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Tony Clement, left, and Stephen Harper walk in Huntsville, Ont., in June, 2008 (Adrian Wyld/Adrian Wyld/The Canadian Press)
Tony Clement, left, and Stephen Harper walk in Huntsville, Ont., in June, 2008 (Adrian Wyld/Adrian Wyld/The Canadian Press)

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Gazebos and toilets: Some advice for Tony Clement Add to ...

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On gazebos and toilets Here are some suggestions for Tony Clement should he be re-elected, return to Ottawa as industry minister, and get another $50-million to play with:

Build a Muskoka-style gazebo an hour's drive from the Potash Corp. mine outside Esterhazy, Sask. It could be a place for BHP Billiton's Marius Kloppers to rest and gaze longlingly because that's as close as he's ever going to get to that mine. Actually, let's just move the gazebo from Muskoka and save the $100,000 to pay down debt.

Build a Muskoka-style park outside the Toronto Stock Exchange. It would be sporting to have a lovely English garden ready for when the British arrive.

Build Muskoka-style toilets outside Konrad von Finckenstein's house, for the next time Mr. Clement tells the CRTC chairman to get off the pot.

Bank boosts outlook The Bank of Canada has a more optimistic outlook for Canada's economy this year, but that doesn't mean interest rates are going to rise before the summer months at the earliest.

The central bank boosted its forecast for economic growth as it held its benchmark rate steady at 1 per cent today, Globe and Mail economics writer Jeremy Torobin reports from Ottawa. But there was no signal that Governor Mark Carney and his colleagues plan to resume raising rates next month, particularly given the strength of the Canadian dollar.

"Its call for growth of 2.9 per cent in 2011 and 2.6 per cent in 2012 is close to our own forecast, and would still require a round of tightening ahead given that its hard to imagine holding to a 1-per-cent rate with the output gap closing," said chief economist Avery Shenfeld of CIBC World Markets.

"But the first hike still looks to be a July event, and will depend on the course of the Canadian dollar from here. Over all, a bit less hawkish than some might have expected."

While the economic outlook may be brighter, the central bank now expects overall inflation could hit as high as 3 per cent this quarter. And here's something to note from the bank's accompanying statement: Wage growth is expected to stay "modest."

Here are the views of several observers:

"Stronger growth in Canada has shortened the timeframe needed in the re-normalization of short-term interest rates - that remains the key take-away from today's statement. If one wants to read between the lines, the BoC seems in no great hurry to start the campaign and a May hike would require some more convincingly firm data (watch, in particular, the release of Q1 GDP data on May 30). However, on the assumption that things unfold as per the BoC's outlook, we see no significant obstacle to the first rate hike coming in July as per our most recent forecast." Mark Chandler, RBC Dominion Securities

"The BoC remains confident about global and U.S. growth and has upgraded its forecast for the Canadian economy. We think that the BoC is very careful not to sound too optimistic so as to prevent a repricing of rate expectations and cause further appreciation of the Canadian dollar, especially now that it seems more concerned about the exchange rate. There is nothing in the statement that let us believe that the BoC is ready to hike rates at the May meeting and we continue to believe that the BoC will raise rates at the July meeting." Charles St-Arnaud, Nomura

"We continue to believe that the bank will hold off until July before raising rates, as there is no smoking gun here signalling a quick return to tightening. While the bank is less concerned about the global and U.S. risks, it is focused on the strong loonie. The needle is slowly moving to renewed rate hikes, but a hike is not yet imminent." Douglas Porter, BMO Nesbitt Burns

"We still believe that a July rate hike is the best bet. Notably, by that time the U.S. Federal Reserve will have completed its second round of quantitative easing, reducing the risk of further upward pressure on the Canadian dollar. The bank today served up a reminder of the downside risks to growth and inflation surrounding the elevated loonie." Francis Fong, Toronto-Dominion Bank

"The policy statement from the Bank of Canada this morning signalled that it is still in no rush to raise interest rates. In particular, it offered no hint that a summer rate hike is coming, supporting our view that policy could be on hold for a lot longer than most other analysts expect." David Madani, Capital Economics

"Despite a high flying loonie, that could create headwinds for the Canadian economy, growth has been revised up materially from 2.4 per cent to 2.9 per cent in 2011 and the economy is expected to reach full capacity six months earlier than previously expected. In our view, this is setting the stage for the Bank of Canada to provide some guidance on interest rates in May and the resumption of the normalization of monetary policy starting in July. The Bank should be aiming for an overnight rate of 2 per cent by year end." Paul-André Pinsonnault, National Bank

Trade surplus shrinks Canada's trade surplus unexpectedly shrank in February on lower exports of crude petroleum and cars, The Globe and Mail's Tavia Grant reports today.

The surplus narrowed to $33-million in the month from a revised $382-million, Statistics Canada said.

Both imports and exports fell. Exports tumbled 4.9 per cent after four straight months of growth while imports slid 4 per cent.

Lower volumes of both energy products and automotive products were the main reasons for the export decline, the agency said.

Lower volumes of both energy products and automotive products were the main reasons for the export decline, the agency said.

New-house prices rise New-house prices in Canada rose 0.4 per cent in February, following on January's 0.2-per-cent gain, Statistics Canada said today.

Prices rose the most in Regina, at 1.8 per cent, followed by Ontario's Kitchener-Waterloo region at 1.7 per cent, Charlottetown at 1.5 per cent, and Edmonton at 1.1 per cent, the agency said as it released its new housing price index.

Prices fell in Calgary, by 0.4 per cent, Windsor by 0.3 per cent, the Ottawa-Gatineau area by 0.2 per cent, and Saint John, Fredericton and Moncton by 0.1 per cent.

Year over year, Statistics Canada said, the index climbed 2.1 per cent in February, compared to 1.9 per cent in January.

Analysts keen on Gildan Analysts are boosting their price target on shares of Gildan Activewear Inc. in the wake of $350-million (U.S.) deal for sock maker Gold Toe Moretz Holdings Corp.

Although Gildan already has some socks in its portfolio, yesterday's deal offers access to new distribution channels, The Globe and Mail's Bertrand Marotte reports from Montreal.

UBS Securities Canada analyst Vishal Shreedhar boosted the target on Gildan stock to $40 from $37, saying the deal expands the company's market opporltunities in three ways:

  • Gildan gets new retail relationships with wholesale clubs, specialty sporting goods chains, department stores, mass merchants and national chains given's Gold Toe's existing connections to outlets such as Sam's Club, Costco, Dick's Sporting Goods and Macy's.
  • New brands and exclusive licences heighten opportunities beyond private labels.
  • New third-party connections could expand the wholesale market beyond high-volume basic apparel.

UBS did cite some "negatives," including the fact that Gildan may now be one of the biggest sock suppliers, but its brands are not leading ones.

TD Newcrest analyst Jessy Hayem boosted the price target to $43 from $39, while National Bank analyst Hugues Bourgeois upped his target to $40 (U.S.) from $36.

In Economy Lab today

Feeling the pinch from high prices at the pump? You're not alone, Tavia Grant reports.

Waiting for a surplus to implement a costly new program may on the surface seem like a prudent way to control government spending. However, since these programs are not one-time costs, but rather ongoing spending, it is in fact a recipe for fiscal disaster, Mike Moffatt writes.

In Personal Finance today

Many things doctors recommend can be eligible for tax credits and deductions, but be sure you have the paperwork to back them up.

A look at quirky and unexpected items Canadians have tried to get past the Canada Revenue Agency - often successfully.

We're all feeling the sting of higher food and gas prices, but it won't fuel an interest rate increase, Rob Carrick writes.

From today's Report on Business

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