Rogers, Bell buy control of MLSE

The Toronto Maple Leafs have some new owners as telecom giants Rogers and Bell Canada are teaming up to buy a majority stake in Canada's biggest sports franchise company, Maple Leaf Sports & Entertainment, for $1.3 billion.

The two companies, fierce rivals in the business of cellphone and Internet services, said Friday they will each pay current owner the Ontario Teachers' Pension Plan about $533 million for a 37.5 per cent chunk of the sports ownership company.

MLSE owns the Leafs of the NHL, the NBA's Toronto Raptors, Major League Soccer's Toronto FC, the Toronto Marlies of the AHL and the Air Canada Centre.

Value (in millions US) of major teams under MLSE control, according to most recent studies by Forbes:

Maple Leafs (NHL): $521

Raptors (NBA): $399

Toronto FC (MLS): $44*

*2008 value. All others 2011.

—CBCSports.ca

The heads of both Rogers and Bell declared the deal a victory for sports fans and one that will keep the company in Canadian hands. Both companies own broadcasting properties and are hungry for content to fill devices from living room TV sets to iPhones to computers.

"It will definitely bring fans closer to the action," George Cope, president and CEO of Bell Canada parent BCE Inc. (TSX:BCE), said at a news conference.

"This is a perfect fit for Bell from a strategic perspective" as it dovetails nicely with the company's acquisition last year of the CTV television network and its TSN sports channel, Cope added.

"This investment fits squarely into our strategy of securing premium content and making it accessible to Canadians when, where and how they want it."

Rogers already owns the Toronto Blue Jays baseball team and their stadium, the Rogers Centre, as well as the broadcaster Sportsnet.

"MLSE offers some of the richest, most sought-after content in North America," said Rogers president and chief executive Nadir Mohamed.

"This investment will secure us access to this iconic brand and content It will keep ownership of MLSE in Canadian hands and that's an important point. It will substantially bolster Sportsnet and will complement our existing world-class portfolio of sports properties."

Through his company Kilmer Sports, minority owner Toronto businessman Larry Tanenbaum will increase his current 20 per cent stake in MLSE to 25 per cent.

The surprise deal came a few weeks after Teachers' announced it had given up trying to sell the stake in sports company, which it bought 17 years ago for $180 million. Shortly after that, Bell and Rogers (TSX:RCI.B) stepped forward with a bid that met all of its original terms and conditions, Teachers' said.

"We are proud of this iconic company, in which we first invested in 1994," Jane Rowe, senior vice-president of Teachers' Private Capital said in a statement.

"It is second to none in the industry and has a very bright future. We believe that Bell and Rogers, with their MLSE partner Kilmer Sports, will deliver on the company's potential."

"We will continue to cheer for the teams and look forward to celebrating their success, but after the summer, from the sidelines," she added later at a news conference.

Tanenbaum will remain as chairman of MLSE and as a governor of the NHL, the NBA and Major League Soccer.

"I am proud this is a made-in-Canada deal that will bring resources and expertise to help us win on and off the ice, court and pitch," Tanenbaum said.

"This is a terrific path forward for our teams and our fans. It will ensure MLSE continues to make a positive impact in Toronto and across this great country of ours."

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Europe's debt crisis a risk here, Bank of Canada warns

Global financial conditions stemming from the debt crisis in Europe are deteriorating rapidly, placing Canada's economy under greater stress and Canadians with large debts at greater risk, warns the Bank of Canada.

The central bank's semi-annual financial stability review says bluntly that Canadians need to start worrying about the worsening debt mess in Europe, and its ability to hit home hard.

"Since June, the global retrenchment of risk associated with the European crisis has indeed resulted in a significant correction in the prices of equities and other risky assets, as well as a widening of credit spreads in Canada," the bank states.

"Should the crisis deepen and spread further to the larger European economies, transmission to Canada could become more severe ... An adverse outcome for Europe would also raise the risk of a significant impairment of funding conditions for Canadian institutions."

The report notes that the Canadian banking sector's direct exposure to the debt problems in Europe are limited, ranging from virtually zero per cent of the capital they hold in the case of Greece and Portugal, to a high of 3.4 per cent with respect to Italy.

But the analysis adds that the spillover effects on the global economy touches almost every aspect of Canada's economic and financial system, from trade, to the financial system to consumer and business confidence.

"The (bank's) governing council judges that the risks to the stability of Canada's financial system are high and have increased markedly over the past six months," the review states.

A major area of concern for the bank is the high level of indebtedness of Canadian households that have taken advantage of the low interest rate environment of the past several years to buy homes, cars and other items on credit.

The bank says while credit growth has slowed recently, it worries that it continues to rise faster than incomes despite persistent admonitions from policy-makers that one day interest rates will rise, and monthly payments to service debt will increase.

Although household debt-to-income is now at a record 149 per cent, higher than even in the United States, the bank fully expects that ratio to increase further.

That leaves Canadian households vulnerable to a shock, such as a sharp rise in unemployment caused by an economic slowdown or a significant decline in house prices, which would sap household wealth.

The bank regards the situation serious enough that it advises the government to "continuously assess the risks arising from the financial situation of the household sector."

Recently, the International Monetary Fund said Ottawa may need to again revisit eligibility rules for obtaining mortgages, even though the federal government have tightened conditions three times in as many years.

The bank doesn't go that far, but notes that after March — the last time mortgage requirements were stiffened — mortgage credit slowed, but has since picked up.

The bank also cautions that low interest rates and the weak performance of markets is putting the squeeze on pension plans, which are at a higher risk of being unable to meet their financial obligations.

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FAQ on Europe's 'fiscal union'

All European Union states except Britain moved toward setting up a new treaty Friday, giving up crucial powers over their own budgets in an attempt to overcome a crippling debt crisis.

All 17 countries that use the euro are definitely signing up. Nine non-euro states — Denmark, Latvia, Lithuania, Poland, Romania, Bulgaria, Hungary, Sweden and the Czech Republic — said they would consult their parliaments before joining in. In some of those countries, however, parliaments are less than enthusiastic.

The U.K. gave a clear "no" after it failed to get the eurozone to approve special safeguards for its financial center from EU regulation.

For the past two years, the countries that share the euro have been rocked by a debt crisis that has recently threatened the survival of the currency. Germany and France in particular argued that only tough rules enshrined in a treaty would convince markets that all countries will be able to repay their debts and a similar crisis will never happen again.

Debt brakes in national constitutions. All 23 countries commit to keep their deficits below 0.5 per cent of economic output. That cap can be broken to counteract a recession or in other exceptional circumstances. The European Court of Justice will make sure all states' debt brakes are effective.

More automatic penalties for deficit sinners. In the past, governments often protected their partners from being punished.

All states have to tell their partners in advance how much debt they plan to take on through bond sales.

The eurozone, together with other willing EU states, will give as much as 200 billion euros to the International Monetary Fund to help it rescue troubled nations.

The eurozone's permanent bailout fund, the European Stability Mechanism, will take over from the current rescue fund, the European Financial Stability Facility, one year ahead of schedule, in July 2012. Unlike the EFSF, the ESM has paid-in capital, similar to a bank, and is therefore more credible on financial markets.

The ESM's decision-making process was simplified in emergency situations, allowing struggling countries to get financial help if an 85 per cent majority of capital holders agree. That is meant to stop small countries from blocking or slowing down urgent rescues, as has happened in the past.

The eurozone eased rules that have forced banks and other private investors to take losses when a country gets a bailout from the ESM. The previous push to inflict losses on bondholders has been blamed for exacerbating the crisis.

Eurozone leaders did not decide to boost the overall firepower of their own bailout funds, which is currently limited to 500 billion euros. They promised to reconsider that cap in March, shortly before the ESM comes into force.

They did not agree to more intrusive powers for the European Commission over the fiscal policies of wayward states, as had been demanded by European Council President Herman Van Rompuy and some nations. Instead, they promised to "examine swiftly" much more lenient proposals from the Commission.

They did not allow the bailout funds to directly recapitalize failing banks. That could have prevented countries from taking on more debt when they have to bail out lenders.

Stock markets and the euro rose modestly in reaction to the deal, but many details remain to be worked out. Much will depend on whether the stricter fiscal rules can persuade the ECB to unleash massive funds to buy up bad eurozone debt.

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Encana questions fracking findings in U.S.

The U.S. Environmental Protection Agency may have linked fracking — a controversial method of improving the productivity of oil and gas wells — to groundwater pollution for the first time.

An Encana warning sign on a farm field gate in Pouce Coupe, B.C. Betsy Trumpener and Robert Doane/CBC

The EPA announced Thursday that it found compounds likely associated with fracking chemicals in the groundwater beneath Pavillion, a Wyoming community where residents say their well water reeks of chemicals.

The EPA said its announcement is the first step in a process of opening up its findings for review by the public and other scientists.

"EPA's highest priority remains ensuring that Pavillion residents have access to safe drinking water," said Jim Martin, EPA regional administrator in Denver. "We look forward to having these findings in the draft report informed by a transparent and public review process."

The EPA also emphasized that the findings are specific to the Pavillion area. The agency said the fracking that occurred in Pavillion differed from fracking methods used elsewhere in regions with different geological characteristics.

The fracking occurred below the level of the drinking water aquifer and close to water wells, the EPA said. Elsewhere, drilling is more remote and fracking occurs much deeper than the level of groundwater that would normally be used.

Calgary-based Encana owns the Pavillion gas field. An announced $45-million US sale to Midland, Texas-based Legacy Reserves fell through last month amid what Encana said were Legacy's concerns about the EPA investigation.

Encana spokesman Doug Hock said there was much to question about the draft study. The compounds EPA said could be associated with fracking, he said, could have had other origins not related to gas development.

"Those could just have likely been brought about by contamination in their sampling process or construction of their well," Hock said.

The low levels of hydrocarbons found in local water wells likewise haven't been linked to gas development and substances such as methane are naturally occurring in the area.

"There are still a lot of questions that need to be answered. This is a probability and it is one we believe is incorrect," Hock said.

In a statement on its website, Encana says it remains committed to seeing that the investigations into determining the source of the compounds found in the Pavillion groundwater are backed by sound science that is reviewed by independent peers.

But environmentalists welcomed the news of the EPA report, calling it an important turning point in the fracking debate.

'Those of us who suffer the impacts from the unchecked development in our community are extremely happy the contamination source is being identified.'— Pavillion resident John Fenton

"This is an important first indication there are potential problems with fracking that can impact domestic water wells. It's, I think, a clarion call to industry to make sure they take a great deal of care in their drilling practices," said Steve Jones of the Wyoming Outdoor Council.

Pavillion resident John Fenton, chairman of the group Pavillion Area Concerned Citizens, applauded the EPA for listening to the homeowners with contaminated water.

"Those of us who suffer the impacts from the unchecked development in our community are extremely happy the contamination source is being identified," Fenton said.

The finding could have a chilling effect in both Canada and the U.S. where various levels of government are trying to determine how to regulate the controversial process. Hydraulic fracturing involves pumping pressurized water, sand and chemicals underground to open fissures and release natural gas and oil trapped in the rock formations.

The industry has long contended that fracking is safe, but environmentalists and some residents who live near drilling sites say it can poison groundwater and release toxic gas into the air.

As part of the investigation, the EPA drilled two deep monitoring wells in the local aquifer and found synthetic chemicals, like glycols and alcohols consistent with gas production and hydraulic fracturing fluids. It also found benzene concentrations well above Safe Drinking Water Act standards and high methane levels in the deep wells.

The EPA also sampled drinking water from area wells and found chemicals consistent with migrations from areas of gas production in the drinking water, but still below established health and safety levels. Nevertheless, health officials advised residents not to drink their water or use it for cooking.

"Given the area’s complex geology and the proximity of drinking water wells to ground water contamination, EPA is concerned about the movement of contaminants within the aquifer and the safety of drinking water wells over time," said the draft report on the investigation released on Thursday.

The EPA announcement has major implications for a vast increase in gas drilling across North America in recent years.

Fracking has played a large role in opening up many Canadian natural gas reserves, but questions have been raised about the practice from northern British Columbia to New Brunswick.

"The public is more involved than ever in trying to understand what's going on with resource development, and we have to do a better job of explaining what's going on underneath the ground, what the resource looks like and how we operate," said Travis Davies, who is with the Canadian Association of Petroleum Producers. With files from The Associated Press

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Push for climate deal hinges on U.S., China

The United States, China and India could scuttle attempts to save the only treaty governing global warming, Europe's top negotiator said Friday hours before a 194-nation U.N. climate conference was to close.

After two weeks of negotiations, talks went through the night Thursday with delegates struggling to keep Durban from becoming the graveyard of the 1997 Kyoto Protocol on global warming.

"If there is no further movement from what I have seen until 4 o'clock this morning, then I must say I don't think that there will be a deal in Durban," said Connie Hedegaard, the European commissioner for climate action.

The proposed package would see the European Union extend its commitments to reduce greenhouse gas emissions under the 1997 Kyoto Protocol, but only if all other countries agree to negotiate a new treaty with legally binding obligations for everyone, not just the wealthy Kyoto group.

The EU has said it will not renew its emissions reduction pledges, which expire in one year, without agreement to begin work on a treaty to replace the Kyoto accord that would compel all countries to control their emissions, including the United States and China, which are the world's two largest polluters. The U.S. never ratified the protocol, though it has made voluntary efforts to reduce emissions.

The Europeans won critical support late Thursday from an alliance of small islands and the world's poorest countries — about 120 nations altogether — for its proposal to start negotiations now on a deal to take effect in 2018 or possibly after 2020. Brazil and South Africa also said they would accept binding emissions limits under a new agreement. The two countries are among the countries in the so-called developing world that emit the most greenhouse gases.

Ministers or senior negotiators from 28 countries then worked late through the night to try to bring the U.S., China and India on board.

Hedegaard said the three countries are still not on board and could scuttle the deal.

A man dressed as a tree holds a fake U.S. dollar note as he protests during a climate change conference in Durban, Dec. 8. Schalk van Zuydam/AP Photo Both China and the U.S. have said they would be amenable to the EU proposal to negotiate a post-2020 agreement, but each attached riders that appeared to hobble prospects for unanimous acceptance.

Canada has said it is prepared to sign a comprehensive treaty as early as 2015 but will not be part of any extension of the Kyoto approach to cutting carbon emissions.

The United States, whose Congress is generally seen as hostile on the climate issue, is concerned about conceding any competitive business advantage to China. Beijing, too, is resisting the notion that it has become a developed country on par with the U.S. or Europe, saying it still has hundreds of millions of impoverished people.

Rich countries are legally bound to reduce carbon emissions while developing countries take voluntary actions.

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$9B Joslyn oilsands project gets green light

Minister of Natural Resources Joe Oliver says Alberta's Joslyn North mine project has been approved. Sean Kilpatrick/Canadian Press

Natural Resources Minister Joe Oliver says Canada's environmental review process takes too long and it should be streamlined so it doesn't last any longer than two years.

Oliver made the statement in announcing federal approval for French oil giant Total's Joslyn North oilsands mine project 65 kilometres northwest of Fort McMurray, Alta.

"I think the regulatory process should be completed within a reasonable amount of time and that time should be a couple of years," said Oliver.

It took six years for Total to get environmental approval for the project, which faced opposition from environmental groups. Oliver said that was unacceptable, but didn't offer specific suggestions on how to shorten the process.

Oliver told reporters the mine could bring as much as $9 billion in new investment in Canada. Total says the project will create thousands of jobs.

The opposition wasn't impressed with Oliver's statements about the environmental assessment process.

"You can wave a wand and say you are going to drop it from six [years] to four to two. Well, why not one? Why not not have it? Why not six months? If you think you know what the predestined outcome of the process is going to be, then why have the process?" asked MP David McGuinty, the Liberals' natural resources critic.

The Joslyn project is slated to be up and running at full production by 2017.

At full capacity, it will produce 100,000 barrels of bitumen a day. Total estimates are that the mine will yield more than 874 million barrels over its 20-year lifespan.

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Dollar falls on Europe worries

The Canadian dollar fell by more than a cent Thursday on disappointment that the European Central Bank has no plans for large-scale government bond purchases, to help drive down the borrowing costs of deeply-indebted eurozone members.

The loonie closed down 1.19 cents at 97.79 cents US.

Markets also dropped ahead of a crucial summit of European Union leaders in Brussels Friday which is aiming to find a convincing solution to the European debt crisis.

The S&P/TSX composite index tumbled 196.94 points, or 1.6 per cent, to 11,951.79.

In New York, the Dow Jones industrials were off 198.67 points, or 1.63 per cent, at 11,997.70, the Nasdaq composite index dropping 52.83 points, or 1.99 per cent, t0 2,596.38 and the S&P 500 index stepping back 26.66 points, or 2.11 per cent, at 1,234.35.

"People are very nervous that Europe will yet again fail to adequately address the sovereign debt crisis," says David Kelly, chief market strategist for JP Morgan Funds in New York.

S&P/TSX 3-month chart

Traders had been hoping for a bond-purchase program, but the ECB has been vocal in maintaining it does not want to be seen as the lender of last resort.

"The ECB doesn't want to fall into the trap where they are just always expected to come to the rescue," said Gareth Watson, vice-president investment management and research at Richardson GMP Ltd.

"This is just kind of tough love and unfortunately tough love does not work out so well in the marketplace."

The January crude contract on the New York Mercantile Exchange closed down $2.15 to $98.34 US a barrel and February gold dropped $31.40 to $1,713.40 US an ounce.

European bourses also shed early gains with London's FTSE 100 closing down 1.14 per cent, Frankfurt's DAX declining two per cent and the Paris CAC 40 dropping 2.53 per cent.

With files from The Canadian Press

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Canada swings to $885M trade deficit

Merchandise exports declined three per cent and imports rose 1.9 in October, as Canada's trade balance slipped back into deficit.

Statistics Canada reports the country's trade balance with the world fell into a deficit of $885 million in October from a surplus of $1 billion in September.

The agency says exports decreased to $38.4 billion in October, as both prices and volumes fell.

Industrial goods and materials, and energy products sectors led the decline, while automotive products was the only sector to record a gain during the month.

Imports reached a record high of $39.3 billion, as volumes increased 1.3 per cent, led by machinery and equipment, followed by energy and automotive products.

Imports from the United States rose three per cent to $24.5 billion, their highest value since October 2008, while exports fell 0.9 per cent to $27.6 billion.

As a result, Canada's trade surplus with the United States narrowed to $3.1 billion in October from $4.1 billion in September.

Exports to countries other than the United States fell 7.9 per cent to $10.8 billion. Imports from countries other than the United States edged up 0.1 per cent to $14.7 billion.

Canada's trade deficit with countries other than the United States increased to $4 billion in October from $3 billion.

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VIDEO: The Wealthy Barber Returns

Bestselling author David Chilton says Canadians aren't well-served by exorbitant mutual fund fees, an epidemic in the industry that he says eat into returns over time.

In an interview on the CBC's Lang & O'Leary Exchange, he told CBC's Amanda Lang that the fees mutual fund companies charge Canadian investors to manage their money "are high by any common sense standard".

While fund managers get paid in a variety of ways, one of the most common is what's known as the Management Expense Ratio, or MER. That's the percentage of the fund's assets that goes to the fund manager, before any returns are given to unitholders.

A recent study by fund monitoring company Morningstar found that Canadian mutual funds have a median MER of 2.31 per cent. That's higher than those in most developed economies, including the U.S., where funds have a median MER of 0.94 per cent.

Industry advocates say that's a misleading comparison for many reasons, since the fund industry is a competitive marketplace and investors get all sorts of value-added management for their money. But in the interview, Chilton rejected those claims.

"There's pressure on the industry now to bring fees down and probably that's a good thing," Chilton said.

CBC business commentator Kevin O'Leary says Canadian funds are sometimes higher because of the nature of Canada's investment market. U.S. funds enjoy economies of scale from being larger.

But Chilton disputes that notion. "There's not a lot more work managing $2 billion as opposed to $200 million," he said.

(In the interest of full disclosure, O'Leary is chairman of O'Leary funds, a Toronto-based money manager.)

Chilton says there's no good reason for a Canadian equity fund to charge in excess of two or more per cent to buy widely available large-cap dividend-paying stocks. "That's nutty," Chilton said. "and … I don't meet anybody in the industry who denies that's nutty," he said.

Those costs can add up. Assuming an average five per cent annual return, $10,000 invested over 45 years in a fund that charges 0.5 per cent will mean $17,783 to the fund manager, while the investor gets $72,066. But if that management fee jumps to 2.5 per cent, the investor ends up making less than half what his professional help does, with $60,356 going to the manager and $29,493 going to the investor.

Chilton also expressed concern with some of the new Exchange Traded Funds coming to market. ETFs made a big splash when they came to Canada in the 1990s by allowing investors to cut fees by indexing major stock markets and get in and out of the funds easily, because they trade on stock exchanges themselves.

"The initial version of ETFs, broad baskets of securities to match major markets at a low cost, [they're] tough to argue with," Chilton said. "But I'm a little concerned about some of the new entries into the field."

That's because new ETFs are becoming niche products, getting involved in illiquid investments, with more and more derivatives underlying them — not simply baskets of common stocks as they were originally. That opens them up to all sorts of counterparty risks and has also caused fees to inch higher.

Click here to see the complete David Chilton interview, or watch the player above.

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China's economy slows

New figures show China's industrial production slowed to its slowest pace in two years in November.

The country’s National Bureau of Statistics Friday reported that industrial output rose 12.4 per cent.

In another sign that the world’s second largest economy is losing momentum, the government reported inflation cooled to 4.2 per cent last month from 5.5 per cent in October.

Still, the official Xinhua News Agency reported that the Communist Party's powerful Politburo agreed during its meeting Friday to keep to a "prudent" monetary policy.

That’s a catch phrase for keeping a lid on inflation.

Leaders were widely expected to remain cautious about stimulating growth given an upcoming leadership transition next year, the uncertain global situation and concerns over the potential for inflation to rebound.

China has experienced a surge in labour unrest recently and public dissatisfaction over the widening gap between rich and poor, corruption, pollution and other issues have added to jitters as the party prepares for a transition next year to a new generation of leadership.

Moves toward an easier monetary stance may come as early as next week at an annual economic work conference in Beijing next week that will set policy for the coming year could spell out measures to encourage growth, but China must try to balance that with the concern that too much stimulus could touch off another round of excess investment and inflation.

Escalating price increases remain a risk, given retail sales rose by 17.3 per cent in November compared with the same month a year earlier. That was up slightly from October.

China's latest bout of inflation was fuelled by a stimulus-led binge in bank lending in 2009 that helped fend off the global crisis. Much of it was squandered in excessive investments in construction and real estate.

China's economy has been slowing for most of the year, with growth expected to drop below nine per cent in 2012. GDP growth in the quarter that ended in September was 9.1 per cent.

With files from The Associated Press

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Canadian firms planned to spend more on R&D in 2011

Businesses in Canada planned to spend $15.6 billion on industrial research and development in 2011. That is five per cent higher than the $14.9 billion they planned to spend in 2010. iStock

Research and development spending by industry is expected to increase in 2011 — the first time in four years that has happened in Canada.

"The 2011 industrial R&D spending intentions suggest that recovery is underway after three consecutive years of declining R&D spending that occurred across almost all industrial sectors," said a Statistics Canada report Friday.

Businesses in Canada planned to spend $15.6 billion on industrial research and development in 2011. That is five per cent higher than the $14.9 billion they had planned to spend in 2010, but still below the $16.8 billion they spent in 2007.

The communications sector showed the biggest relative increase, at 21.4 per cent, followed by aerospace at 8.2 per cent.

Each of those industries planned to spend $1.4 billion this year. Scientific research and development services planned to spend the largest amount, at $1.7 billion, but that was an increase of 1.1 per cent compared to 2010.

In addition to planned spending in recent years, the Statistics Canada report also looked at actual spending for years where data was available.

It found that industrial R & D activities provided the equivalent of 149,900 full-time jobs across the country in 2009, down 11.8 per cent from 2008.

The companies themselves provided 79 per cent of the funding for their research and development activities. However, 13 per cent came from foreign sources, two per cent came from the federal government, and the rest came from other Canadian sources such as provincial governments and contracts with other firms.

Over the longer term, the number of companies performing research and development has increased from 9,648 in 1997 to 24,203 in 2008.

Nevertheless, Canada's R & D spending-to-GDP ratio "continues to lag the average for all OECD member countries" and has fallen from 1.3 in 2001 to 1.0 in 2009, the same level it had in 2004, the report said. Meanwhile, the U.S. ratio increased to 2.0 in 2008 from 1.7 in 1994.

The countries with the highest relative R & D spending were Israel and Finland, which had ratios of 3.4 and 2.8 respectively. In 2009, the most recent year for which provincial data was available, Ontario and Quebec accounted for more than 75 per cent of industrial R & D spending across the country.

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Shuttered US auto plants being reused, report finds

A woman walks next to the abandoned Packard Motor Car Company building, that ceased production in the 1950's, in Detroit, Michigan December 18, 2008. Rebecca Cook/Reuters

A new report finds about half of all U.S. automotive plants that have closed since 1979 are being reused, with much of that activity coming in the past few years.

The Ann Arbor, Mich.-based nonprofit Center for Automotive Research's report released Thursday finds that of the 267 assembly and parts plants closed during that period, 128 have found or are finding new life.

Forty percent of the sites surveyed were bought for a new use between 2008 and 2010, during which General Motors and Chrysler went through restructuring and bankruptcy reorganization.

An Associated Press analysis released in January 2010 found that of 128 major manufacturing plants in North America closed since 1980 by the Detroit Three and their largest suppliers, three of every five sat idle.

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Toyota cuts earnings forecast 54%

Toyota Motor Corp. has lowered its forecast for annual earnings, and is on track to lose its place as the world’s largest automaker.

The firm said Friday it expects to finish the fiscal year ending in March with a net profit of $2.3 billion Cdn, down 54 per cent from the target it projected in August.

It blamed a strong yen and massive flooding in Thailand for the sharp downgrade.

Japan's biggest automaker fell to number three in global rankings for vehicle sales during the first six months, trailing General Motors and Volkswagen.

It cut its estimate for worldwide sales to 7.38 million from the 7.6 million it predicted four months ago.

Japanese car makers were first hit with the earthquake and tsunami in March and their suppliers in Thailand were hit by the worst flooding in half a century this autumn.

The flooding will cut output by 230,000 vehicles, Toyota executive vice president Satoshi Ozawa said.

But among Japan's car makers, Honda Motor Co. has been the worst hit by the floods. It has yet to release forecasts as a result.

Compounding the pain is a strong yen, which hit multiple historic highs against the dollar this year.

With jitters about European and U.S. economies, global investors have turned to the yen as a relative safe haven.

For exporters like Toyota, a strong yen reduces the value of overseas profits when repatriated and makes Japanese products less competitive on prices in markets outside Japan.

With files from The Associated Press

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Britain leads push against new Europe deal

The European Union's president said Friday that 26 of its 27 member countries are open to joining a new treaty tying their finances together to solve the euro crisis. Only Britain remains opposed, creating a deep rift in the union.

In marathon overnight talks, the 17 countries that use the euro gradually persuaded the others to consider joining the new treaty they would create. Some of those countries may face parliamentary opposition to the treaty, which would allow for unprecedented oversight of national budgets.

"Except for one, all are considering participation," EU President Herman Van Rompuy told reporters.

A document released near the end of a high-stakes EU summit Friday said the leaders of nine of the 10 EU countries that don't use the euro "indicated the possibility to take part in this process after consulting their parliaments where appropriate."

In drafting a new treaty, the countries hope to help European nations struggling with giant debts over the long term, and in that sense there were early indications of success. Such an agreement is considered necessary before the European Central Bank and other institutions commit more money to lowering the borrowing costs of heavily indebted countries like Italy and Spain.

"It's a very good outcome for the euro area, very good," ECB President Mario Draghi said in Brussels. "It is going to be the basis for much more disciplined economic policy for euro-area members. And certainly it is going to be helpful in the present situation."

Stocks and the euro climbed on the news of the new treaty, even though it offers only a long-term solution and no immediate salve for a crisis that started in Greece, then plunged the whole eurozone into crisis and now threatens the global economy.

While the deal could help save the euro, the political implications of the rift could be enormous. Germany and France had hoped to persuade all 27 EU countries to agree to change the treaty that governs their union. But Britain, which doesn't use the euro, firmly said no.

Britain's leaders argued that the revised treaty would threaten their national sovereignty and damage London's esteemed financial services industry. Germany and France, the eurozone's biggest economies, made clear that a deal among the 17 euro countries and whoever else wanted to join was better than nothing.

Hungary, the Czech Republic and Sweden said they would need to consult their parliaments, while the other six countries outside the eurozone — Denmark, Poland, Bulgaria, Romania, Latvia, Lithuania — agreed they wanted to join.

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BCE hikes dividend 5%

Three-month stock chart for BCE Inc. The company raised its dividend Thursday. CBC

BCE Inc. is raising its dividend by five per cent and using surplus cash to bolster its balance sheet as the telecom giant predicts strong growth ahead.

The Montreal-based telecommunications company and parent company of Bell Canada, said Thursday it will boost its annual dividend by five per cent to $2.17 per share for 2012. It's the seventh increase in the past three years, and payouts will begin in BCE's first-quarter payout, on April 15 next year.

"This reflects our confidence in delivering on our business plan, based on the Bell team's strong execution of our strategic imperatives and reinforced by a healthy balance sheet with ample liquidity," president and CEO George Cope said in a statement.

"We have the financial flexibility to reward shareholders, while supporting significant ongoing capital investment in Bell's broadband networks and services."

In addition to the dividend hike, the company will also buy back as much as $250 million worth of its own stock in a move designed to increase its share price and it plans to make a voluntary $750 million voluntary payment on its defined benefit pension plan.

Because it is tax deductible, the pension payment will provide BCE with about a $170-million boost to its free cash flow. It will also add an estimated three cents to adjusted earnings per share next year as it reduces expenses booked against earnings.

"The new share buyback program and voluntary pension contribution represent a well-balanced use of surplus cash," said chief financial officer Siim Vanaselja.

"In a financial climate of declining interest rates and weak equity returns, accelerating the cash funding of Bell's future pension obligation to preserve a strong solvency position in the pension plan is a prudent action."

BCE said Bell Canada's expected revenue growth will remain unchanged from prior guidance at between nine and 11 per cent, while the parent company's adjusted earnings per share should rise to a range between $3.10 and $3.15 from earlier guidance of $2.95 to $3.05.

UBS analyst Phillip Huang said BCE is continuing its "annual tradition" of raising its dividend.

"We believe the dividend increase and special pension contribution announcements are largely expected, but the buyback is a positive surprise," Huang wrote in a research note.

Huang called the special pension contribution financially attractive for BCE.

"Obviously, the voluntary funding will also reduce future pension funding and expense in the longer term."

But he said he considers the increased dividend of $2.17 at the low end of BCE's payout policy.

Huang said he expects earnings per share in fiscal 2012 to remain unchanged at his estimate of $3.25.

BCE is Canada's largest communications company, and a longtime staple in investment portfolios designed to profit from steady growth companies with a solidly dependable dividend. Aside from wireless and landline telephone services, broadband Internet and satellite TV, it also owns a stable of media properties including the CTV television network.

Shares in BCE were up 25 cents to $40.43 in morning trading on the Toronto Stock Exchange.

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