up at night.

Outside (the beltway) looking in
The markets appeared to know all along that the politicians in Washington would come to their senses. One wonders if the politicians knew it, given the 11th hour at which they struck a debt deal that would mean no possibility of default.

Of course, observers don't actually think they did come to their senses in the end, given that they have kicked one giant can down the road with an agreement that threatens another ugly scene like the one this week.

As The Globe and Mail's Kevin Carmichael reports, Washington's warriors ran awfully close to the deadline for raising the debt ceiling. This, amid a costly partial government shutdown.

The deal funds the government through to mid-January, and raises the debt limit until at least Feb. 7, which means we could be heading into Round Two right after the holiday season, though the two sides will be negotiating toward a longer-term budget.

By one estimate, the shutdown cost the United States $24-billion (U.S.) in lost economic output, while economists shaved their projections for growth.

Economists also lamented the hit to confidence in the United States, and to the credibility of its law makers.

"Given that we have seen the real negotiations have been pushed through to Jan. 15, where we will debate and try and avoid a new government shutdown (with potentially a new and probably more hardcore Speaker), which coincides with the sequester spending cuts that kick in on that same day," said Brenda Kelly of London-based IG.

"Then Feb. 7 for a new debt limit extension and boom we’re back to square one."

Observers are divided as to whether the Republicans, having licked their wounds, will return to the table chastened or in fighting mode.

Canada, EU strike trade deal
Canadian officials are hailing a framework trade agreement with the European Union that they bill as the biggest deal they've ever done.

Not yet final, it's known as the Comprehensive Economic and Trade Agreement, or CETA, which, as The Globe and Mail's Paul Waldie reports from Brussels, goes well beyond the measures of the North American Free Trade Agreements.

The deal calls for the elimination of thousands of levies, while promoting foreign investment and labour mobility. The final agreement is expected to take two years to ratify.

When complete, some 98 per cent of tariffs between the two countries will be wiped out, including those on agriculture. Others will be phased out over several years.

The Canadian government says the agreement should top projections of creating 80,000 jobs and adding $12-billion a year into the economy.

Prime Minister Stephen Harper agreed that the deal will harm some Canadians, but that the pros outweigh the cons. And those harmed could be compensated.

"There are some negative effects on a few sectors in the very short term," he said.

As The Globe and Mail's Barrie McKenna writes, Canadian businesses will now have to work hard to get all the benefits of the agreement.

BlackBerry draws potential suitors
The lineup for a peek at BlackBerry Ltd.'s books is growing.

As The Globe and Mail's Iain Marlow reports, China's Lenovo Group Ltd. has now signed a confidentiality agreement to look the Canadian company over.

There are many interested parties, including U.S. private equity firm Cerberus and, reportedly, Cisco Systems, Google and SAP.

So far, only Fairfax Financial Holdings Ltd. has signed a letter of intent, proposing a $4.7-billion (U.S.) that would pay BlackBerry stockholders $9 a share. Fairfax proposes leading a consortium to bid.

A deal involving Lenovo would, no doubt, mean scrutiny in Canada and the United States.

Housing market going strong
Here’s how David Rosenberg put it in a report this week: “Canadian real estate correction? Get Real.”

The chief economist at Gluskin Sheff + Associates was referring to the latest numbers from the Canadian Real Estate Association, which showed that sales across the country rose 0.8 per cent in September from August, and 18.2 per cent from a year earlier.

As The Globe and Mail’s Tara Perkins reports, rising mortgage rates are helping to drive the market, which has now seen sales gains for seven months in a row, though many observers expect it won’t stay this hot for much longer.

What’s clear, though, is that the impact of mortgage restrictions unveiled by the Canadian government in the summer of 2012 has faded as sales for the month came in just above their long-term average.

“Once again, for all the chatter about how the Canadian housing market is supposedly an accident waiting to happen, turnover activity in the residential real estate market expanded 0.8 per cent sequentially in September, taking the level some 18 per cent above where it was this same time in 2012,” Mr. Rosenberg said.

Credit Suisse, however, weighed in with the release of its global wealth report, citing the record high debt burden among Canadian families.

“Rapid growth in mortgages has fuelled a continuing rise in household debt,” the bank said in its annual study.

“Mortgage terms were tightened in 2012 and the market cooled somewhat, but there are continuing concerns. It is not clear whether the final landing will be hard or soft.”

The week in Business Briefing

The week in Streetwise (for subscribers)

Economy Lab

ROB Insight (for subscribers)

Required reading
The "investment grade" car market has been turbocharged over the past few years. Eric Reguly looks at the Ferraris, Mercedes, Jaguars, Bugattis, Aston Martins and McLarens.

Millions of users rely on BitTorrent technology but relatively few know much about the company behind the file-sharing platform. Omar El Akkad examines its success.

B.C. has stiffened its stance on ensuring it receives financial benefits from any new oil shipped through the province for global markets, Carrie Tait and Brent Jang report.

The rush to develop the Arctic's resources and open shipping lanes has given the Arctic council new importance, and countries are clamouring to join, Paul Waldie writes.

Air Canada is putting its cockpits on a diet, Greg Keenan reports, replacing those bulky pilot manuals with tablets starting next year.

 

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