These are stories Report on Business is following Friday, Jan. 9, 2015.
Fill 'er up
You may not be able to resist filling up the tank today.
With regular unleaded at 89.9 cents a litre in downtown Toronto, I certainly couldn't.
Prices vary across Canada, of course, but the bottom line is that we're still saving a bundle.
Indeed, according to the latest calculations from BMO Nesbitt Burns, Canadians will be saving some $20-billion over the course of a year, since the summer, if low prices hold.
"That's about $1,500 per family, or almost enough for three Timmy's coffees per day for a year," said BMO senior economist Sal Guatieri, his number based on a drop of 48 cents a litre.
For Americans, BMO's calculations work out to a drop of $1.51 (U.S.) a gallon, or savings of a stunning $208-billion.
Which, in turn, means some $1,800 for the average family, or "just enough to buy that 70-inch flat screen HDTV you've been pining for."
From different analysts, of course, come different forecasts. And much depends on where things stand on the day of those projections.
Economists at Bank of America Merrill Lynch forecast this week that we'll save some $13-billion (Canadian) this year, based on $1-a-litre-gas and Statistics Canada findings that we spent $60-billion, annualized, on gas in the first half of last year.
"Much of that windfall gain will be saved, suggesting a more muted overall impact on GDP, probably only a few tenths of a percentage point," they said in their BofA Merrill Lynch Global Research report.
"Nonetheless, this decline in pump prices will help to largely offset the hit to employment incomes and wealth from falling energy prices, leaving the ultimate drag on households more muted."
So you can save it, or buy three cups of Tim Hortons coffee a day. Or fewer at Starbucks.
- Oil heads for seventh straight weekly loss
- Bottom of the barrel: The fallout if oil hits $40
- Video: What will happen in Canada if oil drops to $40
- Jeff Lewis: Alberta oil firms keep pumping as prices collapse
- Jeffrey Jones: Reserves the next pressure point after drastic drop in oil prices
Canada loses jobs
Canada's unemployment rate is holding firm at 6.6 per cent, while the United States enjoys its lowest since the summer of 2008.
As The Globe and Mail's David Parkinson reports, Canada lost 4,300 jobs in December. But full-time employment rose, by 53,500, offset by the loss of 57,700 part-time jobs.
All in all, Canadian employment levels rose by 1 per cent last year, or 186,000 jobs, Statistics Canada said today.
"The final tally on Canadian employment for 2014 was disappointing on the surface, but the details were generally a bit more encouraging, and that was mostly true for the year as a whole," said chief economist Douglas Porter of BMO Nesbitt Burns.
"In some ways, this report was the mirror image of the U.S. release today - the U.S. reported robust job gains, but weak wages, while Canada reported weak jobs, but decent wage gains. The bigger picture is that Canada's job market continues to see-saw, but is erratically improving through the noise."
In the United States, employers added 252,000 jobs, according to the Labor Department, while the unemployment rate fell to 5.6 per cent.
Having said that, that's because some job-seekers gave up looking for work.
- David Parkinson: Canadian economy sheds 4,300 jobs in December
- U.S. payrolls jump, unemployment falls to 5.6 per cent
Dollar seen staying low
With lower oil prices comes a weaker loonie.
And it's going to stay that way for at least two years, according to the latest forecast.
Bank of Nova Scotia now projects that the Canadian dollar will remain soft at least through the end of next year, hitting a low point of about 82 cents U.S. in the second quarter of this year, ending 2015 at just shy of 83.5 cents, and ending 2016 at about 84.75 cents.
As well as lower oil prices, and what that will mean to the economy, there's now the expectation that the Bank of Canada will lag the Federal Reserve even longer in hiking interest rates.
"Canada's growth profile was already expected to underperform the U.S. but this divergence has also widened, providing more fuel for CAD bears," Scotiabank chief currency strategist Camilla Sutton said in the forecast, referring to the Canadian currency by its symbol.
"Sentiment remained relatively stable in late 2014; however the broad view is one of USD strength, supported by both fundamentals and flows and accordingly the investor bias is to be short CAD."
Indeed, the loonie tumbled closer toward the 84-cent mark today after the duelling jobs reports, touching a low of 84.19 cents and a high of 84.68 cents.
Li Ka-shing reorganizes
Hong Kong's Li Ka-shing is reorganizing his diversified conglomerate into two new listed companies, The Globe and Mail's Bertrand Marotte reports.
His holding company Hutchison Whampoa, a diversified portfolio of companies in everything from ports, retail and utilities to energy companies including Calgary-based Husky Energy Inc., is to be taken over by his flagship property company Cheung Kong.
The newly created group would then be split into two new companies. The first, CK Hutchison Holdings Ltd., would be the main holding company for all of non-property assets, such as Husky.
The second company, Cheung Kong Property Holdings Ltd., would become the holding company for the extensive real estate portfolio, which includes office, shopping centres and residential development in Hong Kong and mainland China.
A major goal of the restructuring is to address the holding-company discount shareholders have placed on the mix of assets, Cheung Kong said today.
Housing starts dip
Canadian home building levelled off in December, particularly condo construction.
Housing starts fell last month to an annual pace of 180,560 from November's 193,199, with construction starts for multiples leading the way, Canada Mortgage and Housing Corp. said today.
"With December's results, housing starts contracted at an annualized pace of over 20 per cent in Q4 after a 5-per-cent advance in the prior quarter," said senior economist Krishen Rangasamy of National Bank.
"So, residential construction was likely a drag on the economy in Q4 after contributing to it in the two prior quarters. For 2014 as a whole, housing starts averaged 189,000, slightly better than the prior year's performance, but well below the all-time record of 228,000 set in 2007."
- Jeff Lewis: Cooling Calgary real estate adds to fears beyond energy sector
- Vancouver, Calgary, Toronto homes: One of these things is not like the others
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