Sandy may cost $50B as storm continues path

Wall Street remained shuttered Tuesday as post-tropical storm Sandy battered New York City for the second straight day, but by early evening the mayor said businesses were working to get things back on track.

Large parts of Manhattan were flooded by late Monday and early Tuesday. Water cascaded over several seawalls in lower Manhattan and a highway close to the island's east side was flooded.

The New York Stock Exchange, Nasdaq and CME exchanges remained closed Tuesday while officials tested contingency plans and backup systems, hoping to ensure trading can resume as normal later in the week.

'I don't think it will have a significant national impact.'—Mark Zandi, Moody's economist

New York City Mayor Michael Bloomberg said Tuesday evening that business in the city was "getting back to normal, at least, where there is electricity."

CNN and other U.S. media reported early Monday morning that the trading floor of the NYSE was under a metre of water.

But a spokesman for the exchange confirmed to CBC News that those reports were untrue. "[That] report was totally wrong," Ray Pellechia said. "No water at all in [the] building or surrounding streets."

By Tuesday afternoon, officials at NYSE had confirmed the exchange is on track to open Wednesday, but defended their initial caution in the matter. "It's a monumental event, and we take it very seriously," said Larry Leibowitz, NYSE's chief operating officer. "It's not a hyped-up drama."

The mayor said at a news conference Tuesday evening that the NYSE "clearly made the right decision in staying closed Monday and today in the interest of safety, and now it believes it's ready for normal operations."

At a Duane Reade drugstore a block or so away from the NYSE building, there were signs of life. One man was buying candles, scented, and asking for extra matches, as another walked out clutching a 12-pack of beer.

Flight cancellations

Airlines cancelled thousands of flights and stranded travellers, businesses face countless lost man-hours and lost sales, while insurers brace for billions in payouts.

All in all, the storm will likely end up causing about $20 billion in property damages and $10 billion to $30 billion more in lost business, according to IHS Global Insight, a forecasting firm.

That would cause a 0.6 percentage point hit to America's GDP this quarter, and top last year's $15.8 billion tally for Hurricane Irene. CoreLogic, a private data provider, estimates there are 284,000 homes worth about $88 billion in the hurricane's path, and about 7 million more have already lost power at some point.

If so, Hurricane Sandy would be among the 10 most costly hurricanes in U.S. history. But it would still be far below the worst — Hurricane Katrina, which cost $108 billion and caused 1,200 deaths in 2005.

"Assuming the storm simply disrupts things for a few days and it doesn't do significant damage to infrastructure, then I don't think it will have a significant national impact," Mark Zandi, chief economist at Moody's Analytics, said Monday.

Experts also note that while natural disasters often hit the economy in the short term, the rebuilding dollars that follow often stimulate the economy to come back stronger than it was before.

Spending to rebuild

"Whatever the magnitude of the economic drag in the near-term, it should prove temporary and result in a rebound in activity in future months," Toronto-Dominion bank economist Beata Caranci said.

Regardless, the storm is likely to make its presence felt in the coming months as more economic indicators trickle out.

"If Florida's hurricane Andrew was any indication, housing related indicators should show significant weakness in the next two to three months," Caranci said.

While some people will be prevented from working due to the damage, others will be required to work longer hours due to emergency and clean-up responses, as well as a potential shifting of production to other regions in the U.S., the bank notes.

"It will remain to be seen how long disruptions to electricity and infrastructure persist, as this could have a larger impact on small businesses, which are more sensitive to extended disruptions," TD said.

Here are some more ways the world's largest economy is being affected by the storm:

• Air travel in the Northeast is all but stopped for at least two days. Airlines cancelled more than 10,000 flights for Monday and Tuesday from Washington to Boston. The disruptions spread across the nation and overseas, stranding passengers from Hong Kong to Europe. Carriers could suffer a short-term hit to earnings as they spend more to shuffle crews and planes. The airline cancellations have already surpassed those from Hurricane Irene last August and are on par with those from a major snowstorm that socked the East Coast early last year.
• Three nuclear plants were shut down as a precaution, and authorities dispatched monitors to examine 11 others for signs of stress. The Salem Unit 1 in southern Delaware, Nine Mile Point and Indian Point 3 in N.Y. were all shuttered. The fear is that Sandy could disrupt the flow of water that the plants need to intake to stay cool, but as of yet there's no evidence that's happening.
• The nation's major retailers are expected to lose billions of dollars, and the losses could extend into the crucial holiday shopping season. Sales at department stores, clothing chains, jewellers and other sellers of non-essential goods are expected to suffer the most. "Retail sales could have a distorted pattern, with sales up for emergency supplies, food and construction materials, but weakness for many other discretionary items," Caranci noted.
• Power outages and disruptions in major East Coast cities "may take a toll on demand unlike anything we have seen before," Phil Flynn, a senior market analyst for Price Futures Group, wrote in a report. Some of the biggest oil refineries in the Northeast were closed, and others were running at reduced capacity. As businesses closed and drivers stayed home, demand for gasoline was expected to fall.
• The cost to insurers is expected to rival the insured damage from Hurricane Irene last year. Damage from Irene cost insurers roughly $5 billion, according to Sterne, Agee & Leach Research. Because the storm is hitting a highly populous region, with "one of the highest concentrations of wealth in the world," the damages are likely to run into the billions, say analysts at Morgan Stanley.

With files from The Associated Press

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GM quarterly profit falls 14%

A turnaround in South America and a rosier outlook in Europe helped push General Motors shares up in premarket trading Wednesday, even though the company's third-quarter net profit fell 14 per cent.

GM said it earned $1.48 billion US from July through September, down from $1.73 billion a year earlier, as European pretax losses widened and North American profits fell.

But South America swung to a big profit and GM posted better-than-expected results internationally outside of China.

GM said the quarterly performance, while down from last year, is a sign that steps it has taken to fix some troubled business units are working.

The company was profitable in four of five of units, with Europe the only exception. The Detroit company earned 89 cents per share, compared with $1.03 per share a year ago.

Revenue grew 2.5 per cent to $37.6 billion. Excluding one-time items, GM made 93 cents per share, easily beating Wall Street expectations of 60 cents.

That drove GM shares up $1.06 or 4.6 per cent, to $24.34 in trading early Wednesday.

Chief Financial Officer Dan Ammann said the improved performance in South America and countries like South Korea and Australia show that moves to fix the business are working.

"We can make those improvements and deliver the results," he said.

The company also predicted its fourth-quarter pretax earnings would be about the same as last year's $1.1 billion.

Firm expects to break even in Europe

GM expects to break even in Europe by the middle of the decade as it rolls out new, more appealing products. And the company expects a full-year European pretax loss of $1.5 billion to $1.8 billion in 2012, improving slightly in 2013.

That's a little more than double what GM lost in Europe last year. Vice Chairman Steve Girsky will give details of the European restructuring plans later Wednesday.

GM lost $478 million pretax in Europe last quarter, compared with a $292 million loss a year earlier.

In North America, pretax profit fell 17 percent to $1.8 billion as lower pension income and higher costs for warranty claims offset lower raw material and freight costs.

But in South America, the company swung from a $44 million loss last year to a $114 million profit on the strength of new models.

And GM's international operations, fueled mainly by areas outside of China, nearly doubled its pretax profits to $689 million.

The company is confident enough to predict break-even results in Europe because of significant investment in new products including the Mokka small SUV and Adam small car, Ammann said.

'We're not banking on a sharp turnaround in the European economy.'—Dan Ammann , GM CFO

The company already has 40,000 orders for the Mokka, he said.

"We have to lead with product in order to sustain and grow the top line," he said. GM also is making progress on reducing factory capacity and costs, which will be detailed for analysts in a conference call on Wednesday, he said.

And it isn't expecting improvement in Europe's troubled economy anytime soon.

"We're not banking on a sharp turnaround in the European economy at this point," Ammann said.

The company also said about 30 per cent of its U.S. salaried retirees took lump-sum payments instead of monthly pension checks.

It also expects to close a deal next month to shift liability for its salaried pension plan to an annuity managed by The Prudential Insurance Co.

The actions will cut GM's pension liability by $29 billion, $3 billion more than the original estimate of $26 billion, the company said.

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PotashCorp in takeover talks with Israeli chemical firm

Potash Corporation of Saskatchewan is in talks with the Israeli government about taking over Israel Chemicals.

PotashCorp already owns more than 13 per cent of the Israeli firm, making it ICL's second-largest shareholder as it is.

The company's CEO Bill Doyle has met with Israeli Prime Minister Benjamin Netanyahu to promote the idea of Potash formally merging with the $15-billion firm.

"The company confirms it is aware that Canada's Potash is in talks with various government agencies that included a meeting with the prime minister regarding examining the possibility of merging ICL with Potash," ICL said in a statement to the Tel Aviv stock exchange where its shares trade.

Deal could cost $13B

PotashCorp confirmed the meeting in a similar release. The Saskatoon-based fertilizer giant says no deal has been formulated, nor would it make any assurance any deal can be reached.

Among numerous other fertilizer assets, ICL currently controls about 11 per cent of the world's potash industry. ICL shares gained almost five per cent to 4854 on the Tel Aviv stock exchange. At those prices, for PotashCorp to increase its stake to 100 per cent, it could cost upwards of $13 billion.

PotashCorp shares gained slightly on the news, up a little over one per cent to trade at $40.40 on the Toronto Stock Exchange

PotashCorp was the target of a multibillion-dollar takeover offer from Australian miner BHP Billiton in 2010 that was ultimately nixed by the federal government.

Canada stopped that deal under the Investment Canada Act. Any takeover of an Israeli company would require similar government approval under the Government Companies Authority.

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Canadian economy shrank in August

Canada's economy contracted for the first time in six months, with August figures showing it shrank 0.1 per cent compared to July.

Statistics Canada said Wednesday that the service sector was unchanged, but led by declines in mining, oil and gas, and manufacturing, the goods-producing sector shrank by 0.5 per cent.

Economists had been expecting a slight gain of 0.2 per cent overall.

With the poor showing, Canada posted its slowest annual pace of growth in more than two years.

Broad-based but small declines

Overall, the data agency noted shrinking output in 10 out of 18 industrial sectors.

"This was no fluke," said Douglas Porter, deputy chief economist at BMO Nesbitt Burns.

"While some temporary factors weighed on activity in August, the main message here is that the economy is struggling to churn out any growth whatsoever."

He expects a "modest rebound" for September, but sluggish growth for the rest of the year.

With files from The Canadian Press

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Boo! 9 surprising facts about Halloween in Canada

It's Halloween on Wednesday, and while the remnants of hurricane Sandy are threatening to make it a cold, wet and windy evening across much of the eastern part of the country, the annual candy and fright-festival is doubtless going to be as popular as ever.

To mark the occasion, the numbers-obsessed folks at Statistics Canada have compiled a list of some surprising Halloween-related numbers:

• 3,734,401 — Number of trick-or-treating aged kids in Canada, which the agency defines as those between five and 14 years old.
• 13.3 million — the number of Canadian households across Canada that could potentially be mined for candy.
• $21.6 million — the total value of all costumes manufactured in Canada last year.
• 88,400 tonnes — the amount of pumpkins grown in Canada last year.
• 100 — the number of businesses across Canada in the costume-renting business.
• $355.9 million — the amount of candy sold across Canada last October.
• $276.2 million — the average amount of candy sold across Canada in other months.
• 850 — the number of Canadians who reported that they were Satanists in 2001, up from 340 in 1991.
• 9,575 — the number of Canadians who reported their religion as "Wicca" in 2001.

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NYSE shuttered for 2nd day as Sandy pounds away

Wall Street remained shuttered Tuesday as post-tropical storm Sandy battered New York City for the second straight day.

The New York Stock Exchange, Nasdaq and CME exchanges remained closed while officials tested contingency plans and backup systems, hoping to ensure trading can resume as normal later in the week.

Large parts of Manhattan were flooded by late Monday and early Tuesday. Water cascaded over several seawalls in lower Manhattan and a highway close to the island's east side was flooded.

CNN and other U.S. media reported early Monday morning that the trading floor of the NYSE was under a metre of water.

But a spokesman for the exchange confirmed to CBC News that those reports were untrue. "[That] report was totally wrong," Ray Pellechia said. "No water at all in [the] building or surrounding streets."

Officials say they hope the exchange can open and get back to normal business on Wednesday. "It's a monumental event, and we take it very seriously," said Larry Leibowitz, NYSE's chief operating officer. "It's not a hyped-up drama."

At a Duane Reade drugstore a block or so away from the NYSE building, there were signs of life. One man was buying candles, scented, and asking for extra matches, as another walked out clutching a 12-pack of beer.

Flight cancellations

Airlines cancelled thousands of flights and stranded travellers, while insurers brace for payouts estimated to be in the $5 to $10 billion range, catastrophic loss modelling firm Eqecat said.

The company's preliminary estimates are that the total damage will range between $10 billion and $20 billion. That could top last year's $15.8 billion tally for Hurricane Irene. CoreLogic, a private data provider, estimates there are 284,000 homes worth about $88 billion in the hurricane's path.

If so, Hurricane Sandy would be among the 10 most costly hurricanes in U.S. history. But it would still be far below the worst — Hurricane Katrina, which cost $108 billion and caused 1,200 deaths in 2005.

"Assuming the storm simply disrupts things for a few days and it doesn't do significant damage to infrastructure, then I don't think it will have a significant national impact," Mark Zandi, chief economist at Moody's Analytics, said Monday.

Experts also note that while natural disasters often hit the economy in the short term, the rebuilding dollars that follow often stimulate the economy to come back stronger than it was before.

Here are some more ways the world's largest economy is being affected by the storm:

• Air travel in the Northeast is all but stopped for at least two days. Airlines cancelled more than 10,000 flights for Monday and Tuesday from Washington to Boston. The disruptions spread across the nation and overseas, stranding passengers from Hong Kong to Europe. Carriers could suffer a short-term hit to earnings as they spend more to shuffle crews and planes. The airline cancellations have already surpassed those from Hurricane Irene last August and are on par with those from a major snowstorm that socked the East Coast early last year.
• Three nuclear plants were shut down as a precaution, and authorities dispatched monitors to examine 11 others for signs of stress. The Salem Unit 1 in southern Delaware, Nine Mile Point and Indian Point 3 in N.Y. were all shuttered. The fear is that Sandy could disrupt the flow of water that the plants need to intake to stay cool, but as of yet there's no evidence that's happening.
• The nation's major retailers are expected to lose billions of dollars, and the losses could extend into the crucial holiday shopping season. Sales at department stores, clothing chains, jewellers and other sellers of non-essential goods are expected to suffer the most.
• Power outages and disruptions in major East Coast cities "may take a toll on demand unlike anything we have seen before," Phil Flynn, a senior market analyst for Price Futures Group, wrote in a report. Some of the biggest oil refineries in the Northeast were closed, and others were running at reduced capacity. As businesses closed and drivers stayed home, demand for gasoline was expected to fall.
• The cost to insurers is expected to rival the insured damage from Hurricane Irene last year. Damage from Irene cost insurers roughly $5 billion, according to Sterne, Agee & Leach Research. Because the storm is hitting a highly populous region, with "one of the highest concentrations of wealth in the world," the damages are likely to run into the billions, say analysts at Morgan Stanley.

With files from The Associated Press

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TransCanada profit lower

TransCanada Corp. third-quarter profit was down from the same time last year, falling slightly more than analysts had anticipated as improved earnings from the Keystone pipeline were offset by down time at key power plants.

The Calgary-based pipeline operator's net income was $369 million or 52 cents per share, down from $386 million or 55 cents per share.

Another measure of profitability, called comparable earnings, dropped more to $349 million or 50 cents per share from $416 million or 59 cents per share.

The more closely watched comparable earnings missed a Thomson Reuters consensus estimate by two cents per share.

TransCanada says reduced earnings at from the Bruce Power nuclear generation complex in Ontario, its Western Power holdings and certain natural bas pipelines more than offset higher earnings from the Keystone oil pipeline.

On other measures including net earnings and revenue, TransCanada was more in line with analyst estimates.

Revenue for the three months ended Sept. 30 was $2.123 billion, up from $2.04 billion in the third quarter of 2011.

"TransCanada's diverse, high-quality energy infrastructure assets performed well in the third quarter," said Russ Girling, TransCanada's president and chief executive officer.

"While the majority of our assets continued to generate stable and predictable earnings and cash flow, plant outages at Bruce Power and Sundance A along with a lower contribution from certain natural gas pipelines did adversely affect our financial results.

Earnings just below expectations

"Looking forward, TransCanada is well positioned to grow earnings, cash flow and dividends as we complete our current capital program, benefit from a recovery in natural gas and power prices and secure attractive new growth opportunities."

Analysts polled by Thomson Reuters were on average expecting earnings per share of 51 cents and revenues of $2.1 billion.

TransCanada announced a partnership Monday with Phoenix Energy Holdings Ltd. to build a $3-billion pipeline connecting an emerging oilsands region to the Edmonton area.

The project — split 50-50 with Phoenix, a unit of China National Petroleum Corp. — would ship 900,000 barrels per day of crude oil south and 330,000 barrels per day of bitumen-thinning diluent north to the sites.

The growing presence in the inter-Alberta oilsands market comes as TransCanada looks to ship more Canadian crude south of the border.

The company began work this summer on a US$2.3-billion crude pipeline connecting an oil storage hub at Cushing Okla. to Texas refineries. It's expected to start up in mid to late 2013.

A supply glut at Cushing has dampened U.S. oil prices, which has hurt the bottom lines of North American producers.

TransCanada's proposal — along with rivals' similar projects — aims to lessen that discount by connecting Cushing crude to the lucrative Gulf Coast refining market.

Pipeline decision expected in new year

The Gulf Coast pipeline was initially part of TransCanada's $7.6-billion Keystone XL proposal, which would have sent Alberta crude to the Gulf via six U.S. states.

The U.S. State Department denied a permit for that project in its entirety in January. It said it rejected the pipeline because Republican manoeuvring to speed up the process, not based on the merits of the project itself. The administration said it needed more time to review a new route through Nebraska to address ecological concerns.

After the decision, TransCanada opted to go ahead with the southern part of Keystone XL first, since it doesn't need a federal permit to go ahead.

In May, TransCanada submitted a new application with the revised Nebraska route to the State Department for the northern part of the pipeline, which would run from the Canada-U.S. border in Montana to Steele City, Neb. Approval for the Canadian portion has been in-hand for years.

A decision on the northern portion is expected early in the new year.

Critics of Keystone XL argue the project would increase U.S. dependence on "dirty" oilsands crude and cause harm to the American heartland in the event of a spill.

Supporters, however, say the project will offer a big boost to the U.S. economy and reduce the amount of crude the United States has to import from unfriendly regimes.

TransCanada is best known as North America's largest natural gas shipper with a vast network of pipelines criss-crossing North America. It also has power generation assets across North America.

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CIBC downplays likelihood of U.S.-style housing crash

CIBC World Markets economist Benjamin Tal says he continues to believe that a U.S.-style real estate meltdown isn't in the cards for Canada.

Tal says in a new report that even recently released data about high levels of Canadian consumer debt aren't proof that there were be a sudden, big drop in home prices.

He agrees that house prices will probably fall over the next year or two but insists comparisons with the U.S. real estate crash aren't warranted.

Tal says that Canada's debt-to-income ratio has just broken the U.S. record set in 2006 but says other countries have had even higher levels without a crash.

He says the U.S. market bubble was partially fuelled by speculative buying — something that has been less of an issue in Canada.

The deputy chief economist for CIBC World Markets has repeatedly downplayed more extreme warnings about how much the Canadian real estate could be overvalued.

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Youth unemployment outlook not so bleak

Employment prospects for younger Canadians looking for work are not as dismal as widely believed, a report released by the Certified General Accountants Association of Canada today suggests.

The report argues that the peak unemployment rate among those aged 15 to 24 peaked at 15.2 per cent during the latest recession, lower than the high of 19.2 per cent in the 1983 downturn and 17.2 per cent in 1992.

And young people tended to find work faster than mature workers.

In 2011, it says, 46.8 per cent of unemployed young people found a job within four weeks, compared with 27 per cent of mature job seekers.

The study also suggests the quality of jobs for young people has been improving during the recovery.

Young people found 32,500 higher-wage jobs over the three years to October 2011 while the number for mature workers contracted by 0.7 per cent.

Underemployment bigger issue

A bigger challenge, the report warns, is underemployment of the young, as the proportion of those employed in lower-skilled occupations remained unchanged between 1990 and 2011, despite an increase in educational attainment.

Underemployment, it says, leads to loss of skills, knowledge and abilities, lower income, job dissatisfaction and emotional distress, which may, in turn, have health effects.

The CGA-Canada recommends educators and employers cooperate better in tailoring training to meet the needs of business.

It also suggests governments strive to improve Canadian competitiveness, in order to promote an increase in higher-paying jobs.

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Swiss bank UBS to cut up to 10,000 jobs

Swiss banking giant UBS AG is to cut as many as 10,000 employees, or some 15 per cent of its staff, to drastically shrink its ailing investment bank.

The news of the layoffs came as Switzerland's biggest bank posted another big loss for the third quarter.

It said Tuesday that the job cuts are part of a strategy to shore up profits. As a result, UBS said it needs to reduce its headcount to "around 54,000" by 2015, down from its current 64,000 employees in 57 countries.

Some 7,500 jobs are to be cut mainly in London and the United States, where UBS has a prominent building and trading operations in Stamford, Conn., near New York City.

The other 2,500 cuts are to be in Switzerland.

Investors cheered the move and the stock was trading 5 per cent higher Tuesday in Zurich at 13.80 Swiss francs.

That's on top of the 7.3 per cent rise on Monday amid speculation over the cuts. The announcement of the job cuts came as the Zurich-based bank posted a loss of 2.17 billion Swiss francs ($2.31 billion Cdn) in the third quarter, in contrast to last year' equivalent net profit of 1.02 billion Swiss francs.

UBS blamed the loss on a 3.1 billion francs charge at the investment bank and an 863 million francs hit linked to an accounting rule on how banks must value their debt.

Banks can post gains if the value of their debt falls, because it would theoretically become cheaper for the bank to repurchase that debt. But the rule also says that when a bank's debt increases, it must take a write-down because it would theoretically have to pay more to buy back its own debt on the open market.

In what it called "a significant acceleration" in its transformation, the bank said it would sharpen its focus on the investment bank and appoint a new executive, Andrea Orcel, formerly of Bank of America Corp., to lead it.

The current co-head of the investment bank, Carsten Kengeter, is stepping down from the group's executive board to unwind the non-core assets.

UBS said it also plans to save 3.4 billion francs in additional costs through 2015, but that the reorganization will result in restructuring charges of 3.3 billion francs over the next three years including about a half-billion francs in the fourth quarter.

UBS CEO Sergio Ermotti said the investment unit, which has been hit by a series of costly blunders in recent years, will "continue to be a significant global player in its core businesses."

New rules leave banks less cash

But tighter industry-wide requirements for banks to increase their capital cushion also have hurt profitability as banks have less cash to invest.

"It can't get better than this point for us to act," he told reporters. Ermotti, who took over in November after the discovery of unauthorized trading last year, has been downsizing the investment bank to meet stricter capital requirements and shrinking profits due largely to Europe's sovereign debt crisis.

Former UBS trader Kweku Adoboli has been facing trial in London this month on charges of committing fraud that cost the bank $2.3 billion.

He has told the jury that the losses came after senior traders persuaded him to change from a bearish to a bullish point of view in July 2011. But the bank also has been under fire on other fronts. In 2008, it was forced to seek a bailout from the Swiss government when it was hard hit by the financial crisis and its fixed-income unit had more than $50 billion in losses.

UBS is one of several global banks being investigated in the U.S. and other countries for alleged rigging of benchmark interest rates known as Libor, or London Interbank Offered Rate.

In April, Ermotti said Switzerland's tax disputes with the United States and some European nations are "an economic war" putting 20,000 jobs at risk.

Switzerland has been trying to shed its image as a tax haven, signing deals with the United States, Germany and Britain to provide greater assistance to foreign tax authorities seeking information on their citizens' accounts in the Alpine nation.

But the tax agreements have drawn fire from Switzerland's nationalist People's Party, which won more than a quarter of the vote in last year's general election, with some lawmakers saying they will try to block the treaties through referendums.

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Pfizer to cut 300 jobs, mostly at Montreal office

Pharmaceutical giant Pfizer has announced it's cutting about 300 jobs across Canada, most of them in Montreal.

Julie-Catherine Racine, a spokesman for Pfizer Canada, said Sunday that the cuts will be spread across several locations but the majority will be at the company's headquarters in the Montreal suburb of Kirkland.

"After an extensive and rigorous review of our organizational structure and of the competencies required for the future, I can confirm that Pfizer in Canada has undergone a restructuring in various parts of its Canadian business," Racine said in a statement.

In total, about 11 per cent of the company's total Canadian workforce will be eliminated, she said.

The company recently completed a $31.7-million upgrade to its Montreal manufacturing and distribution centre. The Quebec government contributed $2.7 million to that project.

Pfizer employs 2,700 people across Canada, including 1,800 in Quebec.

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Kenney's economic immigration changes praised, scorned

As Immigration Minister Jason Kenney prepares to table a new immigration levels plan for 2013 this week, he has much to lay claim to in Canada's restructured immigration system.

Kenney's most commonly proclaimed achievement has been to move the country toward more efficiently accepting migrants who can best contribute to the Canadian economy. That shift will be visible yet again in this year's target levels across all categories of economic immigrants.

A promised final recalibration of the points system that governs the foreign skilled worker category was also set to be unveiled this week, but that announcement has been pushed back to January.

Still, most of the planned changes to the points system are already widely known: They will place increased weight on youth, job skills and, most importantly, strong English- or French-language skills.

The new system will also provide for better pre-screening of foreign education credentials. And there will be some new streams added, including a long-needed "skilled trades" stream that will address the large trades gap.

Wait time cut by years

In the meantime, the government has fixed the processing times, wrangling them down to less than a year. Under the old system they stretched in some cases to nearly a decade.

Immigration Minister Jason Kenney has earned both praise and criticism for changes to the way Canada handles economic immigrants. (CP file photo)

The willingness to limit the intake is the reason processing times are finally down, and it is the most effective measure Kenney has taken, according to Vancouver immigration lawyer Richard Kurland.

"That single measure, while politically unpopular, fixes Canada's immigration system, because no longer will we take in a year more files that we can process in a year," Kurland told CBC.ca. "That guarantees no more backlogs. It's common sense, but no previous government had the chops to do it."

Overall, Kurland added, the foreign skilled workers category has undergone a major fix.

"It will be less expensive to process more files, and the quality of those files is 'higher grade,' because the bar was raised for language skills," he said.

As for the backlog of files received under the old system, last spring Kenney made another controversial move: a plan to delete the backlog of some 280,000 foreign skilled worker applications. That stack of files has been an albatross, sitting stagnant for years with no responsiveness to current labour market needs. Some applicants have languished in the queue nearly a decade.

Under Kenney's plan, those whose files had not yet been opened will be refunded their application fees.

However, to those whose files were about to be processed, the move appeared grossly unfair. They have launched a legal challenge and it's not yet clear what the outcome will be.

Observers generally agree that some improvements to the system include:

• The expansion of the Provincial and Territorial Nominee programs: Thus far, most provinces have proven more adept at choosing the people with needed job skills than Ottawa has been at choosing them through the foreign skilled worker category. Expect to see those levels increase or remain steady for another year in a row.
• Creation of the Canada Experience Class: No longer do the best and brightest foreign students and skilled workers who already have experience in Canada have to leave the country in order to reapply for permanent residency. Now, they can transition into becoming Canadians while they continue to contribute to the Canadian economy.

Still, for many workers in Canada, there is no easy transition to residency despite months or years of backbreaking labour here. It's a problem critics say must be considered when assessing how well Kenney has shifted the country's focus to immigration as an economic tool.

Barriers remain for temporary workers

While some temporary workers, notably in Manitoba, have gained the help they need to transition to permanent residency, a new collection of essays written by Canadian academics, documents the overwhelming barriers many temporary migrant workers face in trying to become residents and citizens of Canada.

Not only that, the increasing numbers of temporary foreign workers who have few rights and little stake in the nation's political life are creating a two-tiered system that's undermining Canada's traditionally equitable treatment of immigrants.

That's the warning issued in "Legislated Inequality: Temporary Labour Migration in Canada," co-edited by University of Ottawa professor Patti Tamara Lenard.

Lenard says it clearly documents what had long been suspected: Temporary workers in Canada are vulnerable to abuse. That runs counter to the driving ethos of Canada's decades-old immigration system, in which immigrants are viewed as "full and equal members of our political community." That sense of community has, she argues, contributed to Canada's success.

"Where migrants are admitted on temporary visas — in particular those migrants admitted to work on visas that do not permit the transition to citizenship [or where this transition is difficult] — we are undermining this basis of our success," Lenard said.

In particular, Lenard said, the collection illustrates that two conditions of temporary labour in Canada create systemic inequality: "One, migrants are not permitted to transition to permanent residence or citizenship, and so are treated as expendable; and two, they are not permitted to change employers, which means they are denied one of the main ways in which employees can protect their rights."

The essays are based on research and interviews with migrant labourers. They found that in addition to facing barriers to becoming permanent residents, even if they do achieve that goal migrant workers continue to struggle to improve their economic lot. They remain at the "bottom tier" of the economic immigration system.

Temporary workers have little to no access to supports such as settlement services to help them integrate, even if they should want to transition to permanent residency.

"Temporary migrants are not entitled to these services, so even where they can manage to stay permanently, they do not have access to the standard help in integrating that immigrants have," Lenard said, adding a serious policy change is required to give these workers more rights and more support.

Lenard argues the numbers are worrisome: For several years Canada has admitted more temporary foreign workers than economic immigrants in all categories, including foreign skilled workers and Canada experience class. Last year, the country admitted 190,679 temporary migrant workers, compared with 157,000 economic immigrants.

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Sandy could cause $45B hit to U.S. economy

New York's financial centre is effectively shut down in anticipation of hurricane Sandy, a powerful storm with the potential to seriously disrupt functioning in the world's largest economy.

The New York Stock Exchange and rival exchange operators Nasdaq OMX Group and CME Group jointly decided to shut down on Monday, as the storm nears landfall and threatens as many as 60 million people on the U.S. eastern seaboard.

Floor trading had previously been announced before Sunday, when the exchanges extended the shutdown to include electronic trading. It's the first weather-related shutdown on American's benchmark stock exchange since 1985.

Wider impact than Irene

The shutdown came on the heels of New York citizens facing mandatory evacuations from designated zones starting Sunday night.

As of 10 a.m. eastern time on Monday, the eye of the storm was roughly 500 kilometres offshore.

As much of 25 per cent of the U.S. economy could be affected, which could mean up to $45 billion in losses, business professor Peter Morici said.

"Hurricane Sandy will have a devastating impact on life and property," Morici said Monday. He notes that the last U.S. storm with a comparable impact was likely hurricane Irene in August 2011.

Estimates for Irene's impact at the time were roughly $7 billion in losses, but the final toll ended up being closer to $20 billion, Morici noted. "It seems likely that Sandy will impose greater destruction of property," he said.

But he added that disasters like that tend to be followed by a round of spending on rebuilding infrastructure, which can have a stimulative effect on the economy.

"Disasters can give the ailing construction sector a boost, and unleash smart reinvestment that actually improves stricken areas and the lives of those that survive intact," he said.

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Petronas extends Progress Energy takeover offer

The Canadian arm of a Malaysian state-owned oil company has extended the deadline for its takeover bid for Progress Energy Resources Corp. in hopes it will be able to overcome Ottawa's objections to the $6-billion deal.

Petronas Canada says the deadline had been extended by 30 days to Nov. 30 and may be extended again.

However, the two companies said Monday they have met with Industry Canada and plan to submit a revised proposal in hopes of winning approval.

One month extension

"As noted in the release by the minister, Petronas Canada has up to 30 days from the date of the announcement to make any additional representations and submit any further undertakings," the companies said in a joint statement.

After Progress accepted Petronas' initial $20.45-per-share bid earlier this year, another unidentified bidder made an attempt at a rival bid that Petronas trumped by increasing its offer to $22 per share.

Financial analysts have suggested that if the Petronas deal falls through, the likes of ExxonMobil or U.K. gas giant BG Petroleum may also be potential buyers.

The Petronas-Progress decision comes as Ottawa also weighs the more politically troublesome $15.1-billion takeover of Nexen Inc. by China National Offshore Oil Co.

The Investment Canada Act review of the CNOOC-Nexen deal by Industry Minister Christian Paradis is set to end on Nov. 11, though it can be extended by 30-day increments with the buyer's consent.

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Penguin, Random House publishing merger finalized

Two of the world's biggest publishing houses are to link up in a deal that will bring the writings of classics like George Orwell's 1984 and this year's literary phenomenon Fifty Shades of Grey under one umbrella.

Confirmation that Pearson will merge its Penguin Books division with Random House, which is owned by German media company Bertelsmann, will create the world's largest publisher of consumer books, with around a quarter of the market.

As well as publishing books from authors such as John Grisham, Random House scored a major hit this year with E.L. James' Fifty Shades. Penguin has a strong backlist, including Orwell, Jack Kerouac and John Le Carré.

The two companies said Monday that Bertelsmann would own a controlling 53 percent share of the joint venture, which will be known as Penguin Random House.

Bertelsmann would keep full control of Verlagsgruppe Random House, its trade publishing business in Germany, and Pearson would retain the right to use the Penguin brand in education.

The combined company will control 26 per cent of the global consumer publishing market, leaping ahead of the 17 per cent share of French publisher Lagardere, according to research by Espirito Santo Bank.

News Corp. interest

The announcement may lay to rest the ambition of Rupert Murdoch's News Corp. of netting Penguin. Reports over the past couple of days have indicated that News Corp. has expressed an interest in buying Penguin for 1 billion pounds ($1.6 billion US) in cash. News Corp. owns HarperCollins, another big publishing house.

Under the terms of the deal, Random House worldwide chief executive Markus Dohle will be CEO of the new group while Penguin's CEO John Makinson will be the chairman of its board of directors.

'The two publishers will be able to share a large part of their costs, to invest more for their author and reader constituencies and to be more adventurous in trying new models in this exciting, fast-moving world of digital books and digital readers'—Marjorie Scardino, Pearson

"Together, the two publishers will be able to share a large part of their costs, to invest more for their author and reader constituencies and to be more adventurous in trying new models in this exciting, fast-moving world of digital books and digital readers," said Marjorie Scardino, chief executive of Pearson.

And Bertelsmann's Dohle said the link-up will "create a publishing home that gives employees, authors, agents, and booksellers access to unprecedented resources."

The closing of the deal is scheduled to take place in the second half of 2013 following regulatory approval.

Fighting 'gorilla of the book business'

"We believe the tie-up is a sensible one, although it is clearly a defensive response to the long-term pressures affecting the industry, including dramatic growth in digital retail channels, self-publishing and digital reading," said Jonathan Jackson, head of equities at Killik & Co.

Because of the digital challenge, analysts at Jefferies International said they would have preferred Pearson to sell off Penguin altogether.

"The gorilla of the book business is no publisher, it's Amazon and it will stay that way," they said in a research note.

Pearson said the deal does not require approval by shareholders; Bertelsmann is privately owned. Pearson shares were down 1 per cent in midmorning trading in London.

The Financial Times, a Pearson publication, reported Monday that News Corp. had approached Pearson "at the highest level" about a possible cash offer for Penguin. The Sunday Times, owned by News Corp., reported that Murdoch was prepared to offer 1 billion pounds in cash.

Pearson declined to comment on the possible interest of News Corp.

In 2011, Random House reported revenues of 1.7billion euro ($2.2 billion US) and operating profit of 185 million euro. Penguin had revenues of 1 billion pounds and an operating profit of 111 million pounds ($178.7 million US).

Pearson meanwhile reported that its operating profit in the first nine months of the year fell 5 per cent although revenue increased by 5 per cent. Revenue from Penguin was down 1 per cent on a constant currency basis.

The company attributed the profit drop to its sale last year of its half share of FTSE International, a joint venture with the London Stock Exchange.

The Bertelsmann deal is part of Pearson's strategy of focusing more on its education business. Penguin accounts for about 10 per cent of the company's book sales.

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Royal Bank subpoenaed in LIBOR probe

There are reports that Royal Bank of Canada has been served with a subpoena from U.S. state officials as part of their probe into the possible manipulation of a key benchmark used to set interest rates.

The Wall Street Journal and other business publication report the subpoenas were issued to nine banks, including RBC, in August and September, according to an unidentified person familiar with the investigation.

That brings to 16 the number of banks served with subpoenas, including seven that had become public earlier.

Global investigation

The U.S. investigation by the New York and Connecticut attorneys general is part of a wider probe in several countries that stems from a major U.K. bank's admission that it had provided false information used to set the LIBOR rate.

RBC is Canada's largest bank, with operations in major financial centres around the world including London.

The bank said last summer that it followed the rules in submitting information for compiling the London Interbank Offered Rate, which is used widely as a benchmark to set interest rates on business and consumer debts.

That assurance was repeated Friday in RBC's response to the news reports.

"We have determined that our Libor submissions reflected our cost of funds," said Gillian McArdle, head of communications for Canada at RBC Capital Markets.

Rate-fixing alleged

The rate is set by gathering information from a small number of large banks, using a system that's intended to prevent any one member of the group from manipulating the rate.

Questions about how LIBOR is operated arose after Barclays Bank agreed to pay a record $450 million fine to settle allegations its traders had manipulated submissions to LIBOR.

While Barclays actions by themselves were probably insufficient to affect LIBOR, there authorities in Britain and elsewhere have launched probes to see if it was a more widespread problem.

Canada's competition bureau and other Canadian regulatory bodies launched their own probes in light of the Barclay's revelations but there have been no allegations levelled against RBC.

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Moody's reviews 6 Canadian banks for downgrade

The Bank of Montreal was among six Canadian banks Moody's placed on review for a possible downgrade. (CBC)

Bond rating company Moody's Investors Service today said it would review the long-term ratings of six Canadian banks with the possibility of downgrading their creditworthiness.

Moody's cited "concerns about high consumer debt levels and elevated housing prices" among its reasons, saying the banks are more vulnerable to a downturn in the Canadian economy than in the past.

The six include Bank of Montreal, Bank of Nova Scotia, Caisse Centrale Desjardins, Canadian Imperial Bank of Commerce, National Bank of Canada and Toronto-Dominion Bank.

The Bank of Montreal's current Moody's rating is Aa2, the Bank of Nova Scotia's is Aa1, Caisse Centrale Desjardins' is Aa1, the CIBC's Aa2, the National's Aa2 and the Toronto-Dominion's, Aaa (see chart).

This spring, the average ratio of household debt to personal disposable income reached a record 163 per cent, up from 137 per cent five years earlier.

Canadian house prices, Moody's said, rose 21 per cent in the last five years.

A downgrade could result in higher borrowing costs for the banks, which would be passed on to consumers.

Short-term ratings unaffected

While Moody's said it was reviewing the long-term ratings, the agency affirmed its short term Prime-1 ratings on the six banks.

The Canadian Real Estate Association reported last week that despite a slight recovery from August, home sales in September fell 15.1 per cent from a year ago due to tighter mortgage lending rules and an uncertain economy.

Moody's noted that its central scenario for Canada's economy is for growth between two per cent and three per cent next year, but the downside risks have increased.

The agency noted that a weak U.S. economic recovery, the ongoing crisis in Europe and a slowdown in emerging markets all weigh on commodity prices.

"Should these risks materialize, they would have significant ramifications for the Canadian economy that would be transmitted into the banking system," Moody's said.

In addition, the agency said National Bank, Bank of Montreal, Bank of Nova Scotia and CIBC have sizable exposure to the volatile capital markets businesses.

Moody's said TD is also exposed to the U.S. market, while Caisse Centrale Desjardins' concentrated franchise structure reduces its flexibility.

Borrowers have been encouraged by record low interest rates.

On Tuesday, the Bank of Canada announced it was keeping its trendsetting policy interest rate at one per cent for the 17th consecutive time as economic growth continued to be tepid, but signalled once again that it was worried about Canadian household debt.

High debt levels have also prompted warnings from Finance Minister Jim Flaherty and even the International Monetary Fund

Ottawa has moved several times in the last few years to curb housing-related debt, stepping in to limit how long Canadians can take to pay back their mortgage debt.

In June, Flaherty set the limit for CMHC-insured mortgages at 25 years.

With files from The Canadian Press

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CPP invests in F1, MotoGP racing properties

Canada's national pension plan has made investments in two international sports properties, the company that runs the MotoGP motorbike racing series, and a debt deal with the company that owns the Formula 1 car racing league.

The Canada Pension Plan Investment Board announced the two transactions separately on Friday.

In the first, CPP announced it has taken a 39 per cent stake in Dorna Sports, an event management, media and marketing company with global rights to the MotoGP motorcycle racing series until 2036.

"We look forward to working together with Dorna's CEO, Carmelo Ezpeleta, his management team and Bridgepoint to continue Dorna's global growth and to pursue exciting opportunities to expand into emerging markets," said Andre Bourbonnais, a vice-president with CPP's private investments unit.

CPP did not disclose the financial value of the investment, but noted it is expected to close in the fourth quarter of 2012.

In the second transaction, CPPIB Credit Investments signed a debt agreement with Formula One Group to finance $400 million US of a $1-billion high-yield loan.

The loan is set to expire in 2019, but CPP didn't disclose what the yield on the loan would be.

"This transaction is an excellent opportunity for CPPIB to participate in a long-term loan facility with attractive risk-adjusted returns involving an iconic global sports management brand that is superbly positioned for continued growth," Bourbonnais said.

Formula One Group holds the race promotion, broadcasting, advertising and sponsorship rights for the FIA Formula One World Championship.

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Live bulls to run on Toronto's Bay Street

Toronto's Bay Street will soon be overrun by more bulls than usual — and not just the financial variety.

At least, that's what the Royal Agricultural Winter Fair hopes will happen, as the festival plans to kick off its 90th year with a launch unlike anything tried before.

On Tuesday, Oct. 30, the group plans to release six 900-kilogram bulls at the intersection of Bay Street and Wellington in Toronto's financial centre. The plan is to coax the animals north toward King Street before being corralled.

"While spectators will be able to marvel at these magnificent animals, the streets will be closed to pedestrian and vehicle traffic during the running of the bulls," the fair's organizers said in a press release announcing the stunt.

"Cowboys on horseback will help guide the bulls to ensure they stay on course."

The distance involved is very short, barely 200 metres. And the plan is to have the Pamplona-inspired running of the bulls happen at noon. But as the release tantalizingly notes, "as we are working with animals, exact times are difficult to guarantee."

As of yet, there are no plans to have any bears in attendance.

Founded in 1922, the Royal Agricultural Winter Fair is the world's largest combined indoor agricultural and equestrian show.

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Tenderized meat labels being considered, minister says

Canada's agriculture minister says federal officials are looking at issues surrounding mechanically tenderized meat in the wake of a massive E. coli-related beef recall from Alberta's XL Foods.

Gerry Ritz was in Regina on Friday and reporters asked him about the process, in which lesser cuts of steak are pressed with steel blades and needles to make them tender.

That could potentially push E. coli into the centre of the steak, which often isn't cooked completely.

Ritz allows there is talk in both the U.S. and Canada about putting a label on such products.

He says such a label would warn people "that if you're buying this tenderized product at a lesser price, because it's a lesser cut of meat that's been tenderized, that it should be labelled to warn you to cook it beyond the temperature that's required."

Ritz says that would be up to Health Canada, not the Canadian Food Inspection Agency.

"But certainly they take it seriously and they're working toward that end," he said. "I know in Alberta, the Alberta public health agency has actually outlawed it until they have a better look at it."

The CFIA restored the XL plant's operating licence this week and also launched a review of the E. coli crisis that made at least 16 people ill.

Management of the plant in Brooks, Alta., has been taken over by JBS USA, an American subsidiary of a Brazilian company.

JBS USA has not yet decided if it will exercise its option to buy the plant.

Production is expected to begin again on Monday.

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Royal Bank subpoenaed in LIBOR probe

There are reports that Royal Bank of Canada has been served with a subpoena from U.S. state officials as part of their probe into the possible manipulation of a key benchmark used to set interest rates.

The Wall Street Journal and other business publication report the subpoenas were issued to nine banks, including RBC, in August and September, according to an unidentified person familiar with the investigation.

That brings to 16 the number of banks served with subpoenas, including seven that had become public earlier.

Global investigation

The U.S. investigation by the New York and Connecticut attorneys general is part of a wider probe in several countries that stems from a major U.K. bank's admission that it had provided false information used to set the LIBOR rate.

RBC is Canada's largest bank, with operations in major financial centres around the world including London.

The bank said last summer that it followed the rules in submitting information for compiling the London Interbank Offered Rate, which is used widely as a benchmark to set interest rates on business and consumer debts.

That assurance was repeated Friday in RBC's response to the news reports.

"We have determined that our Libor submissions reflected our cost of funds," said Gillian McArdle, head of communications for Canada at RBC Capital Markets.

Rate-fixing alleged

The rate is set by gathering information from a small number of large banks, using a system that's intended to prevent any one member of the group from manipulating the rate.

Questions about how LIBOR is operated arose after Barclays Bank agreed to pay a record $450 million fine to settle allegations its traders had manipulated submissions to LIBOR.

While Barclays actions by themselves were probably insufficient to affect LIBOR, there authorities in Britain and elsewhere have launched probes to see if it was a more widespread problem.

Canada's competition bureau and other Canadian regulatory bodies launched their own probes in light of the Barclay's revelations but there have been no allegations levelled against RBC.

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Moody's reviews 6 Canadian banks for downgrade

The Bank of Montreal was among six Canadian banks Moody's placed on review for a possible downgrade. (CBC)

Bond rating company Moody's Investors Service today said it would review the long-term ratings of six Canadian banks with the possibility of downgrading their creditworthiness.

Moody's cited "concerns about high consumer debt levels and elevated housing prices" among its reasons, saying the banks are more vulnerable to a downturn in the Canadian economy than in the past.

The six include Bank of Montreal, Bank of Nova Scotia, Caisse Centrale Desjardins, Canadian Imperial Bank of Commerce, National Bank of Canada and Toronto-Dominion Bank.

The Bank of Montreal's current Moody's rating is Aa2, the Bank of Nova Scotia's is Aa1, Caisse Centrale Desjardins' is Aa1, the CIBC's Aa2, the National's Aa2 and the Toronto-Dominion's, Aaa (see chart).

This spring, the average ratio of household debt to personal disposable income reached a record 163 per cent, up from 137 per cent five years earlier.

Canadian house prices, Moody's said, rose 21 per cent in the last five years.

A downgrade could result in higher borrowing costs for the banks, which would be passed on to consumers.

Short-term ratings unaffected

While Moody's said it was reviewing the long-term ratings, the agency affirmed its short term Prime-1 ratings on the six banks.

The Canadian Real Estate Association reported last week that despite a slight recovery from August, home sales in September fell 15.1 per cent from a year ago due to tighter mortgage lending rules and an uncertain economy.

Moody's noted that its central scenario for Canada's economy is for growth between two per cent and three per cent next year, but the downside risks have increased.

The agency noted that a weak U.S. economic recovery, the ongoing crisis in Europe and a slowdown in emerging markets all weigh on commodity prices.

"Should these risks materialize, they would have significant ramifications for the Canadian economy that would be transmitted into the banking system," Moody's said.

In addition, the agency said National Bank, Bank of Montreal, Bank of Nova Scotia and CIBC have sizable exposure to the volatile capital markets businesses.

Moody's said TD is also exposed to the U.S. market, while Caisse Centrale Desjardins' concentrated franchise structure reduces its flexibility.

Borrowers have been encouraged by record low interest rates.

On Tuesday, the Bank of Canada announced it was keeping its trendsetting policy interest rate at one per cent for the 17th consecutive time as economic growth continued to be tepid, but signalled once again that it was worried about Canadian household debt.

High debt levels have also prompted warnings from Finance Minister Jim Flaherty and even the International Monetary Fund

Ottawa has moved several times in the last few years to curb housing-related debt, stepping in to limit how long Canadians can take to pay back their mortgage debt.

In June, Flaherty set the limit for CMHC-insured mortgages at 25 years.

With files from The Canadian Press

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CPP invests in F1, MotoGP racing properties

Canada's national pension plan has made investments in two international sports properties, the company that runs the MotoGP motorbike racing series, and a debt deal with the company that owns the Formula 1 car racing league.

The Canada Pension Plan Investment Board announced the two transactions separately on Friday.

In the first, CPP announced it has taken a 39 per cent stake in Dorna Sports, an event management, media and marketing company with global rights to the MotoGP motorcycle racing series until 2036.

"We look forward to working together with Dorna's CEO, Carmelo Ezpeleta, his management team and Bridgepoint to continue Dorna's global growth and to pursue exciting opportunities to expand into emerging markets," said Andre Bourbonnais, a vice-president with CPP's private investments unit.

CPP did not disclose the financial value of the investment, but noted it is expected to close in the fourth quarter of 2012.

In the second transaction, CPPIB Credit Investments signed a debt agreement with Formula One Group to finance $400 million US of a $1-billion high-yield loan.

The loan is set to expire in 2019, but CPP didn't disclose what the yield on the loan would be.

"This transaction is an excellent opportunity for CPPIB to participate in a long-term loan facility with attractive risk-adjusted returns involving an iconic global sports management brand that is superbly positioned for continued growth," Bourbonnais said.

Formula One Group holds the race promotion, broadcasting, advertising and sponsorship rights for the FIA Formula One World Championship.

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Live bulls to run on Toronto's Bay Street

Toronto's Bay Street will soon be overrun by more bulls than usual — and not just the financial variety.

At least, that's what the Royal Agricultural Winter Fair hopes will happen, as the festival plans to kick off its 90th year with a launch unlike anything tried before.

On Tuesday, Oct. 30, the group plans to release six 900-kilogram bulls at the intersection of Bay Street and Wellington in Toronto's financial centre. The plan is to coax the animals north toward King Street before being corralled.

"While spectators will be able to marvel at these magnificent animals, the streets will be closed to pedestrian and vehicle traffic during the running of the bulls," the fair's organizers said in a press release announcing the stunt.

"Cowboys on horseback will help guide the bulls to ensure they stay on course."

The distance involved is very short, barely 200 metres. And the plan is to have the Pamplona-inspired running of the bulls happen at noon. But as the release tantalizingly notes, "as we are working with animals, exact times are difficult to guarantee."

As of yet, there are no plans to have any bears in attendance.

Founded in 1922, the Royal Agricultural Winter Fair is the world's largest combined indoor agricultural and equestrian show.

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Tenderized meat labels being considered, minister says

Canada's agriculture minister says federal officials are looking at issues surrounding mechanically tenderized meat in the wake of a massive E. coli-related beef recall from Alberta's XL Foods.

Gerry Ritz was in Regina on Friday and reporters asked him about the process, in which lesser cuts of steak are pressed with steel blades and needles to make them tender.

That could potentially push E. coli into the centre of the steak, which often isn't cooked completely.

Ritz allows there is talk in both the U.S. and Canada about putting a label on such products.

He says such a label would warn people "that if you're buying this tenderized product at a lesser price, because it's a lesser cut of meat that's been tenderized, that it should be labelled to warn you to cook it beyond the temperature that's required."

Ritz says that would be up to Health Canada, not the Canadian Food Inspection Agency.

"But certainly they take it seriously and they're working toward that end," he said. "I know in Alberta, the Alberta public health agency has actually outlawed it until they have a better look at it."

The CFIA restored the XL plant's operating licence this week and also launched a review of the E. coli crisis that made at least 16 people ill.

Management of the plant in Brooks, Alta., has been taken over by JBS USA, an American subsidiary of a Brazilian company.

JBS USA has not yet decided if it will exercise its option to buy the plant.

Production is expected to begin again on Monday.

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Spain's unemployment rate hits 25%

One Spaniard in four is now officially out of work as the economic crisis tightens its grip on the country.

The National Statistics Institute said Friday that 85,000 more people joined the ranks of the unemployed between July and September, raising the total to 5.78 million.

The figures brought the country's unemployment rate up by around 0.4 percentage points in the third quarter to 25.02 per cent.

For those under 25 years of age, the unemployment rate edged down marginally to 52 per cent from 53 per cent in the previous quarter.

The institute said that over the past 12 months some 800,000 people had lost their jobs. Spain is under pressure to ask for outside aid to help deal with its debts. The country is in its second recession in three years.

Bailout could stretch EU finances

It has already been granted a €100 billion ($129 billion Cdn) bailout facility for its troubled banks while many of its regional government are also in bad financial shape.

In September, the European Central Bank said it would buy unlimited amounts of bonds in countries struggling with their debts if they formally apply for aid.

This has helped Spain by lowering its borrowing costs, but conservative Prime Minister Mariano Rajoy has held off triggering the actual purchases.

Spain is one of the focal points in Europe's debt crisis because if it defaulted or needed a full-blown bailout, the finances of the 17-country group that uses the euro could be severely stretched.

Rajoy's government, which pledged to reduce unemployment in its electoral campaign last year, has introduced austerity measures and financial and labor reforms to convince investors it has a grip on its accounts but they have yet to show any positive effect on the economy.

The measures, in particular the labor reform that makes it easier to dismiss workers, have led to many strikes and protests.

Tens of thousands need food

The country faces its second general strike in a year Nov. 14. On Friday, yet another rush-hour go-slow by subway workers caused traffic chaos in the Spanish capital.

Organizations such as the Spanish Red Cross and the Catholic Church charity organization Caritas say unemployment and the austerity measures are leaving tens of thousands of people in need of food and financial help.

On Thursday, Caritas said the foundation run by Amancio Ortega — founder of the Zara store parent company Inditex — would donate €20 million to help buy food, medicines and school material.

The statistics institute said Spain now has 1.8 million households in which no one has work.

The institute said the once-booming construction sector is the worst hit, with 56,100 fewer jobs.

Of Spain's 17 regions, southern Andalusia lost most jobs — 58,400 — while northeastern Catalonia saw its unemployment numbers increase by 36,300.

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British ExxonMobil executive shot dead in Belgium

Belgian authorities are seeking the public's help in solving the killing of an executive for ExxonMobil, the world's largest oil company, who was shot to death in front of his wife nearly two weeks ago on a street in a suburb of the Belgian capital of Brussels.

Nicholas Mockford, a British national, was shot on Oct. 14 as he left an Italian restaurant in Neder-over-Heembeek. Belgian authorities declined to provide information on the crime at the time, which they said was common in investigations of serious crimes, although a Dutch-language television station aired a report the day after the shooting.

A spokesman for ExxonMobil said Friday that the company was "shocked by the very tragic death." Mockford had a long career with ExxonMobil, the spokesman said.

A Belgian police report made public Thursday said Mockford and his wife, Mary, were walking toward their car when a man threatened Mrs. Mockford, hit her in the face several times, and tried to grab her purse. Suddenly, a second man appeared and fired four shots at Mockford, who died on the spot, the report said. The assailants, who were wearing motorcycle helmets, initially escaped on foot but were later seen on a motorcycle, according to the report.

Shortly before the attack, a white van crossed the couple's path. Investigators are asking the driver of the van to come forward.

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U.S. economy expanding faster than expected

America's GDP expanded at a two per cent pace in the three months up to the end of September, better than the 1.8 per cent pace that economists had been expecting.

The Commerce Department said in a release Friday the pick-up came about because of a number of factors, including higher government spending, more personal spending by consumers and lower imports.

The two per cent pace was also well ahead of the 1.3 per cent annual pace seen in the previous quarter.

Growth was held back by the first drop in exports in more than three years and flat business investment in equipment and software.

The economy was also slowed by the severe drought last summer in the Midwest. The drought cut agriculture stockpiles and reduced growth by nearly a half-point.

With files from The Associated Press

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Royal Bank subpoenaed in LIBOR probe

There are reports that Royal Bank of Canada has been served with a subpoena from U.S. state officials as part of their probe into the possible manipulation of a key benchmark used to set interest rates.

The Wall Street Journal and other business publication report the subpoenas were issued to nine banks, including RBC, in August and September, according to an unidentified person familiar with the investigation.

That brings to 16 the number of banks served with subpoenas, including seven that had become public earlier.

Global investigation

The U.S. investigation by the New York and Connecticut attorneys general is part of a wider probe in several countries that stems from a major U.K. bank's admission that it had provided false information used to set the LIBOR rate.

RBC is Canada's largest bank, with operations in major financial centres around the world including London.

The bank said last summer that it followed the rules in submitting information for compiling the London Interbank Offered Rate, which is used widely as a benchmark to set interest rates on business and consumer debts.

That assurance was repeated Friday in RBC's response to the news reports.

"We have determined that our Libor submissions reflected our cost of funds," said Gillian McArdle, head of communications for Canada at RBC Capital Markets.

Rate-fixing alleged

The rate is set by gathering information from a small number of large banks, using a system that's intended to prevent any one member of the group from manipulating the rate.

Questions about how LIBOR is operated arose after Barclays Bank agreed to pay a record $450 million fine to settle allegations its traders had manipulated submissions to LIBOR.

While Barclays actions by themselves were probably insufficient to affect LIBOR, there authorities in Britain and elsewhere have launched probes to see if it was a more widespread problem.

Canada's competition bureau and other Canadian regulatory bodies launched their own probes in light of the Barclay's revelations but there have been no allegations levelled against RBC.

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Former Italian premier Berlusconi convicted of tax evasion

A court in Italy has convicted former premier Silvio Berlusconi of tax fraud and sentenced him to four years in prison.

The conviction Friday was the 76-year-old media mogul's first in a long series of trials, but it did not mean he was going to prison right away. Cases in Italy must pass two levels of appeal before the verdicts are final.

His lawyers declined to comment immediately, but the billionaire businessman is expected to appeal. Berlusconi wasn't in the courtroom for the verdict on the case stemming from dealings in his Mediaset business empire.

A total of 11 people were on trial. Prosecutors had alleged that the defendants were behind a scheme to purchase the rights to broadcast U.S. movies on Berlusconi's private TV networks in his Mediaset empire through a series of offshore companies and had falsely declared the payments to avoid taxes.

Berlusconi's designated political heir as the head of the center-right party he leads, Angelino Alfano, blasted the verdict Friday as "incomprehensible" and said he was confident an appeals court would throw out the conviction.

In this and other cases against him, Berlusconi has described himself as the innocent victim of prosecutors he contends sympathize with the left. Up until now, other criminal investigation probes against him on charges including corruption had ended in acquittal or were thrown out for statute of limitations.

Of the other defendants, three were acquitted, including a close associate of Berlusconi, Fedele Confalonieri, chairman of Mediaset. Berlusconi and three others were convicted, including a Hollywood producer, Frank Agrama, who received a three-year sentence.

Four defendants were cleared because statute of limitations had run out.

Berlusconi, along with other defendants convicted in the case, must deposit a total of €10 million ($12.9 million Cdn) into a court-ordered fund as appeals, which could take years, proceed.

The trial began in July 2006, but was put on hold by a now-defunct immunity law that shielded the Berlusconi from prosecution while he was premier until it was watered down by the constitutional court. The trial also faced delays as Berlusconi cited conflicts with his schedule as premier

In the same courthouse on Friday, another criminal trial against Berlusconi was being held. He is charged in that case with paying for sex with an under-age girl and trying to cover it up. He denies wrongdoing.

Berlusconi is not the first former Italian premier to be convicted of criminal charges.

Former Socialist Premier Bettino Craxi eluded an arrest warrant and turned up at his villa in Tunisia in 1994 after a court in Italy charged him in a massive corruption case. He was tried in absentia, convicted and sentenced to 8 1/2 years in prison. He never returned to Italy and died in exile. Craxi was considered Berlusconi's mentor, thanks to his opening up of private television in Italy from a state monopoly.

Former seven-time Christian Democrat premier, Giulio Andreotti, was convicted of involvement in a Mafia-murder, but he was cleared on appeal and never went to jail.

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Redford says budget won't change, despite low oil prices

Despite low oil prices and a forecast deficit that could hit $3 billion, Alberta Premier Alison Redford says her government's spending plan won't change.

World oil prices dropped to about $86 a barrel on Wednesday — well below the $99 forecast in this year's provincial budget.

'What we'll continue to do is to meet the priorities of Albertans, and that is to ensure that we're providing services, that we're supporting teachers and doctors, education and health care.'— Alberta Premier Alison Redford

The volatile prices have already forced the government to cap spending and look for more in-year savings to balance spending plans.

The province is forecasting a deficit between $2.3 and $3 billion this year, but Redford said Albertans know the government challenge is always to manage energy revenues, which can fluctuate substantially in any year.

"We put a budget in place and we're continuing to support services. Of course, we'll be preparing a new budget for next year and we're carrying on with respect to our capital spending and plan," she said.

"What we'll continue to do is to meet the priorities of Albertans, and that is to ensure that we're providing services, that we're supporting teachers and doctors, education and health care."

Redford said volatile prices are not a new challenge.

"That's a discussion we always have in Alberta and it could very easily be there, it could very easily be $100. What we've done is we've set a plan in place, we've set priorities and we're going to deliver on those priorities."

The premier said her government still intends to present a balanced budget next spring.

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Weekly paycheques getting bigger at a faster pace

The average weekly paycheque of a salaried Canadian worker was $907.19 in August, a slight increase from the previous month's level but 3.6 per cent higher than the same month a year earlier.

Statistics Canada reported Thursday that the pay hike was due to several factors including higher salaries per hour worked but also an increase in the number of hours worked. The average workweek of a non-farm salaried Canadian worker was 33.1 hours in August, up from 32.9 during the same period a year ago.

The 3.6 per cent annual gain is the largest pace of increase we've seen since early 2011, when it was 4.1 per cent. For comparison purposes, Canada's inflation rate currently sits at 1.2 per cent.

Widespread gains

Pay gains were above average in three sectors: professional, scientific and technical services; accommodation and food services; and construction.

The only sector to post a decline in average earnings was the administrative and support services segment. The average weekly paycheque of those workers was $724.03.

Regionally, the average weekly paycheque was bigger in every Canadian province but notably above the national average in Newfoundland and Labrador and Saskatchewan.

The average weekly paycheque was $942.31 and $938.57, respectively, in those two provinces.

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Cellphone billing errors routine, telecom watchdog finds

A telecom watchdog group says routine errors on cellphone bills continue to be a major headache for consumers, who often complained they were charged too much.

A report by the Commissioner for Complaints for Telecommunications Services finds consumers also say they weren't given discounts or credits promised or their contracts didn't reflect the services they thought they were getting.

The non-profit group helps settle disputes between consumers and telecom service providers.

It handled almost 11,000 complaints for 2011 to 2012, a 35 per cent increase from the previous year.

The complaints included wireless, local phone and long distance and Internet services.

For the last three years, complaints about cellphone services have made up more than half of the telecom services complaints, a hot button issue for consumers.

"The No. 1 complaint is what I will call routine billing errors related to regular service," said commissioner Howard Maker, who released his annual report Thursday.

"Wireless tends to be a complaint generator," Maker said.

Little accountability

Maker said a national code of conduct for Canada's wireless providers should eventually help lower complaints.

"We think it will set minimum standards for service provider conduct and will clarify rights and responsibilities."

The Canadian Radio-television and Telecommunications Commission has asked Canadians to help draft the code because consumers have said their monthly contracts are confusing and the terms and conditions can vary greatly from one wireless company to another.

This year, more than 60 per cent of the complaints to Maker's watchdog group were about wireless services, which face numerous technological changes, he said.

"I often think the technology guys and the marketing guys get ahead of the customer service folks. So it's difficult for the customer service folks to convey all of the information that consumers need in a timely way and in an accurate way."

Maker also noted that his group solved 90 per cent of the complaints it received and said sometimes the solutions were glaringly obvious.

Some of the solutions were so simple that "you kind of scratch your head" and wonder why customers couldn't get any satisfaction, he said.

"We see so many complaints that could have been avoided, in our view, with a little extra care provided by the service provider at first instance."

Confusing contracts

The second-biggest complaint was clauses in consumers' cellphone contracts, known as terms of service, which includes such things as early termination fees, the report said.

That underscores that consumers need to understand their contracts, Maker said.

The watchdog group also received complaints about lost smartphones and if consumers needed to keep paying their monthly contracts.

Consumers aren't off the hook and need to be aware of their responsibilities and options, Maker said.

"Losing your device is not a basis to stop paying your monthly fees," he said.

"Although we understand customers' frustration with having to pay for a service that they can no longer use, the physical protection of a customer's device is not the service provider's responsibility," the report adds.

The report also found that local telephone service and Internet service were No. 2 and No. 3 in generating complaints.

The main complaint with these services, again, was billing errors, Maker said. Complaints about Internet services also include disputes about usage caps.

Maker said 178 telecom service providers and brands participate in the group's dispute resolution process.

The group is an independent, industry-financed body established by the federal government to resolve consumer complaints against telecom companies.

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Olympics helped boost Britain's GDP numbers

Hosting the Olympics probably helped Britain's economy grow by more than expected during the summer and ending a shallow, nine-month recession.

The country's Office for National Statistics reported Thursday that the economy grew one per cent over July and September compared with the same period a year earlier, beating economists' consensus forecast of 0.6 per cent.

The statistics agency says the Olympic Games and Paralympic Games probably gave the economy a boost but it gave no estimate of that effect.

Growth of that magnitude will make the Bank of England less likely to approve a further round of economic stimulus in November, analysts say.

The ONS said the result was the strongest quarterly growth in five years, bringing economic output back to the same level of a year ago.

It is a first estimate and is subject to revision.

Economy is 'healing'

Prime Minister David Cameron, in a message on Twitter, said there was still much to do "but these GDP figures show we are on the right track, and our economy is healing."

Ed Balls, economic spokesman for the opposition Labour Party, said the economy remained "very weak" and there was "no time for complacency."

The ONS said sales of Olympic tickets that occurred in 2011 and earlier in 2012 — the ones it statistically allocated to third-quarter economic output — accounted for 0.2 points of the rise.

Most analysts warned that beyond these one-time effects, the economy remains weak.

"As the Olympic effects unwind, it is still possible that the economy contracts again in the fourth quarter," said Vicky Redwood, chief UK economist at Capital Economics.

Others argued that the simple fact the economy grew is good news at a time when many European countries are sliding deeper into recession.

About half of the nearby eurozone's 17 economies are in recession and even the largest, like Germany and France, are weakening.

With files from The Associated Press

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Conrad Black loses bid to address Order of Canada review body

Former media baron Conrad Black's request to Federal Court for a hearing before a panel examining whether he should be allowed to remain an officer of the Order of Canada has been rejected.

Black's 1990 appointment to the Order of Canada is under review because of fraud and obstruction of justice convictions in the U.S. related to his tenure as head of the Hollinger newspaper empire.

Black, now living in Toronto, served 37 months of a 42-month sentence in a Florida prison. Canada's Department of Citizenship and Immigration granted the Montreal-born Black a one-year temporary resident permit, valid until May 2013. He had renounced his Canadian citizenship 11 years ago to take a seat in the British House of Lords.

In July, Black submitted an application to the Federal Court for an oral hearing to address the advisory council looking into whether he can keep his Officer of the Order of Canada appointment, and give his side of the story.

Court cites 'natural justice' for denying request

The Federal Court "reached the conclusion that the application ought to be dismissed," Justice Yves de Montigny wrote in a ruling this month.

"While I am prepared to accept that the application is not premature and that the council's decision to deny the applicant an oral hearing is not immune from judicial review, I find that procedural fairness and natural justice do not require an oral hearing in the circumstances of this case," he wrote.

Black was found guilty by a U.S. jury in 2007 of three counts of fraud and one count of obstruction of justice, but he was acquitted on nine other charges, including mail fraud, wire fraud, racketeering and tax fraud.

An Appeals Court later overturned two of his fraud convictions, but allowed a single fraud conviction and the obstruction of justice conviction to stand.

Lawyers argued written submissions not enough

The regulations say the council shall consider "the termination of a person's appointment to the Order of Canada if the person has been convicted of a criminal offence."

An 11-member advisory panel, led by Supreme Court Justice Beverley McLachlin, is reviewing Black's membership in the Order of Canada.

The panel's recommendation will go to the Governor General, who has the final say on whether to revoke Black's membership.

Black's lawyers had argued in their Federal Court application that the decision was "complex" and written submissions were not enough to examine the issue.

"The facts relating to the issue of terminating the applicant's appointment to the Order of Canada are complex and lengthy and cannot be appropriately dealt with in written submissions only," reads the filing.

"Only an oral hearing will ensure that the recommendation of the advisory council is based on 'evidence and guided by principles of fairness.'"

U.S. court fines Black $6.1M for securities laws violations

Meanwhile, an American court recently fined Black $6.1 million US for violating securities laws.

The fine relates to Black's tenure at Hollinger International Inc. based in Chicago.

In his judgment earlier this month, Judge William Hart of the District Court for the Northern District of Illinois blasted Black as "intransigent." Hart was especially unhappy with Black's denunciation of the courts and justice system in a book he has written.

Black has requested a stay of the judgment while he appeals related convictions.

With files from the Canadian Press

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Facebook earnings better than expected

Facebook's third-quarter results inched past Wall Street's expectations, offering evidence that the company is making inroads in mobile advertising — a longtime concern among investors.

Tuesday's financial results, Facebook's second as a public company, sent its stock sharply higher in after-hours trading.

The stock jumped $1.90, or 9.7 per cent, to $21.40 US after the announcement. Facebook had closed up 18 cents at $19.50 in regular trading on a day that saw the Dow Jones industrial average drop 243 points, or 1.8 per cent.

The world's biggest social media company posted a loss of $59 million, or two cents per share, in the July-September period.

That's down from earnings of $227 million, or 10 cents per share a year ago, when Facebook was still privately held.

Excluding special items, mainly related stock compensation expenses, Facebook Inc. earned $311 million, or 12 cents per share, in the latest quarter, a penny better than what analysts were expecting.

Revenue rose 32 per cent to $1.26 billion from $954 million.

Mobile ad revenue increasing

Analysts had expected earnings of 11 cents per share on revenue of $1.23 billion, according to FactSet.

Facebook's monthly user base grew 26 per cent from a year earlier, to 1.01 billion. Some 60 per cent of users access Facebook using a mobile device, the company said.

"People who use our mobile products are more engaged, and we believe we can increase engagement even further as we continue to introduce new products and improve our platform," said CEO Mark Zuckerberg in a statement.

"At the same time, we are deeply integrating monetization into our product teams in order to build a stronger, more valuable company."

Advertising revenue was $1.09 billion, up 36 per cent from a year earlier. It represented about 86 per cent of Facebook's total revenue.

Revenue from payments and other fees climbed 13 per cent to $176 million. This figure includes Facebook's cut from the virtual items people buy for games they play on the site.

Facebook said it generated 14 per cent of its advertising revenue from mobile ads during the quarter. That amounts to about $152.6 million.

'I want to dispel this myth that Facebook can't make money on mobile.'—Facebook CEO Mark Zuckerberg

This was the first time the company has disclosed a mobile ad revenue figure — a closely watched metric because so many more people use mobile gadgets to access Facebook.

Facebook faces a challenge with mobile advertising: The company must try to show users ads on smaller, mobile screens without annoying or overwhelming them.

"I want to dispel this myth that Facebook can't make money on mobile," said CEO Mark Zuckerberg in a conference call with analysts.

"This may [have seemed] true earlier this year because we hadn't started trying yet but after just six months of ramping up our mobile ads business we're already at a point where 14 per cent of our ad revenue this quarter is for mobile."

Chief financial officer David Ebersman said Facebook had a "solid performance" in the third quarter. Facebook did not provide guidance for the current quarter or beyond, a practice it has maintained since its first earnings report as a public company in late July.

Its stock has lost almost half its value since its initial public offering in May as investors have worried about its ability to raise money from advertising aimed at its one billion users.

The shares were first floated on the Nasdaq at $38, giving the firm — which was touted then as the next Google — a market value of $100 billion.

With files from the CBC

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Warren Buffett on the lookout for new acquisitions

Billionaire investor Warren Buffett says he continues looking for a major acquisition for his Berkshire Hathaway, but he's not willing to pay more to compete with other bidders.

Buffett says Berkshire has lost out on a couple of major acquisitions in recent years because private equity firms are bidding aggressively with borrowed money. Berkshire doesn't borrow for acquisitions.

The Berkshire chairman and CEO said Wednesday during an interview on CNBC that Berkshire has about $40 billion cash on hand currently.

Buffett says that Berkshire has made about 15 smaller acquisitions this year. He calls those bolt-on acquisitions because they are just added to Berkshire's existing businesses.

He also says he has added to Berkshire's Wells Fargo and IBM stock investments this year, but he'd still prefer to make a big acquisition.

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Alberta oilsands will benefit all provinces, think-tank says

The economic benefits of Alberta's oilsands will be felt in all provinces and will lead to billions of dollars of jobs and investment across the country, says a Conference Board of Canada report released today.

The think-tank says it expects the province's oilsands to generate $364 billion worth of economic activity over the next two decades, and create 880,000 person-years of employment.

"The majority of the supply chain effects will occur inside of Alberta, but nearly one-third will occur in other provinces," the report found.

Ontario stands to benefit most

Next to Alberta, Ontario stands to benefit the most, the conference board says. It estimates that 14.8 per cent of the supply chain employment effects of the oilsands will be felt in Ontario. Next comes B.C., which stands to experience 6.7 per cent of the economic impact, then Quebec at 3.9 per cent.

The Prairies can expect to experience 3.7 per cent of the impact, followed by Atlantic Canada at 0.8 per cent, the report says.

Much of the reason for Ontario's surprising prominence comes from the province's manufacturing sector, but the conference board also notes that the massive, multi-year infrastructure projects in northern Alberta will create demand for administrative services such as employment agencies, scientific research and design services, and computer services.

The paper also notes that a significant percentage of oilpatch workers don't hail from Alberta, and that's bound to have benefits in those workers' home provinces.

Tax revenues spread

"In total, we estimate that there were 5,200 out-of-province workers in Wood Buffalo-Cold Lake in 2011 and that they earned $280 million in labour income," the conference board says.

Newfoundland and Labrador, British Columbia and Saskatchewan are the largest source provinces for these workers.

As well, government coffers across the country are likely to be padded by oilsands activity, the group says. In total, it calculates that oilsands activity will generate $45.3 billion worth of tax revenue for the federal government, and $34.1 billion for various provincial governments, between 2012 and 2035.

"Oilsands development will have wide-ranging effects on Canada's economy," the report says.

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Bank of Canada sees economy picking up

The Bank of Canada Wednesday predicted relatively robust growth for Canada next year mostly as a result of increased exports as the global economy begins to mend.

The bank said Canada's real gross domestic product only grew by about one per cent in the July-September period, in part due to temporary factors and headwinds from weak global conditions.

That's half what it had expected in July and the weakest quarter of growth since the spring of 2011.

The main cause, it said, was temporary production shutdowns in the oilpatch during the summer.

"The bank expects growth in the Canadian economy to pick up in the coming quarters to a somewhat faster pace than that of its production potential," it said.

"The pick-up in growth from its trough in the third quarter of this year is expected to be driven primarily by a modest increase in net exports. This balances ongoing competitiveness challenges (high dollar) with the projected improvement in the growth of foreign activity."

But the bank has forecast the last three months of 2012 will see a rebound to 2.5 per cent growth and GDP advances of 2.6 per cent in each of the next three quarters.

Bank sees 2.3% growth in 2013

On an annual basis, the bank says growth will average 2.2 per cent this year, 2.3 in 2013 and 2.4 in 2014.

However, the economy is still operating below capacity and won't be firing on all cylinders until the end of next year, it said.

CIBC economist Avery Shenfeld says the latest forecast suggests the bank will postpone any interest rate hike until early 2014.

Shenfeld bases that on his view that, although the Bank is prepared to hike in late 2013 if inflation moves higher, that economic growth will fall short of the bank's prediction for 2013 and that the increase in household debt will slow down on its own.

The bank hardened its warning about household debt, explicitly saying it would consider the vulnerability of family finances in future decisions about interest rate levels, which it concedes have driven the housing market boom of the past few years.

On Wednesday, the bank noted that household debt, now calculated at more than 160 per cent of annual income, will likely continue to rise until levelling off in 2014.

Globally, the bank says risks have moderated somewhat because of aggressive action taken by the European Central Bank to provide breathing room for reforms to be implemented, and the announcement of a third-round of quantitative easing from the U.S. Federal Reserve.

Housing crash not expected

The bank said the latter move will likely boost growth by 1.3 percentage points in the U.S. in 2014. A stronger U.S. economy also lifts the Canadian boat, the bank said, by about 0.4 percentage points in the same year.

Although the bank expects exports to pick up gradually, the main drivers of the Canadian economy remain consumer consumption and business investment. The public sector has practically abandoned the field in terms of a growth generator as governments move to restraint, it said, resulting in a modest drag this year and equally modest stimulus next.

The bank also expects housing activity to continue to slow, but does not anticipate a crash, noting that despite "signs of overbuilding, the level of housing investment still remains near historical highs." That's especially true in the condo market, it said.

The bank still sees considerable risks to its base case scenario of a gradual improvement in the economy, particularly failure among policy-makers in Europe to control their debt crisis and in the U.S. to avoid a fiscal cliff at the end of this year that could sap four percentage points from growth.

The report followed the Bank's decision yesterday to keep its trendsetting policy interest rate, as expected, at one per cent for the 17th consecutive time.

Economists had been looking for signs the bank might soften its warning about hiking interest rates in the future but it kept the previous language largely intact.

The Bank of Canada says the last three months of 2012 will see a rebound to 2.5 per cent growth and GDP advances of 2.6 per cent in each of the next three quarters. (Chris Wattie/Reuters) With files from The Canadian Press

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