Nuclear reactor research part of $10M deal

The Saskatchewan government will be spending $5 million over five years, working with Hitachi Ltd. on nuclear research — including some design work on a small nuclear reactor.

On Thursday, the government and the Japanese company signed two agreements to work together, with much of the research being done at the University of Saskatchewan.

Hitachi will also contribute $5 million.

In addition to reactor design, the work will involve nuclear medicine, materials science and nuclear safety.

The University of Regina, the Saskatchewan Research Council and the Canadian Light Source Synchrotron will also be involved.

Nuclear power has been a controversial topic in Saskatchewan. The province produces most of Canada's uranium, but has no large reactors or nuclear waste facilities.

Following a series of public hearings at which many people said they were opposed to nuclear power plants, the debate about large reactors died down.

However, Premier Brad Wall has said small reactors might be something Saskatchewan could get behind.

Under the two memoranda of agreement announced Thursday, there will be research into the design and feasibility of small reactor technologies.

However in a news release, the government said "any decision on whether to pursue nuclear power in Saskatchewan is still many years away."

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Greece holds out for banks to ease terms

Greece warned Friday it might only go ahead with a debt swap plan that is a key part of its second bailout plan if at least 90 per cent of the private creditors who hold its bonds take part.

On July 21, European leaders agreed to a plan that would see banks, insurers and other financial institutions give Greece easier repayment terms on its bonds, a move expected to save the country 37 billion euros ($54 billion Cdn.).

In return, Greece must pay 43 billion euros ($60 billion) for a program that would provide collateral backing for the bonds out to 2020.

If the banks are unwilling the share the burden, it will be harder for richer eurozone governments to get voter support for the new aid plan

In a letter to foreign finance ministers, the government Friday said it "shall not be obliged to proceed" unless it could get at least 90 per cent of its eligible bonds swapped or rolled over. It also said 90 per cent of that must be bonds maturing between June 30, 2011, and Aug. 31, 2014.

"If these thresholds are not met, Greece shall not proceed with any portion of the transaction" if it determines — along with international partners such as the eurozone and International Monetary Fund — that the total contribution of the private sector is insufficient for the July 21 agreement to work, the letter said.

Greece had previously said 90 per cent was a target rather than a condition.

However, in recent weeks, speculation has mounted that it may fall well short of that target, perhaps enlisting only 50 per cent.

Amadeu Altafaj-Tardio, a spokesman for the European Commission, the EU's executive, said discussions with Greece's private creditors were "ongoing."

"We have no reason to think that the figure will be far from that (90 per cent) estimate," he said.

Greece has been relying on EU and IMF rescue loans from since last year to deal with its high debt servicing costs. In return it has promised to cut its deficit, aiming for a target of 7.5 per cent of gross domestic product this year from 10.5 per cent in 2010.

It has cut spending and raised taxes, but has struggled to meet its targets.

Greece's Finance Minister, Evangelos Venizelos, said Greece was in a "very difficult" situation.

"There is no doubt that the Greek economy is going through its most difficult time in many decades, the most difficult time in the last 37-40 years," he said in parliament.

Venizelos said the recession was deeper than initially predicted and the economy would contract by more than 4.5 per cent of gross domestic product — which would affect the country's targets.

Uncertainty over the ability of banks exposed to Greece and other debt-burdened European economies such as Ireland, Portugal, Spain and Italy to weather the crisis has weighed on the German stock market.

Its benchmark index, the DAX, has fallen 25 per cent this month, since bans on short selling in France, Spain, Italy and Belgium have made Germany the place of choice in which to hedge against losses in European stocks.

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Mounties probe Calgary-based mining firm

A Calgary-based mining company is under investigation by the RCMP over allegations of bribery in Mexico.

Blackfire Exploration Ltd.'s properties include a mine in Mexico where it's alleged the company made monthly payments to a local mayor to prevent protesters from interrupting the mine's operation.

An outspoken critic of Blackfire's mine was killed in Mexico in 2009, which led to a temporary shutdown of the mine. However, that homicide is not part of the RCMP investigation.

In a statement the company has said it did not knowingly bribe anyone, believing the money was being used for public works in a nearby town.

A critic of the mining industry applauded the RCMP's decision to begin investigating this type of allegation. The Mounties formed a special corruption unit three years ago to investigate Canadian companies operating abroad.

However, Mining Watch Canada spokesman Jamie Kneen says Canada's foreign corruption law is weak compared with other developed countries.

"The problem with the Canadian law is that it has some escape hatches built in," Kneen told CBC News. "Say if somebody was providing services and it's usual to pay somebody off to provide a service than that might be considered legal."

There's another loophole in the law, Kneen said.

"If the company can say, you know, well that was our man in Mexico that made that decision, we here in Canada didn't know what he was doing, then there's no accountability whatsoever under the existing law," Kneen said. "That's a real shortfall."

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CMHC results show changing housing market

New mortgage rules implemented this past spring have stemmed the flow of new buyers and put a chill on refinancing activity, the agency that insures Canada's housing market says.

The Canada Mortgage and Housing Corporation issued its second quarter results on Monday, and the numbers paint a picture of a housing market in flux.

In March, Finance Minister Jim Flaherty unveiled the latest round of tweaks to Canadian mortgage rules designed to make it harder for Canadians to bite off more debt than they can withstand.

Lenders typically require mortgage insurance for loans made to anyone who wants to buy a home with a down payment of less than 20 per cent of the purchase price. And the Canadian Bank Act prohibits most federally regulated lending institutions from insuring more than 80 per cent of the value of a home. Some do, but the CMHC is the ultimate backstopper of most highly-leveraged home loans.

The two main rule changes implemented in March were a reduction of the maximum amortization time to 30 years from 35, and a reduction in the maximum amount a homeowner is allowed to refinance — to 85 per cent of the value of the home, down from 90.

By the end of June, the impacts of those rules were already being felt, with the CMHC seeing an instant 10 per cent reduction in the number of mortgage insurance applications. That figure rebounded somewhat, but by the end of June, it was still five per cent below the level it was prior to the changes.

The move to 30-year amortizations was expected to somewhat reduce the number of new buyers. But the refinancing change has had a much more significant impact.

At the end of June, refinancings were down by 40 per cent, CMHC said Monday.

The agency has only recently started posting its quarterly results, because of changes to Ottawa's Financial Administration Act, which were laid out at the same time as the new mortgage rules came into play.

Despite the slowdown in new applicants, the total value of CMHC's loan portfolio was $536 billion at the end of June, a 9 per cent increase from $490 billion at the same point last year.

The CMHC has made it almost impossible to get a mortgage of more than 30 years, but it's interesting to note that the average amortization period actually crept slightly higher in the first six months of the year. The average CMHC-insured mortgage had an amortization period of 24.6 years at the end of June; it was 23.9 during the same period in 2010.

And the average outstanding loan amount on a Canadian mortgage was $158,894 at the end of June, CMHC says.

The agency saw little change in the number of people falling behind on their mortgage payments. CMHC views any home loan more than 90 days late on payment as being in arrears, and the mortgage arrears rate was steady at 0.4 per cent of all homeowners at the end of June.

That figure has remained steady since May 2010, the CMHC said.

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Canadian salaries inch higher

The average weekly Canadian salary inched 0.3 per cent higher to $876.27 from May to June, Canada's statistics agency says.

Statistics Canada said Thursday that the average non-farm employee payroll has increased by three per cent in the 12 months up to the end of June.

That's slightly ahead of Canada's official inflation rate, which eased to 2.7 per cent at the end of July.

The average salary increased, but it wasn't because people were simply working more. The average work week was 32.9 hours, unchanged from June 2010, Statistics Canada noted. Indeed, the average work week has now been unchanged for three consecutive months.

Paycheques got larger in every Canadian provinces, led by Alberta and British Columbia. The slowest growth was in Saskatchewan and Prince Edward Island.

The average weekly paycheque in Alberta was $1,041.45 in June, a five per cent increased compared to the same month in 2010.

Payroll employment increased by 63,600 from May to June, and by 258,100 (or 1.8 per cent) over the last 12 months.

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Buffett pumps $5B into Bank of America

Berkshire Hathaway will invest $5 billion US into America's biggest lender, a vote of confidence in the U.S. economy by one of the world's richest investors.

Bank of America will sell preferred stock paying an annual dividend of six per cent to Warren Buffett's company. Berkshire Hathaway also has an option to buy 700 million warrants for $7.14 a share.

The move buoyed financial shares, almost all of which moved higher on the New York Stock Exchange. Bank of America shares gained almost 20 per cent to $8.27.

The move came a day after Bank of America was heavily sold off after investors worried that the largest U.S. lender would have to come to market with new shares to raise money to pay off yet another round of bad losses related to subprime mortgages.

Buffett made a similar bet on investment bank Goldman Sachs in 2008 that worked out very well for him. His $5 billion investment was finally repaid this year, but Buffett got a 10 per cent dividend yield for his vote of confidence while he owned the stake.

More to come

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Keystone pipeline clears major hurdle

The U.S. State Department's environmental analysis of TransCanada's proposed Keystone XL pipeline has given the project a thumbs up.

State Department officials say there's no indication the pipeline would spur further oilsands production or pose any significant risks to the six U.S. states that it will cut through, as it carries crude from northern Alberta to Gulf Coast refineries in Texas.

"It's not a decision," State Department official Kerri-Ann Jones explained during a conference call. "It's one piece of the information that will be considered."

The assessment moves the administration of President Barack Obama a step closer to a final decision on the pipeline. It now has 90 days to determine whether the controversial project is in the national interest of the United States.

Alberta's Energy Minister, Ron Liepert, says the province is pleased the report was balanced and based on facts, not emotions.

The U.S. needs a secure supply of affordable oil and the pipeline can deliver it, along with economic benefits from the $7 billion project, he said.

The decision isn't a surprise to the big U.S. environmental groups that are fighting the pipeline. An official for one group, the National Resources Defense Council, said State Department officials failed to conduct many of the studies the environmentalists were demanding.

Among them was an examination of whether Keystone XL could be rerouted to avoid environmentally sensitive areas in the U.S. Midwest, and to assess whether pipelines are prone to leaks.

The State Department decision comes as anti-pipeline activists continue a two-week civil disobedience campaign outside the White House.

More than 250 people, including Canadian actors Margot Kidder and Fort McMurray-born Tantoo Cardinal, have been arrested as they try to convince U.S. President Barack Obama to block the pipeline.

Keystone XL has become a lightning rod for the environmental movement in the U.S. in the aftermath of failed climate-change legislation last year.

Environmental activists say the project is a disaster waiting to happen and are opposed to Alberta's oilsands due to the high levels of greenhouse gas emissions involved in their production.

"This is not the rubberstamp for this project," said Jones, disputing several big American environmental groups who immediately decried it as such.

"The permit that is required for this project has not been approved or rejected at all … it should not be seen as a lean in any direction either for or against this pipeline. We are in a state of neutrality."

Proponents, meantime, say the pipeline will create thousands of jobs and help end U.S. reliance on Middle Eastern oil.

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Magna invests $430M in electric cars

Magna International Inc. is spending $430 million to research and develop electric vehicle technology in Ontario, a move that will create more than 700 jobs in the province.

Economic Development Minister Sandra Pupatello, who together with the company made the announcement on Monday, said the province will contribute $48 million to help fund 19 research and development projects over the next six years.

The projects include developing concept electric cars, parts for hybrid vehicles, metallic components, alternative energy and ways to improve fuel efficiency.

The province said the plan will create 728 jobs and also help protect about 1,300 jobs at Magna's factories in Brampton, Aurora, Concord and St. Thomas, Ont.

"What powers our cars is changing, the pieces that go into making a vehicle are changing. The good news is that that change is happening here at Magna," Pupatello said.

"That, my friends, is a huge vote of confidence in the Ontario economy."

The province has been moving forward with plans to ramp up the development and production of more environmentally friendly vehicles and has provided grants to companies in the automotive industry.

Earlier this month, Toyota announced that the hybrid version of its popular RAV4 sport utility vehicle would be manufactured in Woodstock, Ont.

Last week, Dana Holding Corp. said the province provided a $2-million grant for heat exchangers for batteries at a plant in Cambridge, Ont.

On the Toronto Stock Exchange, Magna shares were up $1.42, or nearly four per cent, at $37.04 in late trading Monday.

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Encana plans Texas shale gas asset sale

Calgary-based natural gas producer Encana Corp. said Thursday it is trying to sell its assets in the Barnett shale formation in north Texas as part of a wider plan to raise up to $2 billion US, as it continues to weather a long period of low gas prices.

Encana shares closed down 89 cents, or 3.58 per cent, at 24.00 on the Toronto Stock Exchange.

"Encana continuously looks for opportunities to manage its portfolio of producing assets and improve the long-term value creation capacity of its vast resource portfolio," said Jeff Wojahn, president of Encana's U.S. division.

"These North Texas assets are high-quality, relatively mature producing properties that hold strong potential for future development."

The properties now produce 125 million cubic feet a day of natural gas and include processing facilities and pipelines. Encana wants to close a deal later this year or early in 2012.

An artist's rendering of a planned gas export terminal in Kitimat, B.C. Encana is one of several firms to look at shipping natural gas off the west coast to Asian markets, as gas prices remain stubbornly low in North America. Canadian Press/Encana Corp

Encana acquired the assets in 2004, just as new drilling techniques were increasing production from shale. Those advances have produced glut of natural gas in North America, pushing down prices.

Encana is one of several firms to look at shipping natural gas off the West Coast to Asian markets, where the gas can fetch a much better price.

The Calgary firm is also putting up for sale some of its gas processing and producing assets in Canada and the United States that no longer fit with its development plans.

Encana also said Thursday it is in talks with potential partners to invest in undeveloped lands.

In June, Encana called off negotiations with PetroChina to jointly develop properties in northeastern B.C. as the two parties failed to see eye-to-eye on how the assets would operate.

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Gasoline prices spike as Irene nears

Retail gasoline prices in the New York area rose sharply Friday, as Hurricane Irene threatened to roll over the city on Sunday.

Price tracking website GasBuddy.com showed many areas of the city, Long Island and Connecticut where gasoline was selling for more than $3.90 US a gallon, 30 cents higher than the national average.

Consumers were filling up as reports suggested refineries along the U.S. east coast will likely close. There are 10 refineries in the area that could be affected, responsible for more than seven per cent of total U.S. capacity.

Gasoline futures climbed on the New York Mercantile Exchange yesterday, closing with a gain of 4.59 cents, or 1.6 per cent, to end at $2.80 US a gallon.

With no companies announcing any closures, gasoline had given back some of that gain Friday, to close at $2.78.

The National Hurricane Center downgraded Irene to a Category 2 storm Friday morning and by 2 p.m. ET reported that its maximum winds had decreased to 155 km/h as it came within 500 kilometers of Cape Hatteras. It is forecast to affect a broad area, from North Carolina to Eastern Canada, with flooding and winds as high as 190 km/h.

Traders on the Nymex, shown in March, pushed gasoline futures higher by almost two per cent on Thursday. Mark Lennihan/Associated Press

Some forecasters think Irene could be the worst hurricane to hit the U.S. Northeast in 50 years.

Refineries are already starting to turn off equipment and tie things down.

"Even if the storm eventually misses them, they can't take chances," says Ben Brockwell at the Oil Price Information Service, which monitors fuel shipments around the country.

Refineries are sprawling complexes of concrete and steel that turn oil into gasoline, diesel and other kinds of fuels. While the main buildings are designed to withstand hurricane-force winds and earthquakes, some of their pipes, cooling towers and power lines are susceptible to wind damage.

Utilities are expecting widespread power outages from winds and downed trees.

It takes several days for a refinery to start operating again following a shutdown. And many would need almost a month to get back to full operation.

Tom Bentz, an analyst at BNP Paribas Commodity Futures, said traders are betting that supplies may be squeezed.

"There's the potential for certainly coastal flooding, potential for refinery outages, potential for shipping delays, things like that," Bentz says.

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What’s inside your Green Tea

What’s inside your Green Tea

Chocolate Will help you!

Chocolate Will help you!

Right after Apples dropped, is it time to purchase or even sell?

Right after Apples dropped, is it time to purchase or even sell?

Stocks move within wake regarding hurricane

Stocks move within wake regarding hurricane

Does Eating and working out Help Most cancers Survivors? Let’s Take A Look At This!

Does Eating and working out Help Most cancers Survivors? Let’s Take A Look At This!

Air Canada flight attendants turn down labour deal

Air Canada (TSX:AC.A) suffered yet another labour setback on Saturday with word its flight attendants have rejected a tentative agreement reached earlier this month.

The union representing the roughly 6,800 flight attendants, the Canadian Union of Public Employees, said in a news release that 87.8 per cent of those who voted gave the tentative agreement a thumbs down.

"The results send a strong message to the company," Jeff Taylor, President of the Air Canada Component of CUPE, said in the news release. "We have heard our members loud and clear."

"After a decade of concessions, the membership has clearly said it wants a fair deal, especially since the company is in a much better financial position," Taylor added.

The union noted that turnout for the vote was high, with 78.6 per cent of members casting a vote.

A strike vote will be organized for next month, and union officials will meet with management as soon as possible on resuming talks, Taylor added.

Air Canada issued a terse release acknowledging the rejection, but offered little other immediate comment.

The airline has grappled with serious labour troubles this year with its customer service agents going on strike for three days.

The two sides reached an agreement and the strike ended after the federal government indicated it would bring in back-to-work legislation.

Air Canada pilots also rejected an agreement hammered out earlier this year and they have yet to negotiate a deal. The airline is also negotiating with mechanics and baggage handlers, represented by the International Association of Machinists and Aerospace Workers.

A major issue in negotiations with all of the unions is over pensions.

The unions say the airline wants to establish a defined contribution pension plan for new hires, instead of the current defined benefit plan.

With defined contribution plans, the company's contribution is limited to a set, negotiated amount.

Payouts to retirees depend on the performance of the underlying investments. Defined benefit plans require a set amount to be paid to retirees.

Air Canada says high fuel costs are threatening its future profitability and it said this month it would raise fares and try to trim costs where possible to offset that.

The airline posted a $46 million loss in the spring quarter ended June 30 due to the cost of fuel.

But that was a big improvement over last year, when the losses were far greater.

Canada's largest airline and its regional partners carry about 31 million passengers annually to more than 170 destinations on five continents.

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Greek bond rates soar

Concerns that the latest bailout for Greece could unravel pushed interest rates on Greek 10-year bonds to record highs Thursday.

The 10-year bond yield climbed above 18 per cent. The Greek government's cost of borrowing money for 10 years is now 16 percentage points higher than Germany's.

Markets are concerned that demands from Finland, a Greek creditor, for collateral in return for rescue loans could undermine the latest rescue package.

Greece has been relying since last year on funds from a €110 billion ($156 billion Cdn.) package of bailout loans from other European Union countries and the International Monetary Fund.

On July 21, European leaders agreed on a second bailout, worth an additional €109 billion.

In Finland earlier this year, a nationalist, anti-bailout party won a large share of the votes in national elections. Since then, the Finnish government has struck a deal with Greece to secure cash guarantees for its share of the contributions to the bailout fund.

The other eurozone countries must still approve that arrangement. But if it goes through, four other contributors — the Netherlands, Austria, Slovenia and Slovakia — have said they will seek the same terms.

That has thrown into question whether the second bailout will unravel.

Other eurozone nations, including powerful Germany, oppose the deal because the collateral would come from the new bailout loans.

Finland has said it will not back down, although Prime Minister Jyrki Katainen said his government was open to amending details of the agreement.

The Greek government has been struggling to meet the targets laid out in the bailout agreements, imposing new austerity measures such as increased taxes and cuts to public sector pay and other spending.

Separately, Deputy Development Minister Haris Pamboukis resigned Thursday, following a dispute in a cabinet meeting over implementing spending cuts, adding to the perception that the government is divided as it struggles to deal with its debt crisis.

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Canada's travel deficit widens

The gap between what Canadians spend abroad and what tourists spend in Canada widened in the second quarter of 2011, to $3.9 billion.

That was a 3.1 per cent increase from the previous quarter, Statistics Canada said.

Americans took fewer trips to Canadian tourist destinations last quarter. CBC

Canadians spent $8 billion abroad in the April-to-June period. That was an increase of 4.4 per cent. At the same, foreign tourists spent $4.1 billion in Canada, a 5.7 per cent gain. That was the largest quarterly advance since the first three months of 2004.

Much of the deficit consisted of the gap between Canadian and U.S. travelers to each others' countries. Canadians spent $4.8 billion in the United States during the period, while American tourists spent $1.8 billion here — a total deficit of $3 billion.

The Canadian dollar gained 1.8 per cent on the U.S. dollar during the time frame, to an average value of $1.03 US.

Spending by Canadians in countries that aren't the United States was up five per cent to a new high of $3.2 billion in the second quarter. The number of trips Canadians took to overseas countries increased to its highest level since record keeping began in 1972 during the period.

Meanwhile, travelers from overseas countries spent $2.3 billion in Canada in the second quarter, up 5.7 per cent. This was the strongest increase since the fourth quarter of 2007.

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B.C. votes 55% to scrap HST

54.72% voted to scrap tax7% PST to take 18 months to reinstateAll previous PST exemptions to be restoredB.C. to repay $1.6B to federal governmentAccessibility Links

British Columbians have voted to scrap the province’s controversial harmonized sales tax, according to the results of a binding, province-wide referendum.

Elections B.C. announced on Friday morning that 54.73 per cent of the 1.6 million British Columbians who cast a ballot in the mail-in referendum voted to get rid of the tax and 45.27 per cent voted to keep it.

B.C. Finance Minister Kevin Falcon said the government will now move to reinstate the PST with all of its previous exemptions. The transition is expected to take at least 18 months he said.

Falcon said eliminating the HST and reinstating the PST will cost the province more than $3 billion, but the province has a plan already in place to manage the change.

"This is step backwards, but it is a manageable step backwards," said Falcon after the results of the referendum were announced on Friday.

The province will enter into negotiations with the federal government on repaying the $1.6 billion it was given when the tax came into effect, he said.

There will be costs in setting up a provincial sales tax collection agency and businesses will need time to transition back to the PST, he said.

B.C. Finance Minster Kevin Falcon says it will take the province about 18 months to reinstate the seven per cent PST and five per cent GST. CBC

Falcon says spending increases will also be curtailed, but Health and Education will be protected. And, he is promising to begin consultations with the public on how to craft a new tax regime starting in September.

"This is a lesson in public policy change," said Falcon.

Falcon said he was disappointed with the result of the vote but not surprised.

"We recognized when we started from a place where 85 per cent of the public was opposed to the HST, in large measure due to our mishandling of the issue, that we had an uphill battle."

Former premier Bill Vander Zalm, who led the campaign to scrap the tax, said the vote was a win for the middle class in B.C.

"They were the ones paying the freight and it was a benefit to the big corporations in our province especially those that are exporting our resources. They should contribute as opposed to getting a refund at the expense of the consumer," said Vander Zalm.

"More importantly too, I think it sends a message to politicians throughout our country especially that they can't simply do things because it's the will of the premier or the party; that they have to in fact, on issues big as we see it here, consult the people," said Vander Zalm.

Former premier Bill Vander Zalm, who led the campaign to scrap the tax, said the vote was a win for the middle class in B.C. CBC

B.C. NDP opposition leader Adrian Dix welcomed the result.

"We have good news: the people won over the arrogance of the Liberal government and its powerful friends. It is a victory for fairness," said Dix.

"For a decade, the Liberal Party has shifted the tax burden onto B.C. families. A return to the PST will be good for communities, good for families and good for small business. It will make life a little bit more affordable for working families. It will also ensure that British Columbia has control over its sales tax policy, now and in the future," said Dix.

Jim Sinclair, the president of the B.C. Federation of Labour called the vote a victory for the people of B.C.

"My reaction is good news for British Columbia. People voted for tax fairness and against governments who lie to them, and going forward we can do the things we need in this province and corporations will continue to pay their share of the taxes in British Columbia. It's a victory for people and multi-million dollar advertising campaigns weren't enough to convince people to vote against their own best interests," said Sinclair.

The office of Federal Finance Minister Jim Flaherty said the federal government will work with B.C. to roll back the tax, which has been administered by the officials in Ottawa.

"We respect the decision made by the people of British Columbia. We will work with the Government of B.C. on the transition. The provincial government has already repeatedly acknowledged that the $1.6 billion in transitional assistance will be recovered as per the agreement," said a statement issued by Flaherty's office.

But federal NDP MPs are already calling on Prime Minister Stephen Harper to forgive the debt.

“It would be both spiteful and damaging for Harper to now force B.C. to pay back $1.6 billion, after it was already invested in things like health care and education,” said NDP B.C. caucus chair Don Davies.

Helmut Pastrick, chief economist with Central One Credit Union and a member of the B.C. Economic Forecast Council said rolling back the HST will have a negative impact on the economy.

"I think overall it's somewhat negative for the B.C. economy longer term. Business investment will be somewhat more muted. Certainly in the short term, there'll be some mild benefit to consumers, more discretionary income.... But longer term this is a step backwards for B.C.'s competitiveness."

Adrienne Montani with the coalition for Poverty Reduction in B.C. said the vote would help lower income people.

"It means that in the short term anyway if we go back to the old regime, there are a number of things that are essential expenses that lower income people must spend on that will no longer be subject to an extra tax. So it's probably a good news story for their pocket-books at the moment," said Montani.

John Winter, the president and CEO of the B.C. Chamber of Commerce was concerned by the result.

"Significant disappointment, a long hard battle that was unsuccessful and certainly it's going to have a profound impact on the economy of this province and the time it's going to take over the next 18 months to revert back to the situation with the PST and GST combination and items that were subject to taxation under the provincial scheme, it's going to be a very long period of uncertainty," said Winter.

Former premier Gordon Campbell announced the surprise move to a harmonized sales tax in 2009, following his victory in the May provincial election.

The surprise announcement sparked widespread outrage and a campaign to repeal the HST spearheaded by former B.C. premier Bill Vander Zalm, who argued B.C. consumers would ultimately pay more under the tax.

Vander Zalm's popular campaign to repeal that tax ended up collecting more than 700,000 signatures on a petition to trigger a referendum.

The public backlash over the tax is also believed to be responsible for Campbell’s early retirement as premier. But before his resignation last fall Campbell said the results of the referendum would be binding.

Since July 2010 the HST has combined the five per cent federal GST with the seven per cent provincial sales tax for a harmonized 12 per cent tax.

Consumers pay an extra seven per cent tax on restaurant meals, airline tickets, funerals and haircuts — all items that were previously exempt from the PST.

As part of a campaign to keep the tax, Premier Christy Clark promised to cut the HST to 10 per cent if British Columbians voted to keep it.

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$3 billion damage bill as Irene heads east

Officials are still calculating the full impact of hurricane Irene, but early indications suggest that the storm's financial toll is not as bad as initially anticipated.

Estimates for what the storm might cost in financial terms were as high as $14 billion (all figures US dollars). But after making its way through the Caribbean and parts of the Carolinas, the storm had weakened significantly by the time it hit populous New York State.

Risk-modelling firm AIR Worldwide said the storm caused somewhere between $500 million and $1.1 billion worth of insured losses in the Caribbean, before heading northeast to the Carolinas, where California-based Eqecat estimated over the weekend that damage ranged between $200 and $400 million.

"It was certainly a major event, but it could have been much worse," Eqecat vice-president Tom Larsen told Bloomberg.

Residents walk along Hwy 12 in North Carolina, surveying Irene's damage. Jose Luis Magana/Reuters

Kinetic Analysis Corp. estimated the total damage bill to U.S. insurers was as low as $2.6 billion as the storm moved east into Atlantic Canada.

"The industry is expecting a total cost of somewhere between $3 and $5 billion in terms of privately insurance losses," Robert Hartwig, the president of the Insurance Information Institute told Bloomberg in a television interview Monday morning.

Tens of thousands of individual claims between the Carolinas and Maine are expected.

The year 2011 is shaping up as the 7th most expensive year in U.S. history for losses due to natural disasters, Hartwig said. U.S. insurers have already paid out roughly $35 billion in disaster-related claims this year.

More than two million people were ordered to evacuate in advance of Hurricane Irene's arrival on the U.S. East Coast —about 1.5 million of them in the New York and New Jersey areas. In addition to sporadic damage to individual homes and businesses, the storm has knocked out power to 3 million people along the Eastern Seaboard already.

And more than 10,000 flights were cancelled up and down the east coast of North America.

U.S. stocks rose Monday Irene wound up being less severe than many analysts anticipated. The lower damage estimates pushed insurance stocks higher.

Allstate Corp. rose 6.8 per cent, Hartford Financial Services Group Inc. rose 6.7 per cent, while Travelers Cos. Inc. rose 4.6 per cent.

The damage figures being quoted by the insurance industry do not cover the full impact of the storm's damage, because not all of it will be covered by private insurance. The cost of cleaning up public infrastructure is likely to be shouldered by governments, not insurers.

The Federal Emergency Management Agency is the government body that deals with natural disasters on the continental U.S. A program there allows states to be reimbursed as much as three-quarters of what they spend rebuilding by federal funds from FEMA.

That ratio can change ifan area is declared to be in a state of emergency. So far, few areas have been so-named, but that may change.

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