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These are stories Report on Business is following  Wednesday, April 3, 2013.

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The pipeline cost
Canada stands to lose out on more than $50-billion over a three-year period because of oil pipeline constraints, one of the country's major banks projected today as it urged President Barack Obama to approve the controversial Keystone XL project.

That figure from CIBC World Markets represents lost opportunities, in terms of producer revenues and government royalties.

Economist Peter Buchanan forecasts that this "money left on the table" will be about $20-billion this year, $15.2-billion in 2014 and $16.5-billion a year later.

That assumes a certain spread between the price of Western Canadian oil to that of the U.S. benchmark, West Texas Intermediate, which has narrowed of late, and the spread of WTI to Brent crude.

Pipeline constraints are well documented, particularly as U.S. production ramps up, and they're costing Canadian oil companies and governments dearly.

"As opposed to earlier hopes for a 'quick fix' to bottlenecks, pipeline capacity will likely struggle for years to match aggressive supply growth on both sides of the Canada-U.S. border," Mr. Buchanan said.

The costs to Canada aren't "quite so crippling as last winter, but still equal to nearly 5 per cent of the GDP of Canada's two largest oil-producing provinces."

In a separate report, Mr. Buchanan's colleague, chief economist Avery Shenfeld, called for approval of the Keystone XL pipeline, which would transport bitumen to the Gulf Coast of Texas, and which is hugely controversial in the United States and has already been rejected once, forcing TransCanada Corp. to propose rerouting it.

"There will be a sigh of relief if President Obama is able to put aside mere symbolism and approve a project that will have no material bearing on global climate, particularly relative to what America could do if it took its own coal appetite seriously," Mr. Shenfeld said.

Mr. Shenfeld cited several issues for Canada's oil patch, including the dramatic increase in shale oil production in the United States and the "growing list" of oil-producing nations that remain open to foreigners.

Remember, Canada has slapped new restrictions on foreigners in the oil sands.

"The policy implication for Canada is that while Ottawa has imposed some new restraints on oil sands activity by foreign state-owned enterprise, other measures on the policy dial may have to move the other way," Mr. Shenfeld said.

"With more competition for investor dollars, deficit-fighting federal and provincial governments may have less room to manoeuvre in setting taxes and royalties than was earlier the case. Both pipelines and reasonable royalties will be critical to avoid killing the black-gold goose."

TD chief to retire
One of the deans of the Canadian banking industry is calling it quits, though not for more than a year.

Toronto-Dominion Bank announced today that chief executive officer Ed Clark will retire in November, 2014, at the age of 67, after 12 years in the post.

As The Globe and Mail's Grant Robertson reports, Mr. Clark was responsible for leading the country's second-biggest bank through a huge U.S. expansion.

TD also named Mr. Clark's successor, Bharat Masrani, now the chief of the bank's U.S. commercial banking unit.

Mr. Masrani is 56 and, for now, he will become chief operating officer until he takes over next year.

"We view positively the board of directors' choice of Mr. Masrani as successor because of his diverse background at the bank and his strong understanding of the U.S. market, which is central to TD's long-term growth strategy," said analyst Peter Routledge of National Bank.

"The overriding question now turns to what Mr. Masrani will do with the opportunity bequeathed to him by Mr. Clark," he added in a research note.

"On the conference call today, he hewed close to the party line, which prioritizes organic growth in the U.S. over acquisitions. But longer-term, TD will find itself in the middle ground in the U.S. The U.S. bank, as it is currently structured, remains outside of the bulge-bracket category populated by banks with national banking platforms (e.g., Wells Fargo, Bank of America, and JPMorgan).

"Nor does the bank fit into a niche category, as a small bank executing a profitable, defensible niche strategy. Rather, TD is in a middle realm of 15-20 super-regional banks whose present size may ultimately leave them competitively challenged in the U.S. marketplace."

Toronto, Vancouver home sales plunge
Home sales in Toronto plunged in March by 17 per cent from a year earlier, with the condo market really taking it on the chin.

As The Globe and Mail's Tara Perkins reports today, sales of existing homes in the Toronto area fell to 7,765 from 9,385, though the Toronto Real Estate Board noted that Good Friday fell in March this year, meaning one less day.

The average selling price rose 3.8 per cent to $519,879.

Sales of condos, the focus of the angst surrounding the Toronto market, fell 18 per cent, while the average price remained 1.7 per cent higher.

In Vancouver, The Globe and Mail's Brent Jang reports, sales fell 18 per cent to 2,347 from 2,874, and prices slipped 3.9 per cent to $593,100.

Debt-to-income ratio to rise
Credit growth may be slowing among Canadian households, but don't pop the champagne cork yet.

Actually, don't even buy the champagne. Get the cheaper stuff instead.

Because here's the bottom line: Yes, growth in consumer debt may have slowed to its slowest rate in more than a decade, but it's still outpacing income growth.

And that, BMO Nesbitt Burns warns, suggests the key ratio of household debt to disposable income is still going to climb from its record levels in the 165-per-cent range. Which means some consumers will remain highly vulnerable.

"Barring a negative economic shock – which would prompt deleveraging – the household debt ratio isn't likely to turn lower until income growth picks up meaningfully," senior economist Benjamin Reitzes said today.

Bank of Canada Governor Mark Carney and Finance Minister Jim Flaherty have been urging Canadians to cut back, and, by all accounts, they have been.

Consumer debt rose in February by 4.5 per cent from a year earlier, marking the slowest annual pace since mid-2001.

Breaking that down, mortgage debt rose 5.4 per cent to $1.16-trillion, for the slowest increase since November, 2001, while non-mortgage debt, like credit cards and personal loans, rose 2.5 per cent, market the smallest gain since July, 1993, according to Royal Bank of Canada.

"Expect this trend to continue, as households stay cautious amid elevated debt levels and modest economic growth," Mr. Reitzes said.

But, he added, "while household credit growth is slowing, it is still above income growth, pointing to a further increase in the debt-to-income ratio."

Charging by the pound
Samoa Air is taking a unique approach to airline fares: Pay by the pound.

The small carrier is being criticized today by some, who believe it's discrimination, though others support the move, and, on its Facebook page, one poster asks the cost for a pregnant woman.

Samoa Air has a small fleet of small planes, Britten Norman and Cessna.

According to Reuters, the airline has been doing this since last November, but only gained wider attention when it launched international flights to nearby American Samoa last week.

According to The Globe and Mail's Guy Dixon, a short trip costs about 35 cents (U.S.) a kilogram. A 200-mile trip is more like $1.06.

"You travel happy, knowing full well that you are only paying for exactly what you weigh," the airline says on its website, with a demo fare calculator.

(I'm not sure I did it correctly, but my flight would cost just shy of $145 to American Samoa. I'm also not sure if I've gained weight.)

"Take as many or as few bags as you wish – and avoid the exorbitant excess baggage fees! With Samoa Air, you are the master of how much (or little!) your air ticket will cost."

As The Wall Street Journal notes, this is an industry scrambling for profits, though many careers are loathe to bring in a similar system for reasons of discrimination.

This is a regional carrier, and, some analysts told the newspaper, the scheme may not translate well to larger airlines.

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