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These are stories Report on Business is following Thursday, Nov. 7, 2013.

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Organized labour hit
CIBC economists raise an interesting point today: Union bargaining power may be weakening not just because of economic uncertainty, but also because Canadian workers now "compete" with the so-called right-to-work states just across the border.

The report by economists Avery Shenfeld and Emanuella Enenajor is actually about unemployment and inflation, but that one line got me digging through statistics.

Those statistics show organized labour being hit in this post-crisis era as its representation in the work force wanes and contract gains are modest.

According to Employment and Social Development Canada, the number of workers covered by collective agreements rose through 2011, the latest year for which numbers are available, to almost 4.7 million people.

That gain of about 37,600, however, meant that the "coverage rate" for workers outside of the agriculture sector dipped by January of 2012 to 29.9 per cent from 30.2 per cent a year earlier.

Important here is that it marked the first time below the 30-per-cent mark since 1965.

(Government figures differ from those of Statistics Canada, which pegs the percentage at 31.6.)

Notable, too, is that wage hikes in collective agreements sank to a 14-month low of 1.7 per cent last year, well down from 3.3 per cent in 2007 and the slowest pace since 1998.

Still, that 1.7 per cent slightly topped inflation of 1.6 per cent.

"Challenging economic conditions in 2012 influenced the climate of negotiations and consequently affected collective bargaining outcomes and the magnitude of wage increases in particular," the government said in its latest report, in May.

"Public-sector wage restraint and a fragile economic recovery were key factors in the continuing trend toward wage moderation in 2012 major settlements," it added.

According to the most recent data, pay hikes averaged 1.5 per cent in the major contracts reached in August of this year, down from 2.3 per cent in the previous labour pacts among the same groups, though still better than the rate of inflation.

There's another interesting element here: Those August contracts will, on average, run for 48 months, the longest since December of 2011.

All of this comes against the backdrop of right-to-work legislation in the United States, which, generally, allows workers to opt out of paying union dues, leaving organized labour weaker.

There are now more than 20 right-to-work states, including, recently, Michigan, which had been a bastion of organized labour and sits just across the border.

The CIBC report released today looked at the issue of full employment, and how that has changed, and why there's plenty of room for the jobless rate to ease without a spike in inflation, meaning the Bank of Canada can hold off on an interest rate hike.

"Declining unionization coverage could also be a modest factor, reducing worker bargaining power, particularly as Canadian workers now compete with 'right to work' states south of the border," said Mr. Shenfeld and Ms. Enanajor.

"That could reduce the wage inflation pace at any given level of unemployment."

ECB in surprise rate cut
The European Central Bank took an aggressive stance against the threat of deflation today, cutting its benchmark rate to a record low of 0.25 per cent from 0.5 per cent.

As our European correspondent Eric Reguly reports, the central bank's move follows a decline in the annual inflation rate in the 17-nation euro zone to a four-year low of 0.7 per cent.

While inflation is the central bank's primary target, unemployment is at record, and in some cases crippling levels, in some areas of the monetary union, while economic growth forecasts have been trimmed.

"Clearly the ECB see deflation as a very real threat and October's drop as not being a one-off figure," said Craig Erlam of Alpari in London, though policy makers don't see deflation actually happening.

"The central bank has been very reluctant in the past to cut interest rates, so this reaction now begs the question, did they leave it too long to cut rates on this occasion? And, is deflation a real threat for the euro zone?"

U.S. economy in better-than-expected shape
U.S. economic growth was surprisingly strong in the third quarter, leaving open the possibility that the Federal Reserve could slow its monthly purchases of assets before the end of the year, The Globe and Mail's Kevin Carmichael reports.

Gross domestic product expanded at an annual rate of 2.8 per cent, faster than the 2.5-per-cent pace set of the second quarter and much better than Wall Street's consensus estimate of 2 per cent, according to the numbers released today.

The Fed surprised financial market participants in September by opting against beginning the long process of rolling back its bond purchases.

The policy, called quantitative easing, sees the central bank create $85-billion (U.S.) a month to keep downward pressure on interest rates by purchasing Treasury debt and mortgage-backed securities. The Fed said in September 2012 that it would leave its third QE program unchanged until it detects substantial improvement in the labour market. Stronger growth will be essential to bringing about that shift.

Twitter surges
Twitter Inc. had quite the long-awaited debut on the New York Stock Exchange today, its shares surging at the open to $45.10 (U.S.), a gain of almost 75 per cent from the initial public offering price of $26.

As The Globe and Mail's Steve Ladurantaye reports, Twitter executives decided against tradition and watched from the floor as actor Patrick Stewart rang the opening bell to mark one of the most widely-watched debuts since Facebook Inc. stumbled in the spring of last year.

The shares were at $46.96 by about midday.

BCE profit slips
BCE posted a drop in third-quarter profit today on a charge related to its takeover of Astral Media Inc.

As The Globe and Mail's Rita Trichur reports, BCE's profit fell to $343-million or 44 cents a share from $527-million or 68 cents a year earlier.

Adjusted profit rose to $584-million or 75 cents from $546-million or 70 cents, while operating revenue rose to $5.1-billion.

"With an outlook for continued strong wireless profitability, an improving wireline financial profile and a significant contribution from Astral to our Bell Media results, we are on track with our 2013 financial plan and reconfirm today all our Bell and BCE guidance targets for the year," said chief financial officer Siim Vanaselja.

Manulife profit climbs
Buoyed by its wealth management operations and investments, Manulife Financial Corp. came in today with a third-quarter profit that topped $1-billion.

That profit of 54 cents a share marks a rebound from a loss of $211-million or 13 cents a year earlier, which included a hefty charge, The Globe and Mail's Jacqueline Nelson reports.

Manulife's core earnings climbed to $704-million or 36 cents from $570-million or 29 cents.

"As we predicted last quarter, a number of items with unusual timing reversed themselves this quarter, contributing to the increase in net income," said chief executive officer Donald Guloien.

"Investment performance also made a very significant contribution. Our core earnings give an indication of the underlying earnings capacity of the business going forward."

Canadian Natural Resources hikes dividend
Canadian Natural Resources Ltd. boosted its quarterly dividend by 60 per cent today as it unveiled a marked gain in third-quarter profit amid record oil production.

The dividend goes to 20 cents a share.

The Calgary-based company posted a jump in profit to $1.17-billion or $1.07 a share from $360-million or 33 cents a year earlier.

Quarterly production hit a record of about 703,000 barrels of oil equivalent a day, while benefitting from the tighter spread between western Canadian crude and global prices.

Quebecor posts loss
Quebecor Inc. sank to a third-quarter loss amid restructuring efforts, the company saying today that's "positioning itself to pursue its growth, business development and profitability targets."

As The Globe and Mail's Bertrand Marotte reports, the Canadian media and telecommunications company lost $167.8-million or $1.36 a share in the quarter, compared to a profit of $17.1-million or 14 cents a year earlier.

The loss included a big non-cash hit.

On an adjusted basis, Quebecor posted a profit of $63.7-million or 51 cents a share, compared to $49.5-million or 39 cents a year earlier.

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