These are stories Report on Business is following Monday, March 30, 2015.
Give and take
Provincial governments are wasting little time snatching back the breaks the Canadian government gave taxpayers.
By the time budget season among the provinces is over, BMO Nesbitt Burns estimates, the provinces will have taken back some 75 per cent of the $4.5-billion in Ottawa's relief on taxes and fees.
Already, says senior economist Robert Kavcic, the four provincial budgets to date have chalked up more than $2-billion in tax and fee hikes for the 2015-2016 fiscal year.
And there's going to be more, he says in a recent report.
"Most of what Ottawa will be returning to one taxpayers' pocket, the provinces will take out of the other," Mr. Kavcic said.
"All told, while Ottawa's package of tax cuts/benefit increases will come in at around $4.5-billion in FY 15/16, it looks like the provinces will take back about three-quarters of it," he added.
Indeed, as The Globe and Mail's Justin Giovannetti reports, Alberta's budget late last week contained about 60 tax or fee hikes, with a revenue goal of $1.5-billion in the next year as the province suffers from the oil rout.
British Columbia is the "odd province out" of the four so far, Mr. Kavcic said, while last week's Quebec budget had measures that had already been announced. Saskatchewan didn't hike taxes.
"Atlantic Canada is still on deck, and most of the group will be pushing through tax hikes to some extent, while Ontario will likely have to lean on taxpayers, at least somewhat, in order to fend off the credit rating agencies that have given the province a one-year post-election pass," he added.
The next budget comes tomorrow, in New Brunswick, and tax hikes are expected.
After that comes Nova Scotia, next week, and Manitoba at the end of next month.
The Ontario and federal government have yet to announce dates for their budgets, but the former has "the biggest fiscal hole," noted Toronto-Dominion Bank economist Leslie Preston.
"Since the recession blew a hole in provincial coffers, most provinces have been wrestling down deficits, and as a group is more than halfway finished (on a relative-to-GDP basis," Ms. Preston said.
"However, the collapse in oil prices has made the road back to balance steeper by worsening the situation of oil-dependent provinces," she added.
"Government restraint continues to lie ahead, and our updated Canadian economic forecast shows that government spending in real terms is expected to contract over most of 2015 and remain quite modest through 2016."
- In Ontario, it's taxing the rich. In Alberta, it's helping out
- Justin Giovannetti: Alberta budget to include more taxes, reveals $5-billion deficit over next year
- Carrie Tait: Alberta plans to spend big to ease oil pains
- Globe Editorial: Jim Prentice's plan to stop blowing the windfall
- Les Perreux: Balanced Quebec budget to phase in relief to taxpayers
- Justine Hunter: Balanced B.C. budget features higher user fees, little tax relief
- Why so many (except the truckers and me) hate Ontario's budget
Cook slams legislation
Apple Inc.'s chief executive officer is the latest to slam so-called religious freedom laws in the United States.
Writing in The Washington Post, Tim Cook warns such legislation threaten to "undo decades of progress toward greater equality.
He was referring to a wave of laws across several states that allow businesses to shut people out on the grounds that it erodes their religious freedoms.
The latest state to enact such legislation is Indiana, where there has been an outcry over the potential for businesses to turn away gays and lesbians.
There has also been a backlash by several companies, with Apple being the latest.
The U.S. government also has such a law, though some say it simply allows people to practice their religion free from government interference.
"There are laws on the books in a majority of states that allow employers to fire people based solely on their sexual orientation," Mr. Cook warns.
"There are many places where landlords can evict tenants for being gay, or where we can be barred from visiting sick partners and sharing in their legacies."
- Don't visit Indiana if you're gay. Or a Jewish atheist with a Catholic wife
- Apple's Cook calls 'religious objection' laws dangerous, bad for business
Canada's economy is closing out an "atrocious" quarter, slammed by the crash in oil prices, Bank of Canada Governor Stephen Poloz warns.
The first quarter of the year ends tomorrow, and economists have already warned it's going to look ugly when the numbers come in. Indeed, some observers have suggested the economy may actually contract, though modestly, this quarter.
In an interview with The Financial Times, Mr. Poloz underscored those concerns, highlighting why he cut his benchmark interest rate by one-quarter of a percentage point in a move that surprised the markets in January.
"The first quarter of 2015 will look atrocious, because the oil shock is a big deal for us," Mr. Poloz said, citing the fact that the oil industry is slashing spending.
"In theory lower oil prices mean [putting] more money in consumers' pockets, but ... if an oil company cancels [an investment] project, laying off a worker, that guy will not have the money to buy a new pickup truck," the Bank of Canada governor is quoted by the news organization as saying.
Some observers, of course, have pinned at least some of their hopes on the oil-induced decline of the Canadian dollar, but that, Mr. Poloz said, is slow to work its way through the system.
It is however, still expected to have an impact.
"Now that the Canadian dollar has depreciated and U.S. investment is starting to fire on all cylinders, we are reasonably confident the export side will recover," Mr. Poloz said.
"The manufacturing sector is turning around nicely," he added.
"We were losing a lot of the auto parts manufacturing to Mexico. That calculus has shifted."
- Poloz warns of 'atrocious' first-quarter economic growth
- David Parkinson in ROB Insight (for subscribers): GDP report to show oil shock's impact on Canadian economy
- Canada's economy in a funk, could actually shrink in first quarter
Canadian executives share Mr. Poloz's concerns, The Globe and Mail's Richard Blackwell reports today.
Our latest quarter C-Suite survey, Mr. Blackwell writes, reveals that Canadian corner offices are in the most pessimistic mood since the depths of the recession.
Some 40 per cent of executives surveyed expect the economy to decline over the next year.
Streetwise (for subscribers)
ROB Insight (for subscribers)