These are stories Report on Business is following Friday, Oct. 26, 2012.
Property tax hike coming for Toronto?
Toronto homeowners are staring at a property assessment hike of 5.5 per cent next year, but the folks behind this went to lengths today to point out that that’s well below the actual increase in home values in Canada’s biggest city.
I know, right? Thanks very much for that.
The average 5.5-per –cent hike in Toronto is part of what are now notices going out to more than 725,000 households in Ontario in a province-wide assessment update.
“An increase in assessment does not necessarily mean an increase in property taxes,” said the group responsible, Municipal Property Assessment Corp.
“If the assessed value of a home has increased by the same percentage as the average in the municipality, there might be no increase in the property taxes paid by property owners.”
Joe Regina, the group’s municipal relations account manager in its Toronto office, stressed that property values have jumped an average of 22.8 per cent since 2008, the year of the last update.
"Our values reflect the local real estate market and confirm that most homeowners in the area have seen an increase in the value of their property over the past four years," Mr. Regina said, which shouldn’t come as a surprise to anyone given the frothy nature of Toronto’s residential real estate market.
“Property owners should ask themselves if they could have sold their property for its assessed value on January 1, 2012. If the answer is yes, then their assessment is accurate,” he added in a statement. “If not, we are committed to working with them to get it right.”
The taxman is also committed to working with you to get it right.
U.S. economy grows 2 per cent
The U.S. economy forged ahead at an annual pace of 2 per cent in the third quarter, better than expected and something for President Barack Obama to crow about as he heads into the final days of the election campaign.
Helping to drive the economy was a housing market on the mend, though unemployment, while showing signs of improvement, remains elevated.
As The Globe and Mail's Kevin Carmichael reports, economic growth in America is still too slow to substantially ease the jobs crisis.
Still, the Wall Street Journal today cites an impressive statistic: The economy has now expanded for 13 quarters in a row, good news for the president ahead of the November election.
Consumers drove the gains, particularly in the area of big-ticket goods.
And the government itself helped pump up the economy via defence spending.
"In the end, what saved this figure from being much, much worse, was a somewhat freakish surge in government spending, driven by a 13-per-cent gain in national defence spending," said Rob Carnell of ING.
"Whilst such surges do occur from time to time, the background trend in government spending is at best flat, suggesting that this single item flattered the total by some 0.7 of a percentage point. Moreover, we would not be surprised to see some of this figure revised away in subsequent revisions, and also for the drags from inventories and net trade to increase."
Spain jobless level climbs
Europe’s troubles mounted today as the outlook for Spain grew dimmer amid stunningly and stubbornly high unemployment.
But, said senior currency strategist Camilla Sutton of Bank of Nova Scotia, the euro zone has made huge strides since the beginning of the year, such as planning for a common bank supervisor, though questions remain over what will drive economic growth in the 17-member monetary union.
“It’s a long-term path,” Ms. Sutton said. “Nothing’s going to happen overnight.”
The common currency sank today as several smaller issues came to the fore. There was no overriding factor, Ms. Sutton said.
The latest data showed Spain’s jobless rate climbing to 25.02 per cent in the third quarter as the wounded country lost 96,900 jobs.
Spain and Greece are struggling under agonizing economic conditions. Unemployment in Greece stands at more than 24 per cent, according to the latest statistics from Eurostat.
Markets are also still awaiting Madrid to seek a full-scale bailout.
Spain’s jobless rate now stands at its highest since the end of the Franco era in 1976, noted market analyst Chris Beauchamp of IG in London, and “given that significant parts of Madrid’s austerity package are yet to take effect this figure could easily get even worse, with all the possibilities for social unrest that come with it.”
All of this comes amid weakening economic conditions – and job cuts – across the region. Having said that, Britain yesterday reported that it bounced out of recession as its economy expanded by 1 per cent in the third quarter.
But consider that, on the same day, Ford Motor Co. unveiled plans to close to British plants, at a cost of 1,400 jobs, because of the downturn in Europe.
“The job losses highlight the problems faced by the U.K. economy and the effects of the problems going on in Europe as the continent strives to get on top of the sovereign debt crisis which is slowly suffocating the European economy,” said senior analyst Michael Hewson of CMC Markets in London.
“The problems being experienced by French car manufacturer Peugeot are another case in point as that company comes under pressure from the French government to hold back from the closure of some of its French operations, as it hemorrhages cash on a daily basis,” he said in a report today.
“Unfortunately due to the slowing European economy the demand for all these vehicles just isn’t there at the moment and judging by some of this week’s woeful economic data it would appear that the problems are getting worse, with even Germany’s economy feeling the effects of the economic slowdown after this week’s latest PMI manufacturing data, showed a much sharper contraction than markets had expected."
Royal Bank of Canada has joined the growing list of major global banks under pressure from U.S. prosecutors in a probe into alleged manipulation of one of the world’s key interest rates.
RBC was one of nine banks more recently served a subpoena by state prosecutors from New York and Connecticut related to their possible role in rigging Libor, or the London Interbank Offered Rate.
Gillian McArdle, a spokesperson for RBC, indicated that the bank believes its submissions were complete. “We have determined that our Libor submissions reflected our cost of funds,” she said.
New York Attorney-General Eric Schneiderman and Connecticut Attorney-General George Jepsen are investigating the banks to determine whether any conspired to manipulate the benchmark rate that is used to set more than $300-trillion of securities and loans. Over the course of the summer subpoenas that request communication with bank executives were sent out.
Carroll resigns as Anglo American CEO
Cynthia Carroll surprised shareholders today, resigning as chief executive officer of global mining giant Anglo American PLC, The Globe and Mail’s Eric Reguly reports.
Ms. Carroll, 55, was one of only the four women CEOs among FTSE-100 companies. She was the first woman to take the top job at Anglo when she joined the company in 2007, as well as the first non-South African and the first non-insider.
Ms. Carroll, an American who graduated from Skidmore College with a geology degree, worked for Alcan in Montreal from 1989 until she joined Anglo in March, 2007. Her last job at Alcan was head of its primary metals group, one of aluminium maker's top jobs.