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These are stories Report on Business is following Wednesday, Dec. 17, 2014.

Follow Michael Babad and The Globe's Business Briefing on Twitter.

New era
As economists scramble to rejig their economic forecasts in the wake of the oil price plunge, Toronto-Dominion Bank is the latest to calculate Canada's "changing of the guard."

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Ontario is now projected to lead the provinces in average economic growth over the next two years, with British Columbia and Alberta just behind.

"Oil-rich provinces have recorded the sharpest downgrades in their respective outlooks," economists Craig Alexander, Derek Burleton and Jonathan Bendiner said in today's report.

"On the flip side, the outlook is more upbeat for most non-resource based economies," they added.

"Solid economic growth from the U.S., another downward leg in the loonie and lower energy costs should provide a lift to manufacturing-based economies … This marks a changing of the guard, as Alberta has recorded a sizeable growth advantage over the rest of the country in recent years."

TD now forecasts that economic growth in 2015 and 2016 will average 2.5 per cent in Ontario, 2.4 per cent in British Columbia and 2.3 per cent in Alberta.

TD cut its forecasts for the oil provinces of Alberta, Saskatchewan and Newfoundland and Labrador.

"It will not likely be long before the income shock from the recent plunge in oil prices will filter through to the labour markets in the affected regions," the TD economists warned.

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"Housing market activity in these regions is also likely to be tempered as housing demand pulls back due to weaker employment prospects in the first half of 2015."

Other provinces will also likely suffer some indirect fallout via less trade with the oil provinces and the poorer fortunes of the federal government.

But there are "powerful offsets," TD said, including the lower dollar, the Bank of Canada on the sidelines for longer given what will be lower inflation, and a boost to consumers through lower pump prices, which the bank forecasts will save the average family about $300 a year.

Fed boosts markets
The Federal Reserve brought in new language today, and kept the old language.

It's only language, but widely-watched, nonetheless, coming six years after the onset of the financial crisis.

The U.S. central bank altered the language in its policy statement this afternoon to say that it "can be patient in beginning to normalize the stance of monetary policy."

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That's different from its earlier pledge to hold its benchmark rate at its emergency low level for a "considerable time" after ending its asset-buying stimulus program.

Not wanting to upset markets, however, the Fed stressed that its altered view isn't a change from its old view, but rather is "consistent" with its earlier "considerable time" signal.

Take away the language of central bankers, and it all suggests a better economic outlook, with lower unemployment.

"Information received since the Federal Open Market Committee met in October suggests that economic activity is expanding at a moderate pace," the central bank's policy-setting panel, the FOMC, said.

"Labour market conditions improved further, with solid job gains and a lower unemployment rate."

The doesn't mean the benchmark rate, now effectively zero, is changing any time soon, but it does open the door for a few months down the line.

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Economists had largely expected the Fed to drop the "considerable time" reference completely.

But, treading its fine line, it seemed to satisfy all comers, as stocks rallied and the Canadian dollar rose slightly before dipping again.

"The FOMC doesn't want to be the Grinch that stole Christmas, and wants more policy freedom, but the bottom line is that rates go up next year barring surprises," said Kit Juckes, the chief of foreign exchange at Société Générale.

Sherritt sees 'good start'
The chief executive officer of Sherritt International Corp. says the easing of economic, travel and diplomatic relations between the Untied States and Cuba will have little immediate impact on his company, but could lead to major gains if the full embargo is eventually lifted, The Globe and Mail's Richard Blackwell reports.

Sherritt, a resource company based in Toronto, generates the majority of its cash flow from Cuban oil and gas operations, along with a nickel and cobalt mining joint venture there. But because of the U.S. embargo against Cuba, the company cannot sell any of its production to the United States, and cannot not use any U.S.-made mining equipment. And it can't raise money in the United States.

The easing of relations between the United States and Cuba is "is a good start," CEO David Pathe said, although "it is early days yet."

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Cuba has been a "stable jurisdiction" for Sherritt, and the company has had success there, but "there has always been some noise around it and some uncertainty as a result of the relationship between Cuba and the United States," Mr. Pathe said. "If today is a step towards alleviating some of those concerns in the minds of investors, that will be good for Cuba, and what is good for Cuba is good for us."

Sherritt stock surged after the announcement.

Oil patch stung
The squeeze on Canada's oil patch grows ever tighter amid the collapse in oil prices.

Two more companies, Husky Energy Inc. and Penn West Petroleum Ltd., announced cuts to capital spending today.

Penn West went even further, slashing its dividend amid new crude price assumptions.

The Calgary company said it would cut the quarterly payout to just 3 cents from 14 cents beginning next quarter. That's a reduction of some $160-million.

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At the same time, Penn West said it will cut capital spending by some $215-million to $625-million.

"In November 2014, when Penn West announced its 2015 capital budget, the forward strip for crude oil was in the range of the company's Canadian per-barrel modeling assumption of $86.50," the company said.

"Since that time, however, crude oil prices have declined significantly. Reflecting this reduction in the outlook for crude oil prices, the company has reduced its Canadian crude oil pricing assumption for 2015 by approximately 25 per cent to $65 per barrel."

Husky, meanwhile, said it will cut capital spending next year to $3.4-billion from the $5.1-billion forecast this year amid the plunge in oil prices and the near competition of two big projects.

"We continue to steer a steady ship through stormy waters," chief executive officer Asim Ghosh said in a statement.

"Our strong financial position and resilient portfolio are helping weatherproof our business against current market conditions."

Husky projected average production at 325,000 to 355,000 barrels of oil equivalent a day.

BlackBerry launches Classic
BlackBerry Ltd. unveiled its latest smartphone, the Classic, a product aimed at providing a familiar experience to its diehard customers who refuse to give up their old keyboard devices, The Globe and Mail's Sean Silcoff reports from New York.

The Classic, which restores popular features such as a belt of physical function keys and a series of keyboard-activated shortcuts that disappeared from recent BlackBerry smartphones, will be carried in all AT&T retail stores across the United States, said Steve Hodges, president of the northeast region with AT&T Mobile.

"I can't wait to see this product all throughout the country," Mr. Hodges said at a launch event for the Classic in New York's financial district.

HBC names new chief
The former chief of North America's iconic toy store will soon be heading up Canada's iconic retail chain.

Hudson's Bay Co. today named Gerald Storch, former chairman and chief executive officer of Toys 'R' Us, as its new CEO, effective Jan. 6, The Globe and Mail's Bertrand Marotte reports.

Mr. Storch gets not only Hudson's Bay, but also Lord & Taylor, Saks Fifth Avenue, Saks OFF 5 and Home Outfitters, which are all under the HBC umbrella.

He takes over from Richard Baker, who will stay as governor and executive chairman.

"We believe this change will enhance our growth strategy," Mr. Baker said in a statement.

Toys aside, Mr. Storch has also been vice-chair of Target Corp., among other positions.

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