Stories Report on Business is following today :
Toyota officials apologize
Canadian officials of Toyota Motor Corp. are apologizing to Canadian customers today. Toyota Canada Inc. chief executive officer Yoichi Tomihara, appearing before a Commons committee studying the auto maker's massive recalls, said that "many Canadians have wondered whether their vehicles are safe, and we regret this has caused our customers both anxiety and inconvenience."
Read
Toyota apologizes to Canadian car owners
Toyota's top U.S. executive to testify
How Toyota strayed from the quality control path and lost its way
Flaherty says dollar is competitive
Finance Minister Jim Flaherty doesn't expect the strong Canadian dollar to reach "an uncompetitive level." The dollar is moving ever closer to parity with the U.S. currency, and both Mr. Flaherty and the Bank of Canada have in the past cited this as a concern. Mr. Flaherty told Bloomberg Television yesterday that the dollar is now competitive, which could be tested "if it appreciated to, you know, really an uncompetitive level, but that isn't anticipated."
The finance minister said he obviously can't predict the dollar's value but that his government won't be knocked off its fiscal path. "We don't know everyone who's invested in Canadian dollars," he told the news agency. "I do know there's been interest from some countries to take positions in Canadian dollars that are larger positions than they've taken before."
Some economists project the dollar will reach parity with the greenback by the summer.
Labour productivity surges
Labour productivity in Canada is bouncing back, with its best showing in more than a decade. Productivity in the fourth quarter rose 1.4 per cent, Statistics Canada said today, its first gain since the third quarter of 2008 and its fastest growth rate since the first quarter of 1998. That came as Canadian businesses expanded their output while working hours remained the same. Canada's poor record on productivity has long been a source of concern to economists because of its impact on living standards. "That doesn't quite erase the dreadful performance of the last 3-plus years, which had seen productivity essentially stagnate," said BMO Nesbitt Burns deputy chief economist Douglas Porter. Read the story
Manufacturing shipments rise again
Canada's manufacturing sector is doing well despite the strength in the Canadian dollar, which boosts the costs of exports abroad. Statistics Canada said this morning that manufacturing sales rose 2.4 per cent in January from December, far better than expected and marking the fifth gain in a row. The increase was broad-based across the sector, as 17 of the 21 industries measured saw increases. "This is undoubtedly a very strong report, and it suggests that the manufacturing sector is continuing to fire on all cylinders, defying the adverse impact of the strong Canadian dollar and the weak U.S. economy," said TD Securities economist Millan Mulraine. "And with the very strong gains in real shipments, we expect the manufacturing sector to remain a key source of support for the Canadian economy. Nonetheless, we expect activity to moderate somewhat in the coming months."
Markets await Fed decision
The Federal Reserve is not expected to make any change to its benchmark rate with its policy announcement at 2:15 p.m. ET today, but markets are watching closely for any shift in the U.S. central bank's stance. Investors parse each Fed statement for any change in wording, looking for signals in an extraordinarily volatile period. Today, one focus will be on the term "extended period." When it last met in late January, the Fed's policy makers noted that one of its members, Thomas Hoenig, president of the Federal Reserve Bank of Kansas City, dissented and wanted to remove the promise that the Fed would hold its key rate at its historic low near zero "for an extended period." Scotia Capital economists Derek Holt and Karen Cordes today cited five things to watch for:
• Whether "extended period" remains or goes. Removing the phrase would give the Fed "some flexibility to hike rates in the near term," the economists said. "Or, more likely, this term could be replaced with 'some time' as used by Chicago Fed President [Charles]Evans in a recent speech, or other wording which would provide a more modest shift in the bias than the full-on removal of the term."
• Should "extended period" remain, Mr. Hoenig will probably dissent again. As well, Mr. Holt and Ms. Cordes said, James Bullard of the St. Louis regional Fed bank could also dissent.
• There could be "firmer wording" on the expiry of the Fed's huge mortgage-backed securities purchase program, which is expected to be done by the end of the first quarter.
• The Fed could remove "exceptionally" from the phrase "exceptionally low levels," in terms of where interest rates now stand. That would signal that the emergency recession-era levels are no longer needed. "Or," the economists said, "this term could be replaced by the phrase 'highly accommodative' or something like that which would shift the statement towards a more hawkish bent but on a more gradual pace than if the phrase was removed entirely."
• The Fed's statement could see a more optimistic assessment of the economic climate because recent indicators have been better than projected. "While this would likely be offset by further reservations about the U.S. housing market, all in all the tone will likely be more optimistic."
Junk bond maturity points to financial troubles
A New York Times report today cites fears over looming junk bond maturities. While markets now focus on growing government debts, 2012 marks the start of a three-year period that will see more than $700-billion (U.S.) in corporate junk bond debt come due, the newspaper said. Analysts, according to the report, worry that this flood in riskier, high-yield debt will result in a glut in credit markets. They fear some corporations will have trouble refinancing, which in turn could spark default and bankruptcy, leading to job cuts and a pullback in spending by consumers. "An avalanche is brewing in 2012 and beyond if companies don't get out in front of this," Kevin Cassidy, a senior Moody's Investor Service credit officer, told the newspaper. Read the story
From today's Report on Business
Shakeup at WestJet as CEO Sean Durfy quits
How Captain High Liner beat the dollar odds