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These are stories Report on Business is following Tuesday, Dec. 11, 2012.

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Carney warns again on debt
The Bank of Canada could be forced to take action to cool consumer borrowing, Governor Mark Carney reiterated today, but would clearly signal the move.

An interesting note in Mr. Carney's speech to a Toronto business audience is that the share of new fixed-rate mortgages in Canada has almost doubled this year to 90 per cent.

That, he added, is a result of both "attractively priced" mortgages and the central bank's guidance that the next move in interest rates will be up, not down. The central has already noted that credit growth has slowed,  and Mr. Carney repeated that again today in a separate interview with The Globe and Mail's editorial board.

"Our current guidance indicates that some policy action may be necessary, encouraging a degree of prudence in household borrowing," Mr. Carney said in his speech, echoing the warnings of the Bank of Canada's last policy statements.

As The Globe and Mail's Barrie McKenna reports, the central bank Governor was speaking on "guidance" in general, and how it is best used by the Bank of Canada.

As Mr. Carney repeated, the central bank "would clearly say we are doing so" if it chose to act on consumer debt.

This month, as it held its benchmark rate steady at 1 per cent, the central bank warned about household debt in its latest financial system review, and how it's playing out in the real estate market.

As it has said in the past, the biggest domestic threat to financial stability "continues to stem from the elevated level of household indebtedness and stretched valuations in some segments of the housing market."

In his interview with The Globe and Mail's editorial board, Mr. Carney said he's seeing encouraging signs of credit growth slowing and housing starts cooling, though this requires "continued vigilance," The Globe and Mail's Boyd Erman writes.

Is Canada getting too cocky?
Among Canada's strengths, according to Standard & Poor's Ratings Services, is its position as its housing market cools.

The ratings agency late yesterday affirmed Canada's rating at triple-A, citing several strengths, among them the economic and fiscal outlooks.

It did cite some trouble spots, including the country's reliance on the U.S. market, and the bloated levels of consumer debt. But Canada should nonetheless be able to withstand headwinds.

"Despite several elevated measures of Canadian household indebtedness and house prices, including household credit market debt to disposable income of 162 per cent in 2011, we continue to view Canada's contingent liabilities as limited," the agency said.

"We view micro- and macro-prudential factors as stronger than those of many peer countries at the time of their housing market corrections."

One wonders, though, whether Canada is getting too cocky.

Here's what S&P said:

"The ratings on Canada reflect Standard & Poor's opinion of the country's  relatively diversified and resilient economy and its effective and predictable policymaking and political institutions."

Here's what Finance Minister Jim Flaherty said a short time later:

"We are pleased that Standard & Poor's has confirmed our federal government's top credit rating, while pointing to the effectiveness and stability of our policymaking, the resilience of our economy, and the strength of our monetary and fiscal flexibility."

Let's not get too smug, Mr. Flaherty, because these things have a way of coming back to bite you in the bum.

While S&P is correct in where Canada has been, the challenges are mounting when it comes to where Canada is headed.

Remember that the economy crapped out in the third quarter, that the OECD expects just moderate growth in Canada through to mid-2013, and that while most observers expect a government-engineered soft landing for the housing market, the jury's still out among some.

And that the jobless rate remains stubbornly above 7 per cent, and is projected to remain there, despite the gains of late. For young people, it's 14 per cent.

Yes, Canada has a done a good job. But it would be better to focus on what's next than herald our successes.

I would much rather know the next steps for easing unemployment from its current 7.2 per cent than dwell on the fact that employment levels are now 450,000 above the pre-recession peak.

Trade deficit narrows
Canada's trade deficit shrank in October to just $169-million, from $1-billion a month earlier, as exports climbed and imports tumbled. But all is not well, despite the broad picture.

Exports increased 1 per cent in the month, Statistics Canada said today, while imports fell 1.2 per cent. Imports are now down by almost 6 per cent since their peak in June, and were down in October on volumes, not prices.

Exports gained, largely on prices.

There were "widespread decreases" in imports, the federal agency said, while exports were pumped up by agriculture, fish and food products, which climbed 18 per cent to a record level.

It's interesting to note that that's the fourth monthly gain a row, with exports of soybeans and canola playing a large part.

Energy exports rose 3 per cent, with prices up 4 per cent.

But it's not as good as it looks.

"While trade looks as though it could add to Canadian GDP growth in Q4, the underlying story is less positive," said senior economist Sal Guatieri of BMO Nesbitt Burns.

"Export growth remains weak, with the drop in imports providing all the boost. With the U.S. facing uncertainty driven by the 'fiscal cliff,' Canadian exports will likely remain challenged into next year."

Oil, hockey and Mr. Edwards
As Canadian issues go, you can't top oil and hockey. And, as Forbes notes, Murray Edwards is at the heart of both.

Mr. Edwards is chairman of Canadian Natural Resources and part-owner of the Calgary Flames.

As The Globe and Mail's Nathan VanderKlippe, Shawn McCarthy and Jacquie McNish report, he was a key player behind Prime Minister Stephen Harper's new rules for foreign investment in the oil sands.

Mr. Harper spoke several times with Mr. Edwards as he formulated his policy and Ottawa's final decision echoed the latter's views on slapping restrictions on state-owned enterprises.

He has also been a major shaker in talks to end the National Hockey League lockout of its players.

Forbes calls Mr. Edwards "the most important billionaire in Canada," someone who likes to stay behind the scenes and stay out of the limelight.

"It's safe to say Edwards is becoming a very public figure in Canada – and maybe even in Beijing," Forbes writes, referring to the decision that would block further investment in the oil sands by state-owned enterprises after approval of CNOOC Ltd.'s $15-billion (U.S.) takeover of Nexen Inc.

HBC loss grows
Hudson's Bay Co. today reported its first results after its return as a publicly-listed company, with a third-quarter loss that grew to $8.5-million in its core business.

Sales climbed almost 4 per cent to $930.4-million.

The loss of 8 cents a share in its continuing department store operations compared to a loss of $7.5-million or 7 cents a year earlier, The Globe and Mail's Marina Strauss reports.

The results mark an historic moment for HBC, which went public last month after operating as a private company for seven years. Today, under control of U.S. real estate magnate Richard Baker, the retailer is comprised mainly of the Bay (which it is renaming Hudson's Bay), Lord & Taylor in the United States and the Canadian Home Outfitters superstore chain.

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