Canadian exporters such as West Fraser Timber Co. are climbing as the central bank’s surprise interest rate reduction weakened the currency, giving the companies an immediate boost while underscoring the deepening risk from the oil-price crash.
While the cut highlighted concerns about the nation’s economic outlook, the benchmark Standard & Poor’s/TSX Composite Index climbed 1.8% yesterday partly on the prospect that a lower Canadian dollar would help companies that price their goods in U.S. dollars. The index rose another 0.6% by 9:38 a.m. on Thursday.
Canada’s stagnating economy could force its central bank to deploy the type of extraordinary stimulus adopted in the U.S., Europe and Japan, according to BlackRock Inc., the world’s biggest money manager.
With a commodity prices collapse that probably sent the country into recession in the first half showing no signs of letting up, the Bank of Canada may need to follow its developed-nation peers with quantitative easing, according to Aubrey Basdeo, BlackRock’s head of Canadian fixed-income.
OTTAWA — It has been just over a year since Benoit Daignault took the reins at Export Development Canada (EDC), the federal agency charged with helping companies fund and expand into new markets.
While much has changed in that time — a domestic economy now struggling to kick-start growth in the midst of an oil-price collapse — the impetus to expand into new markets, not just the United States, must still come from corporate leaders themselves.
Brian Robbins, CEO of automotive and industrial supplier Exco Technologies Ltd., is feeling confident about expanding his company’s business.
Within the last month, Exco has spent more than $20-million opening new facilities in Thailand and Brazil, with another new plant planned for Texas and some “cautious” investment in Canada, Mr. Robbins said. He said there’s solid U.S. demand for Exco’s products and he’s confident the American economy is only going to get better.
TORONTO • Canadian securities regulators are proposing rules to make it faster and cheaper for companies to conduct rights offerings, just days after that issue blew up in a controversy.
Rights offerings are a form of financing in which companies allow their existing shareholders to buy stock at a discounted price to maintain their proportionate stake in the company. It is an extremely fair way to raise capital, as investors avoid dilution.
While Ottawa agreed in Budget 2013 to extend tax breaks for manufacturers for two years, a request by developers of liquefied natural gas terminals on Canada’s West Coast to receive similar tax savings fell on deaf ears.
Before they start crying foul that the West’s energy industry is being shortchanged relative to the Eastern-based manufacturing sector, developers of the new projects should be reminded that their ask showed poor judgment in the first place.
OTTAWA • Even before the federal government delivers its 2013 budget, the writing is already on the wall: Limited economic growth, slower household spending and the same old rock-bottom interest rates.
TORONTO • Limited Brands Inc. investors will find out Wednesday if closing a third of La Senza’s stores over the past year has helped to boost the flagging lingerie chain’s productivity.
But in Canada, retail veterans are more curious about whether Columbus, Ohio-based Limited’s end game is to wind down the once-thriving Canadian banner in favour of its former-U.S. rival-turned-corporate sibling, Victoria’s Secret.