Category: Economic

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Alberta Canada Economic

Finning International Cutting Canadian Positions

Finning International, cutting Canadian positions

Finning International, a Canadian company, has announced that it will be cutting out 500 position sin 2015 although the exact specifics of the jobs that will be lost have not been detailed yet. These 500 jobs represent roughly 9% of the Canadian workforce that the company has. So far is is still not clear how many of the positions that will be cut will be in the oilsands or in the Alberta region. Finning International is the largest Caterpillar truck dealer in Canada, and the company initially started out in the forestry industry before expanding into mining and other sectors. The company announced that the layoffs would take place last week at the same time as the fourth quarter results for the business were released to the public.

The CEO of Finning International, Scott Thomson, discussed cutting positions in the report which said in part “In order to maintain profitability during soft market conditions, we are taking steps to align our cost base and invested capital to reduced demand, similar to the actions we took in South America a year ago. While this is a difficult decision, it is a necessary step to adjust to expected business levels.” 2014 was a profitable year for Finning International according to the released report, and the company had fourth quarter earnings listed of $107 million. The entire $318 million profit for 2014 was still a 5% decrease from 2013. Many companies are starting to scale back as a result of lower oil prices and less revenue, Finning International is just the latest to announce their plans in this direction.

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Economic Ft Mac

Canceled Contract Results in Tok Threatening to Take Action Against RMWB

RMWB, Tok, contract

Tok is upset over a move by RMWB to cancel a contract, and the company is threatening to take legal action over the move by the municipality. The contract was canceled on February 19, 2015 after a transit audit in October 2014 showed poor results, with the results being the reason given for terminating the contract with Tok and moving transit services in house. Tok contends that the RMWB made the move for their own convenience, and that the performance by the company has bee depicted inaccurately. According to a release from Ajay Mehra, the COO of Tok, “This termination attempt is part of a planned strategic effort to replace (Tok’s) extensive value added investments … all of which took immense financial resources, time and effort. We are very concerned that the municipality did not support or manage the contract fairly and that RMWB management is making inaccurate and incomplete statements about our operations.”

The Tok contract cancellation by RMWB came as a surprise to the company. The October audit identified numerous targets and commitments covered by the contract that had been previously missed. These included thresholds for complaints and delays, appropriate staffing levels, technology implementation timelines, and even temporary bus shelter construction standards. The municipality started to review various options once the audit results were complete, and decided that the in house option was the way to go for the best possible service to residents. Robert Kirby, the director of operations for RMWB, said “I’m certainly not going to debate him in the press, but our position is we’re doing this for … better quality of service, customer service, the safety.”

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Economic

Bank of Canada maintains overnight rate target at 3/4 per cent

Available as: PDF

The Bank of Canada today announced that it is maintaining its target for the overnight rate at 3/4 per cent. The Bank Rate is correspondingly 1 per cent and the deposit rate is 1/2 per cent.

Total CPI inflation in Canada has fallen as expected, reflecting the significant drop in oil prices. Core inflation remains close to 2 per cent and continues to be temporarily boosted by the pass-through effects of the lower Canadian dollar, as well as sector-specific factors.

The global economy is evolving broadly in line with projections in the Bank’s January Monetary Policy Report (MPR). The United States remains the main source of momentum in the global economy, while headwinds to growth linger in many regions. In this context, a growing number of central banks have taken actions to ease monetary conditions. Crude oil prices are close to the Bank’s MPR assumptions.

Canadian economic growth in the fourth quarter of 2014 was consistent with the Bank’s expectations. The oil price shock had a modest early impact on aggregate demand, and a larger effect on income. The Bank continues to expect that most of the negative impact from lower oil prices will appear in the first half of 2015, although it may be even more front-loaded than projected in January. Nevertheless, data for 2014 as a whole suggest the anticipated rotation into stronger growth in non-energy exports and investment is well underway.

Financial conditions in Canada have eased materially since January, in response to the Bank’s recent monetary policy action and to global financial developments. This easing is reflected across the yield curve and in a wide range of asset prices, including the Canadian dollar. These conditions will mitigate the negative effects of the oil price shock, further boosting growth through stronger non-energy exports and investment.

In light of these developments, the risks around the inflation profile are now more balanced and financial stability risks are evolving as expected in January. At present, we judge that the current degree of monetary policy stimulus is still appropriate and the target for the overnight rate remains at 3/4 per cent.

Information note:

The next scheduled date for announcing the overnight rate target is 15 April 2015. The next full update of the Bank’s outlook for the economy and inflation, including risks to the projection, will be published in the MPR at the same time.

Source:: http://www.bankofcanada.ca/2015/03/fad-press-release-2015-03-04/

      

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Alberta Economic Politics

Forecast for Alberta Budget Shows Surplus Close to Half a Billion Dollars

Alberta, budget surplus

The forecast for Alberta for the current fiscal year is showing an expected budget surplus of around $465 million, and a loss of 31,000 jobs in 2015 due to oil prices that continue to fall. If oil prices continue to plummet this expected budget surplus for Alberta could change though, and experts are warning that caution must be used. A previous statement made by Premier Jim Prentice predicted a budget deficit for Alberta of approximately $500 million. Prentice stated “We have taken steps to protect our financial position that will help keep us in the black. Contract settlements made by previous administrations and significantly lower resource revenues have created a very challenging fiscal outlook for Alberta. This requires a reset of our fiscal foundation to address a $7 billion revenue gap.”

The expected Alberta budget surplus could disappear without much notice if the economic environment continues the same way, and this warning has already been issued by Finance Minister Robin Campbell. There is expected to be a decline of 20% in gas and oil investments in 2015, and this will be one of the weakest growth years for the energy industry so far. Campbell said “Let’s be clear, we’re about $300 million in the black and that could disappear in a heartbeat. The combination of all of those things has actually helped us but I would suggest to you that if the oil prices were to drop considerably over the next month, we could see that very small surplus disappear quite rapidly.”

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Economic Ft Mac Health

Local Food Bank in High Demand, Working Poor Struggling

food bank, high demand, working poor

The local working poor in Fort MacMurray and Wood Buffalo are still struggling , and this can be seen by the high demand at the local food bank. There was a 75% increase in demand at the Wood Buffalo Food Bank when compared to the same time period last year. Only 10% of this increase was due to recent unemployment, the rest is by individuals and families who have an income but who are struggling to meet higher bills and food costs. Arianna Johnson, the executive director of the food bank, said “The gap between wages continues to grow. Part of January was cold, so utility bills were high. The cost of natural gas and electricity has gone up since last year, so that adds stress on families as well. The working poor, their income just isn’t enough to sustain their situations; their rent, their bills and food. Really though, only about 10% were here because of layoffs or the loss of employment of some sort.”

The high demand at the food bank from the working poor has put a strain on the available resources, and it shows that while the economy seems to be recovering many people and families have been left behind. Rising costs and stagnant wages mean that even a small increase in expenses in a month could mean a lack of food on the table. Johnson explained that the food bank recently had to purchase non perishables for the first time in January, usually donations last until around June. “We’ve never had to purchase non-perishables before June in my time with the food bank (four years), so that’s a concern for us. We’ve taken some steps to try and spread our food stocks out longer, but we’re also in the process of planning a few new food drives. If we have to continue to buy non-perishable food items, we will have to scale back and stop buying perishable food items, which decreases the health value and nutritional value of our hampers, which has a direct impact on the health and well-being … of the clients we serve.”

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Alberta Canada Economic Ft Mac U.S.

Presidential Veto Puts Keystone XL Pipeline on Hold Once More

keystone XL pipeline, presidential veto

The Keystone XL pipeline bill finally passed the Senate and the House, but a presidential veto on the bill has caused the project to go back into limbo once more. Once the veto was apparent Mitch McConnell, the majority leader of the US Senate, announced that the chamber with a majority of Republicans would work on getting the votes necessary to override the veto by March 3. Although US President Obama had stated previously that he would veto the pipeline bill if it passed both chambers and reached his desk many hoped that Obama would pay attention to the majority of Americans who are for the pipeline, and the jobs and economic opportunities that the project would provide. In the veto message that Obama sent out he wrote “Through this bill, the United States Congress attempts to circumvent longstanding and proven processes for determining whether or not building and operating a cross-border pipeline serves the national interest.”

The presidential veto of the Keystone XL pipeline is just the latest issue with the project, and with the problems that American citizens and Republican legislators have with this administration. John Boehner, the Speaker of the House and a Republican, slammed the decision by the president. “The president’s veto of the Keystone jobs bill is a national embarrassment. The president is just too close to environmental extremists to stand up for America’s workers. He’s too invested in left-fringe politics to do what presidents are called on to do, and that’s put the national interest first.”