Bank of Canada Governor Stephen Poloz: “Protectionism does not promote growth and its costs are steep”
Bank of Canada Governor Stephen Poloz: “Protectionism does not promote growth and its costs are steep”
May 7, 2017
It’s hard to say whether or not Canada is on the verge of a trade war with the United States. The Trump administration has imposed ruinous tariffs on Canadian soft wood lumber. In retaliation, on Friday May 5, 2017 Prime Minister Trudeau sent a letter to the government of British Columbia saying that it is considering banning American coal exports from the province, and applying tariffs to products originating in Oregon.
Now that it has attacked the Canadian dairy and softwood industries, the Trump administration is also considering aluminum. If Trump does decide to take trade action against aluminium imports, Rio Tinto is going to take a hit because it exports 75{92d3d6fd85a76c012ea375328005e518e768e12ace6b1722b71965c2a02ea7ce} of the aluminium it produces to the States.
As small-minded xenophobia continues to drive economic and political policies in countries around the world, there is much to be feared. Economic protectionism has reared its ugly head with the presidency of Donald Trump. Irony abounds in these troubled times for those who bother to seek it out. During the recent past, American investment in Mexico has bolstered the Mexican economy to such an extent, that it reduced the number of undocumented Mexican workers smuggling themselves into America hoping for work. Now that the Mexican economy is starting to slow down, those numbers will start increasing again.
Trying to evaluate what this may mean for Canada is a moot point. If Trump decides to attack the Canadian car industry, Canada would suffer dire consequences. The car industry is a massive employer in Canada, and employs directly and indirectly one in seven Canadians. The Canadian Vehicle Manufacturers Association estimates that approximately 85{92d3d6fd85a76c012ea375328005e518e768e12ace6b1722b71965c2a02ea7ce} of the vehicles built in Canada are destined for the export market, with the majority – if not all – of those headed to America.
In Canada, Prime Minister Trudeau, has done his best as an advocate for world trade. On March 28, 2017, Bank of Canada governor Stephen Poloz gave a speech in his home town of Oshawa that furthered the argument. In his speech Poloz took six eras from Canadian history to prove his point that when Canada has open borders, the country flourishes and when it erects trade barriers in the form of tariffs, the country suffers. Backing up the points he makes is the observation that Canada needs immigration, open markets and foreign capital to thrive because the country is too large and the population too small to do it by itself.
This broad brush approach should come as no surprise to those who remember their history. Canada was founded on the fur trade. Poloz makes the case that when economies falter and protectionism – in the form of tariffs – increases, national economies stagnate and retreat.
Poloz’s two most salient points in his plea for the benefits of open trade may well be the miniature studies of the Great Depression and the 1965 Auto Pact. On the Depression Poloz says, “Meanwhile, in a bid to protect American workers and farmers from foreign competition, the US Congress pushed up the average tariff rate on dutiable goods to nearly 60 per cent by 1932. This policy backfired spectacularly. Most other countries, including Canada, retaliated with tariffs of their own. The trade war had no winners; everyone suffered as international shipments collapsed. Canadian trade fell by more than 50 per cent during the Depression; US trade, by 70 per cent.”
In contrast to the failed policies which deepened the Depression Poloz describes the 1965 Auto Pact like this: “The 1965 Auto Pact created a single, tightly linked market for automobiles and parts between the two countries. This gave Canadian producers both the opportunity to develop economies of scale and the ability to specialize production. Over the agreement’s first 40 years, auto production in Canada roughly tripled, while employment in the industry doubled.”
While much of the impetus for Brexit is based on the fear of an erosion of national sovereignty, it should also be noted that Poloz states that in relation to the 1988 NAFTA agreement: “Many Canadians resisted continental free trade, fearing job losses, the possible loss of our health care system, and a general loss of Canadian economic or even political sovereignty. None of these concerns have come to pass, although heightened competition did result in job losses in some sectors. But these losses were more than offset by gains in other areas, and consumers have continued to benefit from lower prices and increased purchasing power as most tariffs were eliminated.”
While the prospect of a punitive trade war looms, Trump is pushing forward with a trade deal between the United States and Japan. Is Trump playing tough to soften countries up for trade negotiations? At this point no one can really say. To read Poloz’s entire speech, click here.
By Noel Meyer
- Published in Blog
Here’s what Canada needs to regain leadership in mineral exploration and mining
Here’s what Canada needs to regain leadership in mineral exploration and mining
MINING.com
http://www.mining.com/web/heres-what-canada-needs-to-regain-leadership-in-mineral-exploration-and-mining/
Canada’s mineral exploration and mining industry is asking Energy and Mines Ministers, currently in Winnipeg for their 73rd annual conference, to work on tackling several challenges that have resulted in Canada dropping to second place behind Australia as the most desirable mining destination in the world.
Prospectors & Developers Association of Canada (PDAC) President Bob Schafer said that as the downturn was still being felt by the mineral exploration and mining industry, action was required to ensure Canadians are able to capitalize on the great opportunities that lie ahead.
Restoring Canada’s status as the top exploration and mining jurisdiction in the world will require concerted and sustained effort by all jurisdictions, experts say.
“We will work with all jurisdictions and the Federal Government to ensure that Canada’s reputation and attractiveness as the premier location for global mineral investment is regained. In doing so, the substantial social and economic benefits—to all Canadians—that accompany these investments will be enjoyed,” Schafer said.
“The mining sector’s ability to continue its role as a powerful economic driver and top employer in regions across the country is in large part dependent on the decisions made by Canadians governments,” noted Mining Association of Canada (MAC) President and CEO, Pierre Gratton.
“There are incredible opportunities to achieve shared goals when it comes to socio-economic development, innovation, protecting the environment and solidifying Canada’s leadership in mining—let’s work together to seize them,” Gratton said.
A brief submitted by the Canadian Mineral Industry Federation (CMIF) details seven policy priorities that will help the industry overcome current challenges:
1. Financing for early-stage exploration: CMIF asks that all jurisdictions in Canada maintain and enhance fiscal incentives. In particular, the Ministers are asked to support the renewal of the Mineral Exploration Tax Credit (METC) and to sustain the flow-through shares system. These measures have helped Canada attract billions of dollars in investment and led to the creation of thousands of jobs in remote areas of the country.
2. Regulatory environment: The Ministers should ensure that the recently announced federal review results in an effective regulatory process that the public has confidence in, and that improves the competitiveness of the industry and attracts much-needed mineral investment to Canada. Federal-provincial coordination in this area is critical and provinces are strongly encouraged to participate fully in the review.
3. Aboriginal affairs: CMIF recommends that governments support efforts to enhance the participation of Aboriginal peoples in the industry through investments in health, education and skills-training, and government benefits and resource revenue sharing. CMIF also recommends that governments examine and address challenges related to how they are implementing the duty to consult.
4. Address the costs of operating in remote and northern Canada: CMIF recommends the creation of a northern infrastructure fund within the proposed Canada Infrastructure Bank, and strategic fiscal incentives to help offset the high costs of exploring and operating in remote parts of Canada.
5. Climate change, clean technology and innovation: The Federal Government should invest $50 million over five years in the Canada Mining Innovation Council’s Towards Zero Waste Mining strategy to achieve mutual goals of reducing GHG emissions and environmental impacts, and to support the transition to a lower-carbon future.
6. Land withdrawals: Removal of highly-prospective areas is reducing the attractiveness of Canada as an exploration destination. CMIF is calling on all jurisdictions to ensure that mineral potential is factored into all land withdrawal decision-making processes.
7. Strengthening Energy and Mines Ministers’ Conference: CMIF encourages Mines Ministers to undertake a study to understand how similar meetings are used as a means to drive improvements in government and industry performance.
Restoring Canada’s status as the top exploration and mining jurisdiction in the world will require concerted and sustained effort by all jurisdictions. CMIF looks forward to working in partnership with governments, industry, communities and Aboriginal partners to support a sustainable and competitive Canadian exploration and mining sector.
View Original: http://www.mining.com/web/heres-what-canada-needs-to-regain-leadership-in-mineral-exploration-and-mining/
Bonterra Resources drills 10 m of 9.3 g/t Au in Quebec
BonTerra Extends Main Zone to West with 10 m of 9.3 g/t Au, and Discovers New South Zone with 3.0m of 20.7 g/t Au at its Gladiator Gold Project
– Momentum Public Relations – April 26, 2016
BonTerra Resources Inc. (TSX-V: BTR, US: BONXF, FSE: 9BR1) (the ” Company ” or ” BonTerra “) is pleased to announce that it has received assays on an additional four (4) holes from its 2016 Exploration and Drill Program on its 100{92d3d6fd85a76c012ea375328005e518e768e12ace6b1722b71965c2a02ea7ce} owned Gladiator Gold Project located north of Val d’Or, Qu e bec. To date, 11 of the 19 holes completed have been reported, with eight (8) holes remaining in the lab. All of the drill holes reported in this press release are located at or within 50 meters of the known western extents of the Gladiator deposits.
Nav Dhaliwal, President and CEO of BonTerra, commented: “Once again we are successful in not only extending the mineralization further to the west in the Main Zone, but we have discovered additional high-grade gold with an intersection of 20.7 g/t over 3.0 meters in the New Zone. Of note, the Main Zone intersected gold at the bottom of the deepest hole, clearly highlighting the strength and size of the Gladiator Gold Deposit.”
2016 Drilling Program Update and Highlights:
-New South Zone discovery intersects 3.0 m of 20.7 g/t Au in Hole BA-16-07 at westernmost limits of drilling to date;
-Intersection of 3.0 m of 3.0 g/t Au drilled in New South Zone in Hole BA-16-08;
-Extends Main Zone further to the west with intersection of 10.0 m of 9.3 g/t Au, including 3.0 m of 27.5 g/t Au, in Hole BA-16-10;
-Hole BA-16-10 extends mineralization down to 445.5 meters in deepest and westernmost hole drilled to date;
-8,300 m drilled to date in 19 holes on the western extension of Gladiator Deposit;
-Visible gold was identified in 16 of the 19 holes;
-The Gladiator Deposits are now outlined to the west by an additional 200 m long by 450 m deep, where 23 new drill holes (2015 and 2016) have extended the main deposits and discovered 3 new parallel zones.
-New drill information demonstrates that three zones (Footwall, Main and Intrusive) continue along strike, while three new zones (North Shear 1, North Shear 2 and South) have been identified both to the north and south of the previously known zones.
Dale Ginn, Vice President of Exploration of BonTerra, added: “We continue to build a very solid, consistent high-grade gold deposit that is demonstrating continuity in multiple zones. I would like to thank our Qu e bec-based exploration team for their hard work and excellent technical management of the 2015 and 2016 exploration program to date.”
Upcoming Program and Next Steps
The western extension of the Gladiator Deposit was targeted based on interpretation of recent geophysical programs and extension of known data from the existing Gladiator zones. With the ice drilling program now complete for the winter season, the project will now focus for the month of April on gathering and compiling information from the new core as received to date and pending. The 30-day window is allowing time for a full interpretation of the initial 19 holes and complete a detailed report of the winter campaign. Upon completion, BonTerra’s technical team will define, target and prepare the next drilling campaign and summer surface work. This program is expected to continue with drilling the main zones, follow up on the recent discoveries, apply drilling in order to extend the deposits to the east, and to follow up on targets identified on the Coliseum Property to the west.
See below a summary for all drill results reported to date from 2015 and 2016 including the most recent results from BA-16-07, BA-16-08, BA-16-10 and BA-16-11:
Hole | From (m) |
To
(m) |
Length
(m) |
Grade
(g/t Au) |
Zone |
BA-15-01A | 62.5 | 66.0 | 3.5 | 9.1 | Footwall |
210.6 | 217.2 | 6.6 | 14.0 | Main | |
Including | 215.9 | 216.7 | 0.8 | 104.5 | Main |
BA-15-02 | 107.6 | 110.2 | 2.6 | 4.7 | Footwall |
224.3 | 225.2 | 0.9 | 7.6 | Gabbro | |
320.5 | 476.0 | 155.5 | 0.5 | Intrusive | |
476.0 | 483.7 | 7.7 | 7.2 | Main | |
BA-15-03 | 187.0 | 188.5 | 1.5 | 4.3 | Footwall |
200.0 | 204.0 | 4.0 | 1.3 | Gabbro | |
219.0 | 220.0 | 1.0 | 3.8 | Gabbro | |
339.0 | 379.0 | 40.0 | 0.4 | Intrusive | |
392.8 | 397.0 | 4.2 | 1.6 | Intrusive | |
479.0 | 499.4 | 20.4 | 0.9 | Intrusive | |
BA-15-04 | 224.0 | 235.4 | 11.4 | 1.5 | Main |
Including | 234.1 | 235.4 | 1.3 | 8.0 | Main |
BA-16-01 | 126.0 | 127.0 | 1.0 | 5.2 | Footwall |
240.0 | 378.0 | 138.0 | 0.4 | Intrusive | |
Including | 299.0 | 302.4 | 3.4 | 1.7 | Main |
Including | 353.8 | 357.0 | 3.2 | 1.9 | Main |
BA-16-02 | 11.0 | 55.0 | 44.0 | 0.4 | New (North Shear 2) |
79.0 | 137.0 | 58.0 | 2.5 | New (North Shear 1) | |
Including | 79.0 | 95.0 | 16.0 | 6.1 | New (North Shear 1) |
Including | 79.0 | 84.0 | 5.0 | 15.3 | New (North Shear 1) |
92.5 | 95.0 | 2.5 | 7.5 | New (North Shear 1) | |
103.0 | 145.0 | 42.0 | 1.0 | Local Shear | |
BA-16-03 | 4.0 | 9.0 | 5.0 | 9.0 | Footwall |
Including | 4.0 | 6.9 | 2.9 | 13.5 | Footwall |
BA-16-04 | 64.0 | 70.0 | 6.0 | 10.4 | Main |
BA-16-05 | 25.0 | 26.5 | 1.5 | 3.5 | Main |
184.0 | 186.0 | 2.0 | 12.7 | Main | |
290.7 | 294.0 | 3.3 | 29.0 | New (South) | |
BA-16-06 | 20.8 | 30.0 | 9.2 | 2.1 | Footwall |
336.0 | 337.5 | 1.5 | 3.0 | Intrusive | |
416.0 | 420.0 | 4.0 | 1.7 | Main | |
BA-16-07 | 142.6 | 147.0 | 4.4 | 8.0 | Main |
Including | 144.2 | 147.0 | 2.8 | 11.9 | Main |
155.0 | 156.0 | 1.0 | 14.9 | Main | |
378.0 | 381.0 | 3.0 | 20.7 | New South | |
BA-16-08 | 245.0 | 332.8 | 87.8 | 0.31 | Intrusive |
368.0 | 371.0 | 3.0 | 3.0 | New South | |
BA-16-09 | 21.7 | 27.4 | 5.7 | 24.3 | Main |
110.1 | 111.2 | 1.1 | 41.7 | Main | |
364.0 | 369.0 | 5.0 | 1.8 | New (South) | |
BA-16-10 | 318.0 | 328.0 | 10.0 | 9.3 | Main |
Including | 321.0 | 324.0 | 3.0 | 27.5 | Main |
438.0 | 445.5 | 7.5 | 1.1 | New South | |
BA-16-11 | 35.0 | 36.7 | 1.7 | 13.6 | Main |
40.9 | 44.0 | 3.1 | 4.6 | Main | |
187.4 | 187.9 | 0.5 | 24.4 | New South |
*Stated lengths are core width as drilled, true widths have not yet been determined.
BonTerra Resources Quick Facts:
-7,563-hectare (Gladiator Project) in the Urban-Barry Camp in Quebec containing:
-Using a 4 g/t Au cut-off grade, the project currently contains an inferred resource of 905,000 tonnes, grading 9.37 g/t Au for 273,000 ounces of gold . Of note, ~90{92d3d6fd85a76c012ea375328005e518e768e12ace6b1722b71965c2a02ea7ce} of the worlds operating mines have an average gold grade less than 8 g/t. Mineral Resource Estimate and technical report filed July 27, 2012, Snowden Mining Consultants.
-2016 Exploration Program underway – up to 25,000 meters utilizing minimum of two drill rigs at its 100{92d3d6fd85a76c012ea375328005e518e768e12ace6b1722b71965c2a02ea7ce} owned Gladiator Gold Project to expand current gold resource.
-2,165-hectare (Larder Property) in the Cadillac-Larder Break camp in Ontario ( refer to March 17, 2016 news release highlighting historical gold resource ).
Dale Ginn, P.Geo. has approved the information contained in this release. Mr. Ginn is a Director and Vice-President of Exploration for BonTerra and is a Qualified Person as defined by NI 43-101.
ON BEHALF OF THE BOARD OF DIRECTORS,
Nav Dhaliwal, President & CEO
- Published in Blog, BonTerra Resources, Mining, News Home
Update on the Oil Crisis in Canada and Abroad
Update on the Oil Crisis in Canada and Abroad
– Momentum Public Relations –
According to financial prognosticators the recession that recently hit Canada will continue to affect Canadians; particularly those who live in Calgary and Edmonton. For instance, according to the Conference Board of Canada, Edmonton’s economy will contract by an additional 1.3{92d3d6fd85a76c012ea375328005e518e768e12ace6b1722b71965c2a02ea7ce} in 2016, while Calgary’s economy is expected to shrink by an additional 1.2{92d3d6fd85a76c012ea375328005e518e768e12ace6b1722b71965c2a02ea7ce} this year. The continual decline in the two cities economies can be attributed to the decline in the price of oil, and the impact of the steep drop has trickled into other sectors of the economy as well.
Furthermore, job loss numbers are also expected to increase in 2016, as Calgary will suffer from an additional 2.1{92d3d6fd85a76c012ea375328005e518e768e12ace6b1722b71965c2a02ea7ce} loss in employment growth, bringing the overall unemployment rate to 7.5{92d3d6fd85a76c012ea375328005e518e768e12ace6b1722b71965c2a02ea7ce} this year. Alarmingly, the 7.5{92d3d6fd85a76c012ea375328005e518e768e12ace6b1722b71965c2a02ea7ce} unemployment rate is actually higher than the national average, a figure that Calgary has not hit since 1987. Moreover, the sectors that are expected to get hit the hardest by the steep decline in oil prices are the trade and construction industries respectively.
Residents of Edmonton will also not fare that much better, as unemployment rates are expected to hit 7{92d3d6fd85a76c012ea375328005e518e768e12ace6b1722b71965c2a02ea7ce} this year; an almost 2 decade high. It should also be noted that the real estate market will also take a subsequent hit from the massive layoffs, as the excess of office space created by all the layoffs will discourage investments in non-residential construction as well as office buildings. De facto, pundits expect a 33{92d3d6fd85a76c012ea375328005e518e768e12ace6b1722b71965c2a02ea7ce} drop in housing starts in Edmonton in 2016, while Calgary can expect a housing start drop of 18{92d3d6fd85a76c012ea375328005e518e768e12ace6b1722b71965c2a02ea7ce} this year.
What’s more, on March 3rd, 2016, Canadian National Resources Ltd reported an 89{92d3d6fd85a76c012ea375328005e518e768e12ace6b1722b71965c2a02ea7ce} drop in quarterly profit ($131 million), due mainly to the steep decline in oil prices. Canadian National Resource Ltd is Canada’s second largest gas and oil producer, and the enterprise is currently projecting capital expenditures ranging from 3.5 to 3.9 billion dollars, in stark comparison to the 4.5 to 5 billion dollar range that they projected in 2015. Annual production values of oil are also expected to drop by 2{92d3d6fd85a76c012ea375328005e518e768e12ace6b1722b71965c2a02ea7ce} this year in comparison to last year, and the Calgary/Alberta based entity’s share prices dropped to 12 cents per share in Q4 2015, compared to $1.09 per share during the same period in 2014. In sum, Canadian National Resources Ltd reported that revenues fell by 36{92d3d6fd85a76c012ea375328005e518e768e12ace6b1722b71965c2a02ea7ce} to 2.79 billion dollars.
Moving beyond the dire economic situation currently facing Edmonton and Calgary, airplane manufacturing is also expected to take a severe hit from declining oil prices. For instance, airplane retirements for Boeing and Airbus fell to only 28 in Q1 of 2016, compared to 104 in Q1 of 2015. In other words, the decline in oil prices has led to a reduction in demand for more energy efficient aircrafts, because they are currently not seen as a priority from a cost perspective.
Globally, the latest numbers indicate that over one million barrels are being oversupplied every day. That is, the oversupply is being caused by the fact that there are insufficient storage areas to store oil. In fact, the situation has become so dire that some experts are suggesting that pumped oil be stored in swimming pools due to insufficient storage spaces. In addition, oil tankers are also being sent on longer voyages to help reduce tanker pile up debacles at junction ports, as 50 oil tankers are currently remaining stationary in the port of Rotterdam, which is the highest figure being reported since 2009. A similar situation is currently taking place in the United States’ largest oil hub, which is based in Cushing, Oklahoma.
The marked drop in crude oil prices has also forced ExxonMobil to cut its capital spending to only 23 billion this year; a 25{92d3d6fd85a76c012ea375328005e518e768e12ace6b1722b71965c2a02ea7ce} drop from the previous year. Russia has also been hit hard by the oil crisis, as the country is currently trying to recover from its own recession. In fact, automotive sales dropped by 36{92d3d6fd85a76c012ea375328005e518e768e12ace6b1722b71965c2a02ea7ce} last year, and massive layoffs in plants like the Avtovaz plant in Tolyatti have forced many workers to leave their homes and move in with their parents to make ends meet.
Unfortunately, the global oil crisis is expected to get worse in the future, as many experts believe that the increase in the adoption rates of electric cars will further reduce the demand for gas guzzling vehicles. To learn more about how electric cars can exacerbate the oil crisis please visit here.
- Published in Blog, Business, Energy, Oil and Gas
Albertans Receive Much Needed Cash Lifeline From Trudeau
Albertans Receive Much Needed Cash Lifeline From Trudeau
– Momentum Public Relations –
Prime Minister Trudeau travelled to Alberta on February 3rd, 2016, to let Albertans know that Ottawa would be prepared to provide up to 950 million dollars in “bail-out” funding in order to help the struggling province deal with its oil crisis and unemployment rates. More specifically, Ottawa would pledge up to 700 million dollars to fund infrastructure projects and add 250 million as a fiscal lifeline if needed. That is, the 250 million dollars that the federal government pledged to Alberta would go towards a fiscal stabilization program that has not been used in quite some time.
As for the $700 million, Trudeau promised to fast-track the money as needed in order to help unemployed Albertans get back on their feet, with funding expected to arrive in a few weeks to a few months. Given the fact that Alberta plans to invest 34 billion dollars in the next 5 years in order to rebuild hospitals and schools that have been overtaxed over the years, the extra funding from Ottawa will help expedite Alberta’s infrastructure project plans while minimizing any obstacles.
Moreover, the meeting between Alberta’s Premier and the Prime Minister could not have come at a better time, as the fiscal prognosis for the fledgling province in 2016 is dire at best. Fortunately, Trudeau’s reaching out to the province will help alleviate some of the tensions between the Liberal Party and Albertans, as the two sides have had a precarious relationship for several decades.
However, while Trudeau’s cash lifeline offer will not go unnoticed, many are still questioning where his party stands on the development of the Energy East Pipeline, as the proposal to build the pipeline has been met with ardent opposition from British Columbia and Quebec. Albertans, on the other hand, have stressed the importance of building a pipeline in Alberta in order for the province to access international oil markets.
Whether Trudeau will concede to Quebec and British Columbia’s demands or side with Alberta remains to be seen, although Trudeau hoped to make inroads on plans regarding climate change, E.I. reforms, and federal infrastructures during his hour-long meeting with Premier Rachel Notley.
In regards to employment insurance reforms, Trudeau promised marked and swift changes that would benefit the citizens of Alberta. For instance, Trudeau stated that getting financial aid in a timely and convenient manner was of the utmost importance, and went on to say that, “Nowhere is [it] clearer that there is a need for that right now and right here in Alberta.” It should also be noted that the restrictions placed on receiving E.I. benefits have been stricter in Alberta compared to other provinces for the longest time, as Alberta has historically enjoyed low unemployment rates until recently.
As such, employees in Edmonton and Calgary must work a minimum of 600 hours in order to qualify for employment insurance benefits and can only receive a maximum of 38 weeks. In comparison, employees in Atlantic Canada are only required to work 420 hours to receive E.I. benefits and can qualify for up to 45 weeks.
What’s more, the diversification of Alberta’s economy as well as its climate change plans were also addressed during the meeting, as Ms. Notley hoped to accentuate the grim economic conditions that the province was currently facing. For instance, Suncor Energy Inc-a notable oil sands monolith-posted a net loss of over two billion dollars in Q4 of 2015 due to asset writedowns. The net loss was attributed to foreign currency exchange losses as well as depressed crude oil prices.
Canadian dollar gains ground while Bank of Canada maintains rates
Canadian dollar gains ground while Bank of Canada maintains rates
Momentum Public Relations – Stephanie Boucher
On January 20th, the Bank of Canada announced that it will maintain its current interest rate at 0.5 percent as it waits to see what the government has in store for the struggling economy.
This decision has been highly anticipated by economists throughout the country, who have had split opinions on whether or not the interest rate would be lowered. It has been an important topic this week as this interest rate has a strong impact on the rate Canadians get from banks and lending institutions when they choose to save or borrow money.
The Bank of Canada Governor Stephen Poloz cut the bank’s benchmark interest rate twice within the last year in an attempt to stimulate the economy. However, lower interest rates make the Canadian dollar less attractive on the world markets, as foreign investors seek a better return elsewhere. A lower dollar means higher import prices, which affects many Canadian small businesses, and also sparks inflation. The decision to keep the rate as is at 0.5 per cent was a safe play, despite other global factors.
According to Poloz, the Bank’s decision to maintain the interest rate was made because the economy, while still struggling, is expected to show signs of improvement later this year. In fact, the Bank of Canada projects that the Canadian economy will grow by 1.5 per cent in 2016 and by as much as 2.5 per cent in 2017. The Bank also expects inflation to rise by about 2 per cent by early 2017.
The price of oil, as well as other commodities, has had a negative effect on the Canadian economy – the Bank expects the economy’s return to above-potential growth to be delayed until the second half of 2016 and moving in to 2017. According to a statement by the Bank of Canada, “The complex nature of the ongoing structural adjustment makes the outlook for demand and potential output highly uncertain. The Bank’s current base case projection shows the output gap closing later than was anticipated in October, around the end of 2017.”
After the announcement, the Canadian dollar rose to 68.89 cents US, and after many ups and downs throughout the day, closed at 69.03 cents US, up 0.44 of a cent.
National employment has been rather unaffected, despite recent reported job losses in the resources sector.
According to economists, the Bank’s decision to maintain the overnight rate will have a minimal impact on mortgage rates for the time being. While mortgage rates have increased slightly over the last few months, to the confusion of many homeowners, they remain steady for now. Experts advise new homeowners and those looking to renew their mortgage to choose a fixed, or locked in rate, one with fixed payments as they forecast mortgage hikes within the next few years.
Now, the ball falls in the court of Finance Minister Bill Morneau, who must deliver a stimulus budget that will boost economic growth in Canada through government spending on infrastructure, public transport, social housing and green energy. This spending will result in much larger deficits than the $10-billion limit promised by the Liberal Party of Canada during their election campaign. The Liberal Party has not disclosed how far beyond the target it will go.
Despite the decision to keep the rates steady this week, the Bank of Canada maintains that the country’s economic environment remains very uncertain. The Bank’s Governing Council maintains that its current stance of monetary policy is appropriate, but cuts to the benchmark overnight interest rate could still happen within the next few months, as early as March.
Sources:
http://www.bankofcanada.ca/2016/01/fad-press-release-2016-01-20/
http://www.cbc.ca/news/business/interest-rate-poloz-1.3411621
Amana (AMA:C) Congratulates IWS CEO on Canada Clean50 Award
Lynn Mueller, Founder and CEO of International Wastewater Systems Receives ‘Clean50’ Award
Amana Copper Ltd. (“Amana” or the “Company“) (CSE:AMA) would like to congratulate Mr. Lynn Mueller, Founder and CEO of International Wastewater Systems (“IWS”) on being recognized with a Canada Clean50 award (“Clean50”).
Canada’s Clean50 is an annual award offering recognition to Canada’s leaders in sustainability for their contributions over the prior two years. The Clean50 are selected from 16 diverse categories that transcend numerous industries, academia, different levels of government, thought leaders and advocates, and are based on accomplishments delivered over the prior two years.
Mr. Mueller was one of two recipients in the ‘Renewable Energy Generation’ category and received the award at the Clean50 Summit held in Toronto on September 23rd, 2015.
Mr. Mueller’s vision for green energy innovation has established IWS as a world leader in wastewater heat recovery systems. IWS technology provides simple and direct heat exchange from untreated waste water, resulting in the most energy-saving, cost-effective and environmentally friendly solutions for heating, cooling and hot water for any building, residential, commercial or industrial. IWS systems are currently being deployed worldwide for public and private sector clients.
Amana and IWS have signed a definitive agreement (see press release dated September 9th, 2015) pursuant to which Amana will acquire 100{92d3d6fd85a76c012ea375328005e518e768e12ace6b1722b71965c2a02ea7ce} of the issued and outstanding common shares of IWS subject to shareholder, regulatory and CSE approvals.
About IWS
International Wastewater Systems was founded by a team of technical and engineering professionals with over 100 years of combined experience in the heating, ventilating and geo-exchange industries. With a focus on wastewater heat recovery we are committed to manufacturing quality products that positively impact our environment, saving resources and unnecessary expense for heating and cooling.
For more info: www.sewageheatrecovery.com/
Canada’s forecast takes hit as IMF cuts global growth outlook again
As your Investor Relations firm, it is our job to keep you posted on the latest market news
By: David Parkinson
Source : Business News Network
The International Monetary Fund has again cut its forecast for both global and Canadian economic growth, as the plunge in oil prices widens the rifts in the world economy.
The IMF’s World Economic Outlook Update (WEO), unveiled in Beijing on Tuesday morning local time, forecast global growth of 3.5 percent in 2015 – slightly higher than last year’s modest 3.3-percent expansion, but down from 3.8 per cent in the IMF’s previous outlook in October. It reduced its 2016 forecast by the same amount, to 3.7 per cent from October’s 4 per cent.
This is the third successive quarterly report in which the IMF trimmed its global growth forecast for the current year.
The international financial body cut its forecast for every major economy except one: The United States. It raised its 2015 forecast for U.S. growth to 3.6 per cent from its October forecast of 3.1 percent and up strongly from 2014’s 2.4 percent. It raised its 2016 U.S. forecast to 3.3 percent from 3.0 percent.
The IMF’s growth forecast for Canada is now 2.3 percent in 2015 and 2.1 percent in 2016, down from its previous call of 2.4 percent in both years. Canada’s 2014 growth was estimated at 2.4 percent.
“Oil exporters, for which oil receipts typically contribute to a sizable share of fiscal revenues, are experiencing larger shocks in proportion to their economies,” the IMF said.
The report said the dramatic drop in oil prices should be a net positive for the world economy. However, exporters of oil and other commodities will be slowed by the sharp price declines – including many emerging-market regions that had been relied upon for strong contributions to global growth.
“Developments since the release of the October WEO have conflicting implications for the growth forecasts. On the upside, the decline in oil prices driven by supply factors … will boost global growth over the next two years or so by lifting purchasing power and private demand in oil importers,” the report said. “However, the boost from lower oil prices is expected to be more than offset by an adjustment to lower medium-term growth in most major economies other than the United States.”
“Our forecasts reflect the increasing divergence between the United States on one hand and the euro area and Japan on the other,” Olivier Blanchard, IMF economic counsellor and director of research, said in remarks prepared for a press conference in conjunction with the report’s release. The IMF noted that this divergence is widening interest rate and currency spreads (in particular, driving up the U.S. dollar and depressing the euro and Japanese yen), further complicating the economic landscape for many countries.
“At the country level, the cross currents make for a complicated picture,” he said.
The IMF projected euro zone growth of just 1.2 percent in 2015, down from 1.4 percent in the October forecast, although up from 2014’s 0.8 percent. For 2016, the IMF forecast growth at 1.4 percent, down from 1.7 percent in the earlier projection.
The agency predicted that Japan, which slipped into recession in the 2014 third quarter, would see growth of just 0.6 percent in 2015, down from its earlier forecast of 0.8 percent. It trimmed its 2016 forecast slightly, to 0.8 percent.
The IMF also warned of slower growth in China, where the government is seeking to reduce the economy’s credit exposure and reorient toward consumer growth. The agency now sees China’s growth slowing to 6.8 percent this year (down from the previously forecast 7.1 percent) and 6.3 percent next year (down from 6.8 percent), compared with 7.4 percent in 2014.
Blanchard did allow that the net benefit of lower oil prices could prove a stronger global economic stimulant than the IMF is currently anticipating.
“This decline may turn out to be a stronger ‘shot in the arm’ than is implicit in our forecasts,” he said. “Our forecasts may turn out to have been a bit too pessimistic. I very much hope so.”
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Harper’s Oil Dilemma
Alberta, Canada’s wealthiest province started 2014 with a booming economy and expected the same for 2015. In retrospect, that might have been the good old days as Alberta’s economic projections in light of the oil crash have dimmed significantly over the last 6 months. Upon Goldman Sachs announcing their dismal oil forecast , oil hit a 5-year low on Monday. The prospect of the proverbial golden goose dying a slow and painful death is causing ripples throughout the Canadian economy. Suncor announced today it will cut 1000 jobs due to low oil prices and slash their capital budget. Many companies such as Shell are following suit . The Canadian housing market could be affected as rising housing prices correlated to the price of oil increasing. The dreaded ‘R’word was uttered today describe Alberta’s fortunes for 2015 and even a mention of a sales tax by Alberta Premier Jim Prentice illustrates how dire the situation is. The oil collapse has the auto industry in Detroit baffled as to what consumers will want from them. The future of the Keystone pipeline is in jeopardy with President Obama saying he would veto should the bill came across his desk. An insightful article on the future of the pipeline explains the political and environmental challenges placed by Stephen Harper’s Conservatives and how it could affect the heart of the Albertan economy.
- Published in Blog, Oil and Gas
U.S. Senate proposal may leave Canada with a Pyrrhic victory on Keystone XL
By:Paul Koring, The Globe and Mail
Canada’s Natural Resources Minster Greg Rickford was on Capitol Hill again Tuesday pitching Keystone XL, as Senate supporters of the controversial pipeline tried to round up sufficient votes to override U.S. President Barack Obama’s threatened veto of any Congressional attempt to force approval of the project to ship Alberta oil sands crude to the Texas Gulf coast. After meeting Senator Joe Manchin, a West Virginia Democrat and Keystone XL backer, Mr. Rickford said: “I thanked Senator Manchin for his outspoken support of the Keystone XL pipeline project, and Canada as the partner of choice to fulfill the U.S. increasing need for crude imports.” But Mr. Manchin’s backing comes with conditions the Canadian Conservative government and TransCanada Corp., the pipeline giant seeking permission to build the $8-billion (U.S.) project, may find tough to accept. The senator – who believes a veto-proof majority can be achieved – says he plans to back amendments proposed by some of his Democratic colleagues. They would ban the export of oil carried by Keystone XL, require that all future purchases of pipe for the project be bought from U.S. steel makers and force payments into the national oil-spill fund from which Canadian oil sands crude is currently exempt.Many Republicans oppose those amendments and none may survive into the final billNor do any of them appear in the House of Representatives Keystone XL approval bill passed last week. All 54 Republicans in the Senate back Keystone XL, but the Canadian government and other advocates of the project need 13 more votes – meaning 13 Democrats – to forge the two-thirds majority of 67 in the 100-seat Senate needed to override a presidential veto.
Achieving that seems unlikely. Currently, nine Democrats back the legislation that would wrest control of the decision from Mr. Obama, who has repeatedly delayed deciding on the project, which opponents claim will massively add to greenhouse gas emissions by spurring extraction of Alberta’s vast bitumen reserves. No final vote on the Keystone XL approval bill is expected in the Senate until at least next week. But in the first full day of debate Tuesday, the bitter and mostly partisan battle over Keystone XL was waged in terms of its geopolitical significance and whether it would hasten global warming. Giving Keystone XL the go-ahead would allow the United States to reduce imports from places such as Russia, Venezuela and Saudi Arabia, Mr. Manchin said, echoing a refrain long made by the Canadian government, which has painted other foreign suppliers as mostly unreliable and hostile to the United States. In contrast, he lauded Canada as “the most stable regime, the best ally we’ve ever had.”
Alabama Republican Senator Jeff Sessions was similarly pro-Canadian. There’s “no better place” to import oil than from “Canada, our friend and neighbor,” he said. Approving Keystone XL, which, when built, could deliver 830,000 barrels a day, would create “an additional supply from an ally of the United States that will bring down the price of oil,” he said. But opponents continued to portray Keystone XL as a project that would benefit Canadian coffers and worsen global warming. Allowing Keystone XL to proceed would send “the dirtiest oil in the world, from the tar stands in Canada to a tax-free export zone so it can be exported,” Massachusetts Democratic Senator Ed Markey said. “That oil should not come to our country, go right through it and out again.”
Source http://www.macleans.ca/politics/ottawa/stephen-harper-oils-worst-enemy/
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