The Paleo Recipe Book

Wednesday, April 4, 2012

The politics of austerity

Don Pittis has been a Fuller Brush man, a forest fire fighter and an Arctic ranger before discovering journalism. He was principal business reporter for Radio Television Hong Kong before the handover to China and has produced and reported for CBC and BBC New. He is currently senior producer at CBC's Business Unit.

Ah, Austerity, there's nothing like it. It's the new panacea. U.S. President Barack Obama is talking about it. So's China. The Europeans are actually doing it, though so far they seem to prefer imposing it on their poorest neighbours first, as an experiment.

Here in Canada at budget time, austerity is on the lips of every federal and provincial finance minister.

Grim-faced, determined. "We don't want it, but we need it," they say.

It fits into the same category as cold showers, long brisk walks, fasting, and Rolfing — a kind of brutal massage given by large Swedish women. It hurts, so it must be good for you.

Having been raised by Presbyterians and Methodists, personally I don't mind the idea of being austere. Besides being morally stimulating, I think it has economic and social value. And the scientists back me up. Frugality and deferred gratification have been shown repeatedly to be good for an individual's economic well being.

If you don't believe me, check out the cute kids in the Stanford marshmallow experiment. Kids as young as four who choke down the marshmallow right away instead of delaying for a greater reward are doomed. They just don't do so well in later life.

When you think of credit card debt as the adult version of the marshmallow experiment, that makes a lot of sense.

And maybe it doesn't just apply to personal finances. Even as a society, a move to the Presbyterian kind of self denial may not be a bad thing, at least for a while.

The philosopher Max Weber certainly believed in it, crediting the Puritan work ethic as the engine for Euro-American capital accumulation.

Maybe Max was right. Having enjoyed the high life for a few decades, maybe we need a patch of hard work and frugality.

But I'm not sure that is what our politicians are up to.

Certainly the fearful example of Greece is helping to concentrate certain politicians' minds, which, as I have discussed before, is better than the alternative.

That said, national or provincial budgets are not the same as spending by households. If the adult marshmallow eaters amongst us go on a credit card spending spree, that is money we will never see again. We may still be paying back long after the shoes are out of style and the iPad embarrassingly retro.

Government spending is quite different. Money spent on teachers, say, or social services, or road building, does not disappear from the economy. A little may leak out of the country as foreign holidays or foreign built machinery, but since Canada sells more that it buys from the world, that's not really a problem. It stays and circulates, being taxed and re-taxed as if flows through the economy.

Finance Minister Jim Flaherty arrives to deliver the federal budget in the House of Common June 6, 2011. Finance Minister Jim Flaherty arrives to deliver the federal budget in the House of Common June 6, 2011. (Adrian Wyld/The Canadian Press)

One more advantage for governments. Unlike you and your credit card, Canada pays about 2 per cent for the money it borrows, as opposed to your 19 per cent.

So when a government decides to move from stimulus to anti-stimulus, it better be sure it's worth the price.

One of the prices can be a general depression of the economy.

If everyone gets the same idea at the same time the cumulative impact may be even worse than anyone realized. You, inspired by thoughts of a Swedish massage, buy fewer iPads, shoes and cars. Municipal, provincial and federal governments, inspired by Greece, reduce their spending on jobs and social programs. That, combined with a global trend to austerity, could mean another recession.

There are two more political dimensions to the current talk of austerity that makes the government kind unlike the Pesbyterian frugality mentioned above.

The banner of austerity can disguise other motivations. Saskatchewan, for example, rolling in dough, is cutting arts funding. Another difference is that the frugality is not one proposed and accepted by the individual seeking austerity, nor is it distributed evenly. Some get a cut imposed, while others are even more prosperous.

If we really wanted to accept the Puritan kind of austerity, accept it as a society, share its hardship and take a good Rolfing, there is a kind of austerity that only governments can impose — with the stroke of a pen. That is the cold shower, the bitter medicine, of an across-the-board one-time tax increase to wipe out the debt. Such a sharp short shock, followed by a sharp rebound could well be better economic solution than years of painful contraction.

Currently most politicians fear tax increases more than they fear the backlash from cuts. But that may be changing. The Los Angeles Times reports that two-thirds of Californians support a plan to raise taxes. And everyone knows Californians are trendsetters.

There is another saving grace coming from south of the border that may soften the impact of Canadian austerity. Although Mr. Obama and his friends may be mouthing the words, the G20 Toronto Declaration agreed right across the road from where I am sitting, does not require governments to start reining in their debts until 2013, after the U.S. presidential election.

As Obama knows, and as Prime Minister Stephen Harper knows too, austerity may be sold as a painful necessity at other times, but never during an election when somehow, there's always money to spend.


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Flaherty tries to calm pre-budget concerns

Finance Minister Jim Flaherty tried to allay worries that the federal budget he'll bring down Thursday will translate into severe service cuts.

When asked whether reports of $7 billion in spending cuts were on the mark, Flaherty said the cuts would be "moderate, modest," but would not be more specific.

He said his budget would not be as "draconian" as the ones the Liberals brought down in the mid-1990s. "Reducing spending in the provinces for health care, for education, for social services — we're not touching any of that," he told reporters while trying on a traditional new pair of budget shoes Wednesday. "The majority of the spending review reductions relate to back-office operations in government. They don't relate to service delivery by government."

The CBC's Chris Hall reported on Power & Politics some details of the budget Flaherty will table Thursday:

The budget's theme is "jobs, growth and long-term prosperity."Spending cuts will be closer to $4 billion – or five per cent of spending – than to the $8 billion target previously floated.The budget will detail how much each department will be cutting, but will not include details of the specific programs that will be cut.It will set out ways to reduce the cost of public service pensions, with a number of options available to bring them more in line with the private sector by increasing the amount employees pay.

Some details of spending cuts were already revealed on Wednesday by the Board of Internal Economy, the governing body of the House of Commons. It issued a memo to all MPs telling them the budget for the House of Commons is being slashed by $30.3 million, or 6.9 per cent of the total budget.

The cuts will be phased in and fully implemented by 2014 - 2015.

The office budgets for MPs will be cut by a total of $627,000 per year, for eventual savings of $2 million; a fund for office furniture in local constituency offices is being scrapped and other changes are being made to travel rules that are designed to save money.

Ottawa has asked federal departments and agencies to come up with budget-saving scenarios of five per cent and 10 per cent, which could mean up to $8 billion in cuts to programs and services, leading to nervousness about how some Canadians might feel the pinch.

The budget is expected to contain precious few details about precisely which jobs and programs will be lost, meaning Canadians won't know the full effects for several months. Some are warning that the spending blueprint will harm services and put the public at risk, while others, including Flaherty himself, are insisting that the austerity will not be painful.

Glen Hodgson, chief economist at the Conference Board of Canada, expects most of the cuts to be in the government's administrative ranks and to unpopular programs rather than front-line services.

"I think in the near term what we're going to see is compression of the number of public servants, levels of employment, compensation models — a much smaller operating model for the core federal government. And then there will be a trickle-out effect for a lot of other programs."

However, Hodgson added, some of the budget's effects will simply be deferred. Changes to Old Age Security benefits, for example, are expected to be phased in over several years.

The budget is expected to lay out new policy directions, he said, that will ultimately change the government's role in the lives of Canadians.

In the short term, observers say, the federal deficit for the current fiscal year — which ends in three days — will likely come in far lower than the $31-billion estimate the government released in November. Royal Bank chief economist Craig Wright predicted earlier this week the deficit could shrink to the $20-billion to $25-billion range — enough to allow Ottawa to balance its books a year or two earlier than its current 2016-17 projection.

The opposition leaders have their doubts that the cuts will be judicious.

"This is going to be a government that's going to continue to cut," interim Liberal Leader Bob Rae said Wednesday, predicting cuts in environmental research, services and pensions. "This is a government that can't even mention the word 'inequality,' that can't mention the concept of the growing gap between those who have and those who don't."

Thomas Mulcair, the new NDP leader, says he has little confidence the government will show much restraint in its cuts.

"The whole pyramid of public administration exists to do one thing: to deliver a service to the public. That's the last thing you should touch. You should, if you have to do some paring down, go after the administration itself. So instead of going at it with a scalpel they'll go at it with a rusty machete, and I'm concerned we are going to lose a lot of public services."

Public service unions in Ottawa have pointed to recent cuts by the government as examples of how the budget could hurt Canadians.

Last spring the government announced it would close a marine rescue subcentre in St. John's and move services over a thousand kilometres away. Merv Wiseman, a search and rescue co-ordinator in St. John's, says the government didn't consult anyone before the move.

"This is the centre that has the highest rate of distress calls of anywhere in Canada.… It is a reckless decision that puts a price on the lives of people who have to work in the most volatile and hostile environment in the world," he said.

Recent job cuts at Service Canada also caused controversy when employment insurance cheques were delayed for months. Earlier this year the government backtracked and said it would rehire some of the staff.

Some experts say the government has learned from those mistakes and is unlikely to repeat them on a larger scale with the federal budget.

"They're going to do their level best to make sure the cuts aren't felt by Canadians across the country," says Ian Lee, a professor at Carleton University's Sprott School of Business.

He believes most of the cuts will be to administrative and policy staff who work largely behind the scenes — for example in government real estate, procurement or defence support.

"I think the cuts are going to fall disproportionately on the back office where they are not going to be seen or felt by the Canadian public."

Meanwhile, many public servants in Ottawa are bracing for staffing cuts, which may not arrive through relatively painless attrition or early retirement packages.

Andrew Graham, a professor in the school of policy studies at Queen's University in Kingston and a former assistant deputy minister at Agriculture Canada, doesn't think the government will be generous.

"Sweetening the deal is going to accelerate the departure of people you don't want to go," he said.

Graham said he's heard the federal job cuts will hit Ottawa hardest, since the centre has seen the biggest growth over the past few years.

With files from the CBC's Louise Elliott and Julie Ireton

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Tuesday, April 3, 2012

'Digital wallet' will transform smartphone, and how we spend

Digital wallets are on their way to replacing their leather counterparts for many Canadians within the next two years, according to retail and communications specialists.

One thing it could change, for example, is your morning coffee ritual.

David Robinson, vice-president of emerging communications at Rogers, envisions a Tim Hortons application that would know you always order a large double-double, track your location via GPS and charge your bank account before you’ve even set eyes on the restaurant.

"Then," says Robinson, "you just pick it up in an express window."

The smartphone-enabled wallet also allows consumers to purchase items simply by tapping their phone on a pad at the cash, much like a tap-and-pay credit card.

Those cards only deal in transactions, but the possibilities for digital wallets could be endless.

Big players such as Rogers, Visa and PayPal are backing the new technology, signaling its rise in the near future.

The list of digital wallet capabilities is long.

'Every carrier and bank on the planet wants to be able to do this.'

—David Robinson, vice-president of emerging communications at Rogers

New to the city and need a transit pass? You could simply purchase a pass on your phone and go. Access cards for your office building could be there, too.

Receipts would be stored in the phone, and so alleviate many of the headaches of the return line.

The way consumers buy alcohol or cigarettes would also change, as patrons could simply tap their phone on a pad at the cash to indicate their age to a clerk.

It could even bring sweeping change to the way health-care identification works, as provincial health cards could reside on a phone in the same wallet.

Test results could be emailed or explained to patients over the phone, eliminating many types of follow-up visits.

Stolen, copied or forged plastic health cards would be a thing of the past.

The digital wallet is a virtual representation of the real thing – except it resides in a digital device.

A wireless signal known as near field communication (NFC) is at the heart of the innovation, where a chip in the device sends a signal from the phone to a payment terminal.

Robinson says Canada is uniquely ready for digital wallets because the infrastructure is more developed here than in most countries.

As well, Canadians are in the top four in the world for smartphone usage and often have the latest and greatest devices.

Mobile payments and digital wallets are top of the development heap, says Visa Canada's Derek Colfer.

"There's lots of conversations occurring between mobile network operators, device manufacturers and banks," Colfer says. "There will be a plethora of digital wallets for consumers to choose from within the next 24 months."

Visa believes that once the retail backbone is established the rest will follow.

Rogers' Robinson says that in a few years digital wallets will be as common as a camera is on a cellphone today. "Every carrier and bank on the planet wants to be able to do this," he says.

Still, according to a report in December 2011 by the Task Force for the Payment Systems Review, Canada is still not yet where it needs to be for digital payments.

The review, commissioned by Finance Minister Jim Flaherty, says that Canada has not yet implemented a digital authentication process that is both safe and easy to use — something that industry players are pushing to rectify.

The review also states that Canadians rely too heavily on cheques, and that financial institutions could save $600 million a year in cost savings by 2020 under a digital payments system.

The seeds of digital wallets have been sown already — Google and PayPal have versions set up for payment. Visa’s digital wallet works on some LG, Samsung and BlackBerry phones for direct payment, including the BlackBerry Bold 9900 and 9790 models, as well as the Curve 9360 and 9380.

Robinson says RIM is the most aggressive but many handset manufacturers are developing the technology.

Other phones that are already NFC-capable include the LG Optimus LTE, the HTC Ruby, and Samsung's Galaxy S II.

Apple is curiously absent from the list – but many expect the company to include the feature on its next phones.

"Apple is very aggressive in patents in the category," Robinson says. "They've filed all sorts of patents around NFC. So looking at that would indicate that they're going to do something."

Every developer says security is a huge issue for consumers.

Research conducted for PayPal Canada found that 43 per cent of people don't trust their smartphone to keep their personal information secure, and more than 80 per cent worry about financial privacy while making mobile transactions.

But the developers of digital wallets believe they will be even more secure than traditional ones.

"If there is a transaction that occurs on an e-commerce site that you didn't make, you will not pay for it," says Colfer.

And no need to panic and call a dozen card issuers if your digital wallet is lost.

"One of the services we'll provide as carriers is we'll inform all issuers simultaneously that the cards have been compromised, and then issuers will be able to lock those accounts," Robinson says.

Then, new phone in hand, a person could piece their wallet back together just tapping on a screen and making some phone calls from an NFC-capable device – a much quicker ordeal.

Smartphone providers won't have detailed credit card information. Instead, they'll have a record that an account exists on a particular device.

"When we put a card in secure memory, no one has access to that information other than the issuers," Robinson says.


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U.S. calls for comment on Atlantic offshore exploration

The U.S. Interior Department said Wednesday it is seeking comment from the public on a plan to allow energy companies to begin seismic testing to find oil and natural reserves in the Atlantic Ocean.

Officials have released a programmatic environmental impact statement on seismic testing for public review. The testing would be used to determine how much oil and natural gas is available and where the best places to drill would be, among other things. The studies also help identify archaeological and geologic hazards to avoid.

Companies would use the information to determine where to apply for energy leases, although no leases are currently available in the region that could be opened up for exploration until 2017.

Supporters of drilling argued that there needs to be a plan in place soon to sell drilling leases to make the seismic testing valuable. Environmental groups said seismic testing could harm wildlife, even before any drilling begins.

"Without an Atlantic coast lease sale in their five-year plan, the administration's wishful thinking on seismic research has no ultimate purpose," the American Petroleum Institute Upstream Director Erik Milito said in a statement.

The announcement comes as Americans grumble about escalating gas prices and the Obama administration seeks to fend off criticism from Republicans that not enough is being done to tap domestic energy resources.

"As the president has said, there is no silver bullet to high gas prices. But we must continue to reduce our reliance on foreign oil and reduce our vulnerability to the ups and downs of the international market," Interior Secretary Ken Salazar said at a news conference in Virginia, a key election state.

Salazar said he would make his ruling on whether to allow seismic testing by the end of the year, following a series of public meetings from Delaware to Florida, where the testing would occur. Salazar said six companies have already filed applications expressing interest in conducting seismic testing.

The possibility of oil exploration in the Atlantic drew immediate criticism from environmental groups, who are concerned about its effects on marine life, including endangered whales.

"Today's announcement is great for petroleum companies, but horrible news for our coastlines and a potentially deadly blow to ocean fisheries and wildlife," Natural Resources Defence Council President Frances Beinecke said in a statement.


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Monday, April 2, 2012

India endorses BRICS bank

India's prime minister said Thursday that international institutions are failing to lift up the developing world and endorsed the creation of a new development bank to be run by five fast-rising nations.

Prime Minister Manmohan Singh spoke at a summit of the so called BRICS group — comprised of Brazil, Russia, India, China and South Africa — aimed at harnessing the nations' increasing global clout and forging stronger ties between their fast-growing economies.

The five countries represent 45 per cent of the world's population, a quarter of its land mass and a quarter of its economy at $13.5 trillion US.

Though the group has accomplished little of note at its three previous meetings, Brazilian President Dilma Rousseff insisted in an opinion piece in the Times of India that it had changed "the axis of international politics."

At the summit, the five nations are expected to agree to do more business with each other in their local currencies, to help insulate from U.S. dollar fluctuations while lifting trade within the bloc from last year's $230 billion to $500 billion by 2015.

They also hoped to move closer to creating a new development bank, much like the World Bank and Asian Development Bank, saying it would streamline efforts to raise capital in poor nations and facilitate more business among themselves.

Institutions of global political and economic governance created more than six decades ago have not kept pace with the changing world," Singh told the summit.

In response, the five nations are working to set up a bank funded and managed by them that would improve poor nations' access to development funds and boost emerging economies, Singh said.

"Developing countries need access to capital," he said.

The summit came as the Indian capital remained under a heavy security umbrella since a Tibetan exile lit himself on fire at an anti-China protest Monday. He died from his burns Wednesday.

Chinese President Hu Jintao's hotel was under virtual lock down, while Tibetan neighborhoods were sealed, with police allowing people out only for medical or court appointments.

Hundreds of police manned barricades along roads throughout the city, some carrying blankets soaked in water to quickly smother the flames of any protesters who try to set themselves alight.

Delhi police spokesman Rajan Bhagat said authorities had detained many Tibetan protesters in recent days, but would release most of them without charge in a few hours.


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Market awaits RIM results

Analysts are keeping their expectations low for Research In Motion's quarterly earnings this afternoon, noting RIM's international sales have been slowing and it will likely be months before consumers can get the new breed of BlackBerry.

RIM will release its fourth-quarter earnings after markets close at 4 p.m. ET with new CEO Thorsten Heins delivering the financial report, his first as the chief executive of the company based in Waterloo, Ont.

Heins took over from co-CEOs Jim Balsillie and Mike Lazaridis in late January amid shareholder unrest over the company's weak stock price and strategic direction.

Once a global leader in smartphone technology, RIM has been losing marketshare to Apple's iPhone and to smartphones with Google's Android operating system, especially Samsung phones.

The Canadian tech company isn't expected to release its BlackBerry 10 — the next-generation with a new operating system based on what's in RIM's PlayBook tablet computer — until later this year.

UBS analyst Phillip Huang says he expects another tough quarter for RIM, estimating the will have shipped 11.5 million smartphones and 375,000 PlayBook tablets in its fiscal fourth quarter.


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Sunday, April 1, 2012

Maple syrup producers feeling pinch

Warm weather had maple sap flowing early this year, resulting in less syrup for many producers in Ontario, Quebec, Nova Scotia and New Brunswick.

The Ontario Maple Syrup Producers Association says producers in the province will have a multimillion-dollar loss due to output that's down at least 50 per cent in parts of the province.

But association president Ray Bonenberg says he doesn't expect the price of maple syrup to increase for consumers this year because the price went up slightly last year and it's set every couple of years.

In Quebec, maple syrup production has wrapped early up except for in the eastern part of the province and production is down in southern areas.

Quebec's maple syrup association has a three-year stockpile of syrup and its members can buy insurance to get them through a bad season.

Nova Scotia's maple producers association says production is expected to be down a bit due to the warm weather, and New Brunswick producers could also faces losses depending on the weather in the coming days.


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Ontario budget draws mixed reviews

Reaction to Ontario's latest budget has been mixed — some call the cuts too severe, while others say it does not cut deep enough.

Following are some comments, from business, political and health interests, about the budget released Tuesday by Finance Minister Dwight Duncan:

Tim Hudak, leader, Ontario Progressive Conservatives:

“This is the time for tough and responsible fiscal management. Yet today’s budget is a weak and disappointing response to Ontario’s jobs and spending crisis. In fact, it actually puts up roadblocks to the very economic growth its assumptions are pinned on... At just the time we need to be making Ontario more competitive and restoring business confidence to create jobs, [Premier] Dalton McGuinty is taking $1.5 billion out of the economy over the next three years to pay for his overspending."

Andrea Horwath, leader, Ontario New Democrats:

"For families worried about their jobs, their health and the growing cost of living this budget falls short. We’re going to be listening to the everyday people who will be affected by the budget and we’ll be putting their interests first in the days ahead. We’re committed to making this minority government work as long as it provides results for people....The government seems to be finally admitting that no-strings-attached corporate tax giveaways aren’t creating jobs. Unfortunately, the province has already blown billions on these handouts and plans to do more as soon as we have the money.”

Michael Gregory, senior economist, and Robert Kavcic, economist, BMO Capital Markets:

"Finance Minister Duncan said 'for the third year in a row, we have beaten deficit forecasts,' but for the third year in a row, the extended deficit-reduction path has not changed. While the static path to a balanced budget by 2017/2018 is now more credible owing to realistic revenue growth assumptions and a detailed spending restraint plan, serious challenges remain. Among these are push-back from public-sector unions, the political reality of managing a minority government and the always-present demographic pressures on health-care spending. Last year, we said the province was on 'a slow boat to balance.' Today, it’s clear they’re still on the same slow boat, but they now have charts and a compass."

Robert Hogue, senior economist, RBC Economics:

"This was supposed to be the Big One. Ontario’s budget 2012 was built up as one of the toughest budget exercises in the province’s history that would provide the answers to many questions left hanging in the previous two budgets. And, budget 2012 went some way toward addressing the most important question: ‘How will the Ontario government balance its books by 2017/2018?’ But its focus on the next three years stopped it short of offering a complete answer."

Matthew Stewart and Ksenia Bushmeneva, Conference Board of Canada:

"The 2012 Ontario budget sets Ontario’s public sector on a long-term path to frugality. Over the next six years, a program of fiscal austerity will see growth in total program spending average well below one per cent per year. The combination of expenditure and revenue measures places the government on a path to balance its books by 2017–18. But containing costs over such a long-term horizon will be difficult."

Plamen Petkov, Ontario director, Canadian Federation of Independent Business:

"After years of consistent lobbying, the CFIB is pleased that the government has acknowledged the main challenge facing Ontario’s budget is salaries, pensions and the size of the broader public service. The government should be credited with presenting a tough plan to cap program spending increases at one per cent and limit the spiralling costs of public-sector pensions. However, much of this plan depends on public-sector unions putting water in their wine, and accepting restraint in wages, positions and pensions. We’ve seen no evidence that unions will agree to any change regardless of how dire the state of Ontario’s finances.”

Dr. Stewart Kennedy, president, Ontario Medical Association:

"The Ontario Medical Association has reviewed the provincial budget documents and has some serious concerns about the government’s ability to appropriately care for our aging and growing population. The government commits in the budget to improving access to doctors and same-day services, but the budget proposes to put a cap on the budget that pays for those things for the next fiscal year."

Warren (Smokey) Thomas, president, Ontario Public Service Employees Union:

"The 2012 Budget has failed Ontario on several counts. If this Budget passes, it will hurt people, slow our economy, and sharply increase income inequality in this province."

"It is worth noting that Finance Minister Dwight Duncan has overestimated the provincial deficit every year since the recession began… Clearly, the Minister has worked hard to keep deficit estimates frightening so that the final real result is cheerful. What this means, in simple terms, is that the Minister’s numbers can’t be trusted."


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Saturday, March 31, 2012

8 things to watch for in today's federal budget

While Prime Minister Stephen Harper has made a habit of avoiding pre-budget leaks, he and his cabinet have made a point of telegraphing what to expect. Their mantra — and what they believe is a key part of their success — is that they tell voters what they'll do and then they do it.

With an estimated deficit of $33.3 billion and a promise from the government to balance the budget by 2014, here are eight elements to watch for in today's budget.

Harper lit a firestorm in a speech he gave in front of an audience of international business leaders in Davos, Switzerland, in January when he said the Canadian government would be looking at making Canada's retirement income system sustainable. His staff were prepared with Finance Department numbers showing a bulge in costs as baby boomers hit age 65. Finance Minister Jim Flaherty is expected to use the budget to outline changes to OAS, possibly by raising the eligibility to 67 instead of 65, but the actual change won't come until several years after this budget.

Harper also said in Davos that Canada has to change the way it invests in research and development. The government says Canada is one of the world's most generous with R&D funding, spending almost $12 billion a year, but the private sector isn't delivering results to match that investment. Minister of State for Science and Technology Gary Goodyear says the National Research Council, which now gets $700 million a year, could see major changes. A report last fall by business leader Tom Jenkins also said the complicated SRED tax credit system needs to be streamlined to make it easier to apply for funding.

Watch to see how much the defence budget is cut with the Conservatives having sold themselves as the party that cares about the military. The government has increased the department's annual budget by $6 billion a year from the time it took office in 2006, so it is a department seen as having room to cut. It's likely immediate cuts will be on the staffing side and to the number of full-time reservists. Plus, with most soldiers back from Afghanistan and the mission in Libya over, there will be fewer operational costs on the books.

The government has been shifting where it spends its money on diplomacy over the past six years, closing some embassies and opening new trade offices, so watch to see whether any missions will be closed. And the Canadian International Development Agency, which operates independently from Foreign Affairs but doesn't have separate enacting legislation, has been a target for a government trying to make aid more effective. There's a chance it will get wrapped into the Department of Foreign Affairs, but more likely spending will be cut from other budgets, like staff travel to projects they're overseeing in developing countries.

Treasury Board president Tony Clement, who's like the government's chief operating officer, says the Conservatives won't break any collective agreements with public service unions, and he's hoping a lot of the jobs the government cuts will be through attrition or moving around civil servants who want to stay in the bureaucracy. But Harper has said public service pensions aren't sustainable at their current levels, and public service workers will be expected to shoulder a greater burden of their retirement costs.

The Assembly of First Nations has said it needs $500 million in the budget to bring on-reserve schools up to the same standards as other Canadian schools. And after weeks-long controversy over the state of housing in Attawapiskat, followed by a gathering in Ottawa to "re-set" the relationship between the Crown and First Nations, expectations will be high.

Immigration Minister Jason Kenney has been tailoring his announcements to the business community lately, extolling the changes he's made to the immigration system that make it easier to hire skilled foreign workers to fill labour gaps. This has little to do with the federal budget, but Kenney will be on-hand to sell it as good for the Canadian economy.

The Conservatives have promised not to cut transfers to the provinces, including health funding. While the current funding agreement doesn’t expire until 2014, Flaherty shocked the provincial and territorial finance ministers when he gave them the take-it-or-leave-it details of the new agreement in December 2011: health funding will continue to increase by six per cent a year until 2017. Starting in 2017, funding will be tied to nominal GDP, although the federal government is guaranteeing a minimum increase of three per cent. Nominal GDP is the monetary value of all goods and services produced within the country annually, including inflation.


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Bombardier wins $600M US New York contract

New York City's mass transit system is set to order for more than 300 subway cars made by Montreal-based Bombardier Transportation.

Gov. Andrew Cuomo will announce the $600 million contract later today. The cars will be built in Plattsburgh, keeping 500 jobs alive and provide stable, higher-paying manufacturing jobs for several years.

Cuomo says the deal will keep 300 workers busy and support 200 more jobs from suppliers.

The Metropolitan Transportation Authority says the new cars will replace the subway's oldest cars, improving service in the massive system. The contract will be paid in part with $305 million in federal money.

The company won the contract by offering the lowest bid. Bombardier has built subway cars for the city since 1981.


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Friday, March 30, 2012

Aveos workers await final pay

Employees who lost their jobs following the collapse of Aveos Fleet Performance Inc. say they have not been paid for their final two weeks of work.

The workers had expected their final paycheques to be deposited in the bank on Wednesday, but the funds did not materialize.

"This is just one more straw in the basket," said Liz Miazga, a logistics coordinator who worked at the Winnipeg aircraft maintenance plant for 14 years.

Liz Miazga says she has not been paid for work at Aveos.Liz Miazga says she has not been paid for work at Aveos. (Neil Carleton/CBC)

"We are a very frustrated group. We didn't want to transfer to Aveos. We are all long-term Air Canada employees who were forced to transition."

Aveos abruptly shut down on March 18 and filed for bankruptcy soon after, leaving about 2,600 out of work across the country, including employees at its Winnipeg, Montreal and Vancouver facilities.

Aveos, a former maintenance division of Air Canada, became a private company in 2007.

The federal government says it will seek a legal opinion on whether Air Canada broke any obligations that may have led to the closing of the maintenance firm, but said there won't be any bailout for Aveos.

Miazga says many employees were counting on their final cheques to catch up on things like mortgages and car payments.

"This paycheque would be for work that we already performed … for the two weeks previous to being locked out," she said.

"So this would have been our final payment. This would not have included any severance or vacation pay or anything else."

Hundreds of former Winnipeg employees met with their union representatives on Wednesday to discuss their employment insurance claims, as well as provide support to each other.

In a statement, Aveos says it intends to pay base wages earned before March 19, but it needs a bankruptcy court order to do that. Company officials say they expect to be in court next week.


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Canadians worried about mortgage rate hikes

As concerns over the state of the Canadian real estate market abound, a new survey says nearly half of Canadians are unsure about their ability to afford their homes if rates rise by as little as two percentage points.

The survey commissioned by the Bank of Montreal study finds 43 per cent believe an interest hike would either hamper their ability to pay or leave them on unsure footing.

Regionally, residents of Alberta were the least concerned, with 73 per cent saying that rising rates would not affect their ability to afford their homes, while residents of British Columbia were the most concerned. Just 48 per cent B.C. residents are comfortable in their ability to handle higher rates.

The survey results come as banks and economists warn about the rising debt levels of Canadian households.

It also comes as some of Canada's biggest banks have started raising variable mortgage rates, even though the Bank of Canada's overnight interest rate remains unchanged.

Earlier this week, both RBC and TD raised the posted rates on five-year mortgages.

That could signal the end of the era of cheap borrowing that has encouraged many Canadians to take on houses they may not have been able to otherwise afford.

BMO anticipates that the Bank of Canada will begin increasing interest rates from the current one per cent next year.

Many in the mortgage industry have recently advised homeowners to take on the previously less-popular variable mortgage rates as interest rates had remained low since the end of the recession, when the Bank of Canada pushed its overnight rate down to an emergency low 0.25 per cent.

But looking ahead, some industry watchers say now is the time to consider switching to lock in longer term rates with shortened amortization periods.

"Our interest rate outlook now projects that fixed mortgage rates will trump variable. While the decision ultimately depends on the individual, the low rate combined with a shorter 25-year amortization will significantly strengthen household financial stability," said Doug Porter, deputy chief economist at BMO Capital Markets.

In a report issued last week, Porter and colleague Benjamin Reitzes argued that with the U.S. recovery gathering steam, central bankers on both sides of the border are becoming more comfortable with the economy and less so with historically depressed interest rates.

Already, financial markets have priced in a near 50 per cent chance that Bank of Canada governor Mark Carney will start hiking his one per cent policy setting before the year's end, they noted.

Both Finance Minister Jim Flaherty and Carney have recently flagged the danger to the economy of Canadians becoming increasingly indebted, mostly through taking advantage of low rates to buy homes or take out home equity loans. Household debt to disposable annual income is above 150 per cent and likely to rise further toward the 160 per cent level that preceded the housing collapse in the U.S., say analysts.

With files from The Canadian Press

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Toyota adding 400 jobs at Ontario plant

One of the world's largest automakers is increasing its Canadian presence while creating hundreds of jobs.

Toyota Motor Manufacturing Canada Inc. says it is increasing RAV4 production at its Woodstock, Ont. assembly plant.

The company now expects to increase its annual capacity to 200,000 vehicles in the facility by early 2013, an increase from a target of 150,000 in 2012.

The company says the $80 million investment will result in about 400 new jobs.

Currently, the plant has about 2,000 workers.

Most of the vehicles made in the plant are shipped to the United States. Sales of the model fell about 7 per cent in the U.S. last year to over 22,000 units, although Toyota said much of this was due to a parts shortage caused by the Japanese earthquake and tsunami.

But sales have begun to spring back recently, or at least in this country. Toyota Canada said sales rose 31 per cent year over year in February with 12,384 more Toyota, Lexus and Scion vehicles sold.

"We are optimistic that the market is coming back and we're grateful for the strong sales of the RAV4 in the North American market, which has created this increase in production and jobs," said TMMC chairman Ray Tanguay said.

Somewhat counterintuitive, the rising cost of gasoline in North America has actually created a flood of new vehicle purchases. In fact, sales of both small and large vehicles are up over the past year because increased fuel-efficiency has made refueling cars of all sizes cheaper.

The average age of a vehicle in the United States is about 11 years old, and cars manufactured today are estimated to be about 30 per cent more fuel efficient. So even as gas prices rise, it is expected that consumers looking to save on fuel will replace their old-gas guzzlers of whatever size for a new model.

Adam Jonas, an analyst with Morgan Stanley, expects U.S. vehicles sales to hit 14.8 million this year, up 15 per cent from 2011.

Toyota, as one of the best-selling automakers in the U.S., expects to take full advantage of the rising sales, and today's production announcement is part of that strategy.

Ontario has seen traditional Detroit Three carmakers — GM, Ford and Chrysler — cut tens of thousands of jobs in the last decade as their parent companies restructured in the United States. But Toyota and Honda have expanded their operations in Ontario, Canada's manufacturing heartland.

The company has already announced plans the first Toyota electric vehicle to be built in North America, the RAV4 EV, would be made in Woodstock beginning this year.

Canada's Minister of Industry Christian Paradis lauded the company, saying the move will help to strengthen Canada's automotive industry.

"Our government welcomes the news of increased production at Toyota's Woodstock plant, and congratulates the company on the success of the RAV 4," he said in a statement.

"Together, Toyota's Canadian plants represent one of the company's largest, most successful manufacturing operations in the world, leading to jobs and growth in those communities and for Canadians."

Toyota began its Canadian operations in 1986 in the southwestern Ontario city of Cambridge.

It currently employs about 6,500 Canadians at two plants in Cambridge and one in Woodstock, where the Toyota Corolla, Toyota Matrix, Toyota RAV4, and the Lexus RX 350 vehicles are manufactured.

With files from The Canadian Press

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Thursday, March 29, 2012

Brian Stewart: Europe's job exodus, Canada's immigration shift

One of this country's most experienced journalists and foreign correspondents, Brian Stewart is currently a Distinguished Senior Fellow at the Munk School for Global Affairs at the University of Toronto. He also sits on the advisory board of Human Rights Watch Canada. In almost four decades of reporting, he has covered many of the world's conflicts and reported from 10 war zones, from El Salvador to Beirut and Afghanistan.

There is one part of Europe's economic suffering at least that suits Ottawa and the provinces just fine.

The high unemployment among the continent's skilled trade workers has opened a motherlode of tens of thousands of prized immigrants of exactly the type Ottawa now wants to encourage — young, well-educated and fluent in either English or French.

In short, the type who will "fit in" fast without needing much help from costly immigration services, though it is never spelled out quite that bluntly.

This is the type of new arrival that employers won't have to train that much, if at all, and who should help counter the drag effect of our aging population.

Europe's exodus of its job-seeking young is a fascinating sub-story of the economic crisis — and puts the recent changes in Ottawa's immigration policies into a new focus.

Since assuming office, the Harper government has given up on the old one-size-fits-all standard for immigration, and is now ceding much of the search for new immigrants to the provinces and territories — and, more recently, to employers.

As practical as this might seem, these interests are far less concerned with shaping a national approach to new Canadians as they are with what benefits their own demographic interests and businesses in the short term.

The result is that the provinces have responded to soaring European unemployment by actively recruiting there, a message that job-worried Europeans are suddenly listening to in ways they haven't for decades.

"Every time something bad happens in the world people think of Canada as an optional destination for them," Montreal-based immigration attorney David Cohen said recently.

A job seeker scans the bulletin board at a jobs fair in London, U.K.A job seeker scans the bulletin board at a jobs fair in London, U.K.

But what is not being discussed here very much is the social impact of a new surge of Europeans to our shores, which will likely have a profound effect on the nature of Canada, as these big, sudden shifts in immigration tend to do.

We became a famously multicultural nation starting in the 1970s when we tightened the tap on traditional European immigration to allow for the first inflows from Asia, South Asia, the Caribbean and Africa.

It was one of the most important — and successful — policy shifts in our modern history, opening us up to the world in a real, human way.

Now we are in the midst of another change and it is not clear how long this swing back to European immigrants will continue.

It could fizzle out when economies there recover. But in the meantime this is no minor event, as is evident in the remarkable and very public surge of young Irish workers to our biggest cities.

More than 40,000 Irish workers poured into Canada in 2010-11 after economic calamity took down the so-called Celtic Tiger. In Toronto alone, a special Irish-Canadian immigration centre is being launched to help the more than 10,000 who arrived on working visas. If the past is any judge, this kind of out-migration from Ireland may be just a modest beginning.

This month thousands of carpenters, electricians, machine operators and the like lined up for hours to attend the Working Abroad Expo in the city of Cork. There they listened to pitches from Canadian and Australian companies who are in strong competition to recruit trades people for mining, construction and health-care.

But even the 300,000 unemployed in Ireland today is but the grim tip of the iceberg when it comes to Europe's economy.

The latest estimates are of 24 million unemployed men and women in the European Union, with jobless numbers running at 23 per cent in Spain (a devastating 49 per cent among young people) and roughly 20 per cent in Greece.

Look at almost any economy except booming Germany and much of Scandinavia and you will find younger workers looking for the exits.

Indeed, the situation is so stark that the EU has even launched a "Youth on the Move" program to help its own young workers pull up stakes and look for work in other countries! Interest from countries like Canada, therefore, comes as a godsend to their beleagured economies.

The federal government recently announced plans to change Canada's clogged immigration system, something that is long overdue, and the focus on Europe surely makes sense at this time.

Still, many of the 600,000 or so potential immigrants now waiting in line for their assessment will resent seeing so many Europeans shoved to the front of the queue as new restrictions and qualifications are implemented.

For a glimpse of the future, we just have to look at Australia, which is a few years ahead of Canada in jumping on the European outflow. (Like Canada, Australia strongly emphasizes English language skills and EU-level standards in trade skills and diplomas.)

"It's quite clear from the Australian evidence that it has the effect of shifting immigration away from non-English speaking countries, China particularly," Mikal Skuterud, an economist at the University of Waterloo, commented in the Globe and Mail recently.

For a country like Canada, which is trying to develop ever-greater trade ties with Asia, this shift could present a delicate balancing act.

The Harper Government is far too politically shrewd to offend specific ethnic groups by reducing their numbers sharply. Canada's immigration will remain multicultural and open to many, at least in theory.

But remember, Ottawa has off-loaded much of the selection process for new immigrants to the provinces, so they will be the ones to have to make the more politically awkward choices over who comes in and who does not.

This new process almost guarantees we'll be seeing a great many more Europeans arriving in the coming years as the complicated new entrance requirement tend to favour them.

Many newcomers will require a guaranteed job in a province before qualifying, which is the kind of thing that these European jobs fairs look to provide.

Of course, how many of these European workers will put down real roots remains to be seen. But they will undoubtedly make a mark.

Interestingly, polls of the Irish who've come here in recent years show most are delighted with their move, and feel they're in much better jobs now and more appreciated.

Fully a third say they would have left even without the economic crisis.

If these views are representative of other younger Europeans who have come here they suggests there may be far more of their countrymen willing to cross the Atlantic with more enthusiasm than Canada even imagined.

It will be interesting to see how our immigrant nation responds to this new face change.


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Rebranding part of push to streamline environmental reviews

The federal budget catch-phrase of the day will be "responsible resource development."

That's how sources say the government will be branding its moves to streamline environmental assessment, remove bureaucratic barriers to resource extraction, and change the way the Fisheries Act oversees Canada's waterways.

But since the Harper administration places so much emphasis on nomenclature, environmentalists say it's a loaded term that seeks to replace "sustainable development" as the guiding principle for environmental policy.

The phrase is already all over the website of Natural Resources Minister Joe Oliver.

"Our government is focused on responsible development of Canada's natural resources to create jobs and economic growth as well as future prosperity," says one recent news release.

"Our government has taken great strides toward making our complex regulatory system more efficient, and we remain focused on our goal: one project, one review, in a clearly defined time period."

The budget is expected to include indications that the government will do just that. It will signal the Conservatives' intentions to eliminate overlap with provincial reviews, impose time limits on environmental hearings, and narrow the government's focus to large projects only.

The budget will also signal changes in the way fisheries officials deal with industry. Mining, oil sands and rural municipal officials have long complained that fisheries regulations are too extreme. Leaked drafts of proposed changes to the Fisheries Act suggest the budget will remove Ottawa's oversight over habitat in order to focus just on fish in large quantities.

And to blunt critics who say the Conservatives are dismantling environmental regulations to give free rein to the oil patch, the budget may also contain funding aimed at improving the safety record of pipelines and preventing spills.

The package, along with the "responsible" branding, amount to a throw-back to the days, decades ago, when government did little to stand in the way of business, says environment lawyer Stephen Hazell.

He said the government is required by law to implement a "sustainable development" strategy.

"'Responsible' development has no accepted legal definition that I know of," Hazell said.

"I suspect that the government is using it because Harper and Oliver fully understand that oil sands development is inherently unsustainable. Full sustainability in the oil sands would mean net zero carbon emissions, for example."

But a spokesman for Environment Minister Peter Kent says the "responsible" wording is simply a branding exercise, and nothing nefarious.

"It's just rebranding," said Rob Taylor. "We're in no way diminishing our adherence to environmental stewardship and sustainable development."

He said there has been no edict or suggestion that ministers should stop using the words "sustainable development." But he said the Conservatives do want to differentiate their approach from governments past.

"It's smarter, easier and better government," Taylor said.

"It's the principle Harper has had since the days of opposition. It doesn't have to be complicated."

The uproar over the federal government's environmental oversight has surged since this winter's hearings on the Northern Gateway pipeline to the West Coast began.

The hearings are expected to drag on and on, as officials hear from more than 4,000 interveners. Oliver has called many of the participants "radicals" who are funded by foreign interests trying to undermine Canada's economic interests.

Environmentalists, however, say the government's rhetoric is trying to cover up its attempts to allow industrial development regardless of the costs to the environment.


View the original article here

Wednesday, January 18, 2012

Chile luring Canadian firms with $40K of free cash

Dianne Buckner has reported on entrepreneurs for two decades. She hosts Dragons' Den on CBC Television and is part of the business news team at CBC News Network.

The temperature in Chile on the day I’m writing this (in grey, chilly Toronto) is a delightful 27 degrees, sunny, with scattered clouds. But the weather report that’s even more appealing is about the climate for entrepreneurs.

“We can fast-track the visa process,” says Jean Boudeguer, executive director of Start Up Chile, a program that’s attracting early stage business-people from all over the world.

“Participants can open a bank account within first week, and with all the information created by past participants, they can figure out where to live, where to buy, what to do — everything — very quickly. Within [the] first week you’re ready to go.”

Oh yes, and the government-sponsored program will hand over $40,000 US too, to help you set up your business, no strings attached. You just have to stay in the country for six months.

Start Up Chile is the brainchild of Nicolas Shea, the innovation and entrepreneurship advisor to the Chilean minister of economy. As the story goes, he was in California’s Silicon Valley in February of 2010, working with his own venture, eClass, when he got the call from the Minister.

Canadian entrepreneur Pete Field is taking advantage of the Start Up Chile Program. Canadian entrepreneur Pete Field is taking advantage of the Start Up Chile Program. (Pete Field)

Chile is isolated both geographically and in the way people think, according to some observers, and its culture of innovation has been described as “weak”.

The minister wanted Shea’s help to change that.

The Start Up program is the result. And Canadians have been signing up. For this most recent third round of participants, eight were approved. “I was looking to get out of Whistler into a more technology-centric environment,” says Pete Field, a 38 year old entrepreneur who grew up in Ontario.

Field’s venture is called Kitchon, and as the name suggests, will be focused on cooking. “I love to cook and I dislike following recipes although I know I’ll make a better meal when I follow a recipe. Recipes aren’t written for the way that we cook, and with the iPad there’s an opportunity to improve the kitchen experience for people.”

Don’t bother visiting the site yet though – a closed test site goes up next month, and Field hopes to launch Kitchon in late April.

But being in Chile is speeding up his progress, he says.

“A big part of it for me is that I come into the office every day and I’m surrounded by really smart people who are at the same stage of developing their business as I am,” he explain. “We’re constantly talking about what’s going to work. And we’re all really familiar with each other businesses.”

But doesn’t any incubator offer that advantage?

Yes the weather is less hospitable in Canada at this time of year, but there are incubators here, not to mention the U.S., that wouldn’t require a trip to a faraway, Spanish-speaking country.

Field is quick to point out that the language of the Start Up Chile program is English. And he’s not a fan of one aspect of incubators.

“My biggest concern was that most incubators will take a percentage of your company in order to be in the program,” says Field. “In Chile they were asking for nothing, plus they were giving. And I’d never been in a developing country before. It was a chance to do something completely different. Toronto didn’t have that appeal.”

All this talk of Silicon Valley and incubators could give you the impression Start Up Chile is all about tech. Not so.

“We have many different industries in the program,” says executive director Jean Boudeguer. “Some are working with renewable energy, through sun or wind. Also Chile is well known because of its mining industry so some of them are trying to work on something there. We have three or four working with Biotech. It all depends on the stage of your company, not the industry.”

'In Chile they were asking for nothing, plus they were giving'—Entrepreneur Pete Field

This was the point at which I found myself wondering what Chile gets out of this. Are participants contractually obligated to set up their companies there, and to hire Chileans? The answer wasn’t what I expected.

To hear Boudeguer tell it, what Chile wants back from its international visitors is two things: to share their entrepreneurial energy, and to build relationships.

“We see personal relationships, not just business relationships. They are going to last forever,” says Boudeguer, pointing out that with Latin America’s economic clout growing, it’s a market where many entrepreneurs may want to have connections in the future.

“We encourage participants to be very active in entrepreneur society, to participate in lectures at universities, mentor other entrepreneurs, create events to connect with the local community.”

Pete Field is into that in a big way. He’s even accepted a key role as an organizer of one of the ‘tribes’ – people in various industries such as technology, finance, or education grouped together for meetings.

Another Canadian participant, University of Waterloo graduate Andrew Cross, says he and his three partners are less enthusiastic about the networking aspect.

“We work out of our own apartment a lot more,” says Cross, a 23 year old originally from Burlington. “I still head over to the co-working space once a week to bounce ideas around, and to stay connected. But at the end of the day we’re here to make the company the greatest it can be, and that takes priority.”

Cross is also developing an on-line venture, Goose Chase Adventures, a mobile “adventure platform inspired by scavenger hunts,” to quote the website. He’s using his 40K to buy new computers and phones, and to make a promotional video for the website.

Nearby Waterloo has a great start-up culture — so again, why go to Chile?

“We were excited about the idea of getting beyond that and getting connected with entrepreneurs from all over the world,” explains Cross. “Plus, South America is going to be a pretty big market, we wanted to see that first hand before it gets saturated.”

The Start Up Chile website boasts that the program “has gained impressive international recognition, having been published in Forbes, The Economist, BusinessWeek, and TechCrunch (among many others) and has inspired spinoffs around the world such as Startup America, Britain, Greece, and Italy.”

Should Canada be emulating the program? That’s the subject of next week’s column.


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Gail Vaz-Oxlade's financial advice for women

Women make up 80 per cent of household spending decisions, but that doesn't mean they're in control of their own finances.

So says personal finance guru Gail Vaz-Oxlade. She's an award-winning broadcaster and author who has been teaching Canadians to take control of their financial lives for more than 30 years. Her latest book, It's Your Money, takes direct aim at her latest target: women.

"A lot of women still cede control to their spouses," she said in an interview on the Lang & O'Leary Exchange recently.

Women are told to share everything with their partners, but that's not always a good thing because that robs them of their power to control their financial lives, she says.

"Women have to recognize they have a responsibility to themselves and to their children to be able to stand on their own two feet," she said.

Women don't always play an active role in investment decisions because society still expects them to handle more domestic issues like child-rearing. "Women tend to head more single-parent households," Vaz-Oxlade says, "and taking care of aging parents? It's a girl's job," she added, sarcastically.

She says women are too afraid of getting involved in investment decisions for their households because they're too often afraid of making a mistake.

"Just because you've got a partner, doesn't mean you become the shadow of your partner," she said.

Watch the player above to see her complete interview, or click here to see it in its own.


View the original article here

Tuesday, January 17, 2012

Samsung to use smartphone success to expand tablet presence

If the length of press conference lineups at the Consumer Electronics Show are anything to go by, Samsung is one of the hottest gadget makers going right now.

On Monday, the South Korean company had to turn away hundreds of journalists who were hoping to catch a glimpse of its latest televisions, phones, tablets and appliances, simply because there wasn’t enough space to accommodate them all.

The company used the event to claim market leadership in a number of product categories, including smartphones. Samsung Canada president James Politeski later sat down with CBC News to elaborate on the company’s present and future in this country, as well as overall trends in the electronics business.

CBC News: Can you explain how Samsung calculates its leadership position in smartphones? Some numbers give that position to Apple.

James Politeski: The number we count is units, so 300 million phones [shipped] makes that the largest quantity of phones in the world, as measured by the various reported sources of information. We are the largest in units.

Q: And is that number reflective of Canada as well?

A: Yes, in 2011 we had a dramatic increase in our business [in Canada], more than two-and-a-half times the market share from the beginning of the year to the end of the year. In the last few weeks of 2011, from our industry sources, we were No. 1.

Q: One area in which Samsung hasn’t done well is tablets. According to some estimates, Samsung’s market share in Canada is in the low single digits. What’s happening for you there?

A: Last year was our start, our first foray into them. We obviously have an opportunity to grow that business. One of the concepts we’re focused on is walk-at-working so that when we talk about our tablet, we want the sales associates [in stores] to actually demonstrate how it works, get a Gmail account set up so you can connect to Android and download a couple of apps.

With the tablets playing off the success in phones, that momentum is also going to play through because the feel and the systems are very similar. As our smartphone business continues to dramatically expand, that’s going to raise the tablet business.

Q: There’s talk that wireless carriers don’t like Apple so they’ve pushed Android phones, hence their success. But with tablets, people aren’t really buying data plans for them, so carriers aren’t pushing them. Are tablets a harder market as a result?

A: Everything we do has its elements of challenge to it, but having said that, they’re very different products. Phones are just that – they’re communications devices. They have similar features, but tablets are mostly Wi-Fi, so it’s not so much that [carriers] aren’t interested in them, but they’re fitting a different profile in the marketplace.

I don’t think it’s any harder for us, but what’s attracting success for us is not only the operating system but the quality of the products. Whether it’s the quality of the screen, the battery life, the product speaks volumes for what you can expect for it. Android is catching on globally and locally, but really it’s the product that we’re most excited about.

Q: There’s a benefit to a person getting all of their gadgets – TVs, tablets, phones and so on – from one manufacturer, but it’s obviously unrealistic to expect many people to do that. How do you draw the line between making your products work better with each other and getting them to work with those of other manufacturers?

A: We’d obviously like people to have a full assortment of Samsung products, but practically speaking, that doesn’t always happen because manufacturers are at different stages with different devices. The idea is there are some connectivity features that are seamless when it’s just Samsung products, but then there are examples where they just work within [a larger] ecosystem. So our ChatOn messaging app is an example – it’s an app that’s designed specifically for our stuff, but it’s going to work on all the other platforms as well. It’s not just about focusing on what we have, it’s about offering the consumer choice, because that’s what they want. We’re not trying to pigeonhole what the consumer has to pick. We’re saying, “You pick the best of what you want.”

Q: Here at CES, we’re seeing a lot of companies, including Samsung, applying new interfaces such as gesture and voice recognition to things like TVs. What’s behind this move?

A: What you see here is a giant next step. This is not a small innovation, it’s a major change in how you interact with your TV and how it participates in your life. We’ve talked about the connectivity between devices, but now we’re talking about connectivity between the human being and the TV. You’re going to see tremendous app and software development around this. As we unveil it here, it is new to the world, so it’s like a starter’s pistol.


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Exports forecast to grow 6%

Canadian exports will continue to grow this year in the face of a global slowdown, and it's the U.S. consumer that's likely to come to the rescue, the federal government's export agency said Thursday.

Export Development Canada, a self-funded Crown corporation that assists Canadian companies doing business abroad, forecasts foreign sales will rise by six per cent this year.

The EDC also significantly lowered its estimate for global economic growth but chief economist Peter Hall maintains that the United States will more than make up for whatever is lost in the rest of the world, particularly in Europe.

Hall said he's usually "not big on decoupling arguments" — which maintain that one country or region can significantly outperform others in an integrated global economy — but added "it does seem like the U.S. is pulling away from the pack."

"The momentum is rising there. This is not a flash in the pan."

Hall said the U.S. appears to be getting over its late-fall pessimism — consumer spending is continuing to grow, particularly on volumes, factory activity is strong, the housing sector is coming off multi-year lows, and employment is picking up.

As well, a global slowdown should keep commodity prices in check and the Canadian dollar below parity for most of 2012, making Canadian exports more competitive abroad.

But the big factor is the U.S. consumer, says Hall.

"The U.S. consumer has been down so long, the cork is making its way back to the surface. This is the beginning of the recovery."

A survey of districts by the U.S. Federal Reserve, released in its so-called Beige Book on Wednesday, found unusual optimism from the central bank, calling the final weeks of 2011 strong, triggered mostly by consumers stepping up travel and spending.

Economists noted that it has been some time since the Fed used words like "vibrant" and "robust" to describe aspects of the American economy. But the Fed still called the housing sector as weak.

"Consistent with hard economic data releases, the latest Beige Book points to an economy vastly improved from the summer and fall months of 2011," said TD Bank economist Alistair Bentley.

The EDC expects Canadian exports of forestry products will increase by 12 per cent this year, the aerospace sector by 16 per cent and the automotive industry by 21 per cent — all three feed mainly into the U.S. market.

Oddly, the agency said exports in Canada's booming resource sector will be weaker, with energy flat, metals up only 3.2 per cent and agri-food by 2.7 per cent.

But that is mostly due to price effects, said Hall, since the EDC is counting on the loonie averaging about 98 cents US during the year. Volumes will still remain relatively strong.

Price effects and starting from a higher base also partly explains why export growth — which is measured on the value of exports, rather than amount — will slow this year to six per cent from a strong 11 per cent gain in 2011.

"The slightly lower dollar and rising U.S. production, alongside decent emerging market growth, will power sales of higher-value Canadian exports," said Hall, especially in volume of sales.

Hall sees the U.S. outstripping Canada in growth this year for the first time in several years, with an expansion of 2.9 per cent south of the border and 2.0 per cent north.


View the original article here

Monday, January 16, 2012

Wind firm Vestas to cut 2,335 jobs

Vestas Wind Systems says it will lay off 2,335 people, or 10 per cent of its global workforce.

The world’s biggest maker of wind turbines also warned Thursday that an additional 1,600 jobs in the U.S. could be at risk if Congress doesn’t extend tax breaks for renewable energy.

The firm blamed the need for job cuts on tough competition and a market slowdown following the global recession in 2008-2009.

Vestas, based in Aarhus, Denmark, said it would lay off 1,300 employees in its home country; 450 in Spain, Italy, Germany and Sweden, 400 in China and 182 in the United States.

In 2010, Vestas was awarded about $51 million in federal tax credits in the U.S., where it has invested more than $1 billion in four facilities in Colorado. The U.S. operations are headquartered in Portland, Oregon.

The additional cuts might come if the U.S. doesn’t extend its Production Tax Credit for renewable energy, which expires at the end of 2012.

Vestas expanded rapidly until the economic downturn slowed investments in wind power. In addition, it has lost market share to Chinese competitors.

Danish Prime Minister Helle Thorning-Schmidt called it "very, very sad news" for the country, which seeks to profile itself as a green energy leader.

"This is one of the businesses that we thought would be the new way of doing green technology," she said. "Despite the setback that we have seen right now, this is and will be the right approach.”

Last year, Vestas laid off 3,000 workers after posting a 24 per cent drop in profits in the third quarter.

After the cuts, Vestas said it will have around 20,400 staff and 25 factories worldwide.

With files from The Associated Press

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Health funding formula helps Ottawa, burdens provinces

Parliamentary Budget Officer Kevin Page has issued a report on the impact of Ottawa's formula for health care transfers after 2014.Parliamentary Budget Officer Kevin Page has issued a report on the impact of Ottawa's formula for health care transfers after 2014. (Canadian Press)

Parliament's budget watchdog says the new health-care funding formula will slowly reduce Ottawa's support for medicare, but it will also put the federal government on a solid fiscal footing for the future.

The trouble is the provinces will have to shoulder a growing health-care burden over the long run and they can't afford to do that without cutting spending elsewhere or raising taxes.

Kevin Page, the parliamentary budget officer, crunched numbers from the federal government's recent announcement on how health care will be funded until 2024. He projected costs and revenues out to 2040-41.

In his report released today, Page found that Ottawa's promised cash transfers will keep pace with projected increases in provincial health spending until 2016-2017.

But after that, Ottawa's funding will be tied to expansion of the economy. Increases will likely average 3.9 per cent annually, compared to the previous six per cent, the report forecast.

That means Ottawa's share of provincial health-care funding will fall to an average of about 18.6 per cent for the coming two decades from about 20.4 per cent today. It will continue to slide significantly after 2035 if the policy persists.

As a result, Ottawa's debt burden will decline steadily, the report said. The federal government will have some room to cut taxes or increase spending and still maintain fiscal health.

The provinces, however, will find their debt rising and some jurisdictions will have to increase taxes, cut spending or both in order to stay on track.

The report comes as the premiers prepare for a crucial meeting on health-care financing in Victoria starting Sunday.

They will attempt to figure out how provinces should deal with health care after suddenly being handed a funding formula from the federal government last month.

Finance Minister Jim Flaherty announced increases in funding with no strings attached — signalling a federal step-back from health-care policy-making and a slow erosion of federal funding increases.

In another report released today, a coalition of health associations said federal and provincial leaders need to confront the deterioration in the health-care system, clarify their roles and then get to work fixing things.

The Health Action Lobby of 34 national health organizations polled leading health-system experts and compared Canada's regime to others around the world.

They found a consensus on what the problems in Canada's health care system are, as well as general agreement on how to fix them.

But they also found a lack of political leadership at both the federal and provincial levels.


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Sunday, January 15, 2012

RIM's PlayBook update 'nifty,' but 'too little too late'

While tech experts and analysts are impressed with Research in Motion's long-awaited update to its PlayBook tablet, many aren't optimistic it will be enough to prop up the BlackBerry-maker, which was hard hit by outages, product delays, as well as a plummeting stock price last year.

The update coming in February, 10 months after the PlayBook was first released, was unveiled at the glitzy Cosmopolitan Hotel in Las Vegas during the Consumer Electronics Show this week. A free PlayBook 2.0 upgrade will be pushed out to current PlayBook owners in February. The new features will include:

Built-in contacts, calendar and email applications to run on the device itself without having to connect to a BlackBerry phone.Expanded capabilities on the BlackBerry Bridge to allow your smartphone and tablet to work better together by transitioning tasks from your BlackBerry to your tablet, opening websites, documents and pictures on your tablet from your phone, as well as using your phone as a remote control for your PlayBook.The capability to sync profile information from your connected LinkedIn and Twitter accounts.A video store catalogue with thousands of movies and TV shows as well as thousands of other applications available from partners.Access to Google's Android apps, which can be ported over, as well as other new apps that the company is getting developers to build software for, which it has promised for the second half of 2012.

The built-in email and contact integration with LinkedIn are key updates, Donald Bell of CNET.com wrote in a blog post.

"Needless to say, the PlayBook's non-corporate customers found the lack of a basic email app (on the earlier version) to be puzzling…Still, it's a surprisingly subtle update that comes at a time when interest in the now nine-month old product is seemingly flat."

RIM needs to get more aggressive with its update if it wants the PlayBook to be a success, he adds.

Damon Poeter of PCmagazine.com says the update is superior to the version rolled out prematurely last year, calling it "a nifty bit of technology."

"As you tool around on an upgraded PlayBook, the interface isn't glitchy and jumpy like it has been up until now," he wrote in a recent blog post.

"RIM's Bridge technology is ideal for situations where one person wants to show a group something on the PlayBook without having to mess around with the device and then pass it around.

"Our only quibble with this particular feature is that, at just 7 inches [17 centimetres], the PlayBook is really pretty small. It'd be nice if there were some other tablet form factors available from RIM, so larger groups could see what's happening on a remote-controlled PlayBook screen without huddling close together or squinting their eyes."

A real bonus is that the access to Google's Android Market for apps, "immediately cranks up app availability on the tablet to many times the number that are available in the company's own App World store," Poeter says.

However that doesn't necessarily mean PlayBooks will "start selling like hotcakes," he adds.

"RIM may have finally gotten its tablet operating system mostly right, but there's still a danger that in consumers' eyes, it will be too little, too late."

Other tech experts say the updated PlayBook may be just the thing to turn RIM's fortunes around.

In a blog post, Melissa J. Perenson of PCWorld wrote that it, "looks like it's teeming with potential"…[and] "given the current promotional pricing on the PlayBook, the tablet may actually go from being a fancy brick to a viable tablet option."

"From my early look, the update was not only worth the wait, but also may be what RIM needs to make its 7-inch PlayBook tablet more competitive and desirable."

Among Perenson's favourite features is a visual on the monthly calendar — "the busier your day is, the larger the date appears relative to other dates on the calendar; this way, at a glance, you can view which days are busiest for you."

She points out that Docs to Go has improved functionality, including PowerPoint editing, enhanced formula support, and the capability to embed images, which are unique to the PlayBook.

"You can also send content such as Web pages, photos, emails, and documents from your phone to the BlackBerry via Bridge. [You can] wirelessly turn content on your PC into a PDF viewable on the PlayBook using the Print to Go app. The print driver communicates with the PlayBook using BlackBerry ID, then prints and sends the document as a PDF," she wrote.

Perenson also likes that the PlayBook's video store is powered by Rovi for buying and renting TV shows and movies so you can use your content on other devices that support Rovi Now, she says.

Despite the hype, Canaccord Genuity technology analyst Michael Walker is maintaining his "hold" rating and $15 price target on RIM shares.

"While we were impressed with the improvements BlackBerry 2.0 offers, we believe it still lags competing tablet offerings. With competing OEMs continuing to introduce high-end smartphone products on more established software ecosystems and low-cost Android smartphones pressuring RIM’s international margins, we believe sales and earnings will remain under pressure until BlackBerry 10 smartphones launch in late C2012," Walker was quoted on a Forbes.com blog post.

"While we believe RIM management is focused on improved product execution during 2012, we believe new BB 10 smartphones will launch into an even more competitive smartphone market, as we anticipate innovative new Android LTE smartphones from multiple OEMs, a significant increase in Windows smartphone offerings from Nokia and other OEMs, and a refreshed LTE iPhone 5 by the time BB 10 smartphones launch.”

Jennifer Fritzsche, an analyst at Wells Fargo & Co. in Chicago, says the update is "too little, too late,” for the BlackBerry tablet to be a serious challenger to Apple's iPad. “I would call this a working version of what should've come last year — things that should've been there out of the box," she told Bloomberg Businessweek.

Fritzsche believes the tablet's appeal will largely be retricted to its corporate BlackBerry customers and expects the company to ship fewer PlayBook devices this fiscal quarter —100,000 — compared to 150,000 last quarter.

Meanwhile, Apple's iPad has outsold the PlayBook 74 to 1, selling 11.1 million iPads in the most recently reported period, according to Businessweek.


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'Super weed' found in Alberta

Federal scientists have confirmed the first case of a so-called 'super weed' in Western Canada.

Agriculture and Agri-Food Canada scientists in August found kochia in three fields in southern Alberta. The weeds were resistant to glyphosate, the active chemical in the world's top-selling herbicide, Roundup, which is made by Monsanto.

Monsanto Canada announced the confirmation on its website Wednesday.

Glyphosate resistant weeds mean higher weed control costs and lower crop yields for farmers.

Kochia populations resistant to glyphosate have previously been confirmed in Kansas, Colorado and Nebraska.

There are also suspected cases being investigated in North Dakota, South Dakota and Montana.

Two other resistant weed species had previously been found in Canada, both in southwestern Ontario. Giant ragweed was confirmed in 2009 and Canada fleabane was confirmed in 2011.

This is the first time resistant weeds have been confirmed in Canada's most important grain and canola growing region.

What makes the Alberta case different is that the kochia does not appear to have developed in a field where producers regularly grew crops that had been genetically modified to tolerate Roundup.

Canada is the biggest exporter of spring wheat, canola, durum and malting barley in the world.


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Saturday, January 14, 2012

Cooling housing market forecast by Royal LePage

One of Canada's largest real estate companies expects home prices to increase by less than the inflation rate in 2012.

In its quarterly forecast, Royal LePage says it expects the average home price in Canada to increase by 2.8 per cent by the end of 2012.

That's less than Canada's current inflation rate, which came in at 2.9 per cent in November, the most recent month for which Statistics Canada data is available.

The company says home prices increased by between 3.6 and 6.1 per cent in the fourth quarter of 2011 compared with a year ago.

The latest data from the Canadian Real Estate Association shows the average price of a home sold in November across the country was $360,396, a 4.6 per cent increase over the same month a year earlier. Though a strong rise historically, it pales in comparison to some of the gains seen in recent years.

In the immediate aftermath of the recession in 2008-09, Canadian home prices rose by double digit percentages in most markets. But over the last five years, Royal LePage noted on Thursday, average home prices have grown by only 3.5 per cent compounded annually, well below the long-term average rate of appreciation.

Predictions of a housing market correction became more prevalent through 2011, but the market proved resilient as low interest rates and a comparatively stable economy spurred demand for all housing types. Royal LePage said it doesn't expect a national price correction until 2013 at the earliest

"In the recovery period following the 2008-09 recession, I found myself repeatedly speaking of 'irrational exuberance' in the Canadian housing market," Royal LePage president Phil Soper said. "Expectations were too high and the pace of expansion unsupportable."

"With this report, I find myself in exactly the opposite position. Widespread calls for a major real estate correction in 2012 simply can’t be justified," he said.

The report says Royal LePage expects to see cities with commodity-based economies, such as Calgary, Regina and Winnipeg, out-perform larger urban centres such as Toronto and Vancouver this year.

Calgary’s average house prices are forecast to climb 3.6 per cent in 2012. In 2011, the largest average price increase occurred in Regina, where average prices for standard two-storey homes rose 19.5 per cent year over year.


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Harper touts $25B shipbuilding deal

Prime Minister Stephen Harper says a $25-billion shipbuilding contract will help bring three decades of economic stability to the industry.

Harper touted the contract on Thursday while announcing an agreement-in-principle with Irving Shipbuilding to begin building the vessels under the $35-billion federal shipbuilding program. The Halifax Shipyard won the largest portion of the contract in October.

He's speaking in North Vancouver at the Seaspan Shipyards at 3:15 p.m. PT.

In Halifax, Harper said the bids were evaluated on merit alone.

"Lobbyists were told to stay away. Slick advertising bids were ignored by the judges," he told the crowd at the Halifax Shipyard.

Hundreds of workers in hardhats surrounded the podium for Harper's speech. Halifax Mayor Peter Kelly and Conservative MPs Gerald Keddy and Scott Armstrong were among the dignitaries.

Premier Darrell Dexter, a proponent of a major Nova Scotia public relations campaign to win the bid, was not invited.

Harper was asked whether the designs for the fleet — which include icebreakers, Arctic patrol vessels and destroyers — would be done by Canadian naval architects.

"Design work is all ultimately part of the package," he said.

"Obviously, we try to minimize design costs, but there will be ultimately Canadian design components involved in all of this."

The president of J.D. Irving Ltd., the parent company of the Halifax Shipyard, echoed the prime minister's concern about keeping costs down.

Jim Irving said many decisions — such as whether Irving Shipbuilding will design the ships or buy existing plans from another company — have not yet been made.

"Clearly we'd like to keep as much work in Canada as possible but we have to have good value and we have to be very efficient," Irving told reporters after Harper's announcement.

"I think the general basis for discussion is that, be as efficient as possible, off-the-shelf where possible, and then as much in Canada as possible."

The contract to build the next generation of combat ships is expected to create 11,500 direct jobs in the Maritimes at its peak.

The federal shipbuilding strategy, described as the largest military procurement in modern Canadian history, is worth $35 billion in total and has been touted as the solution to keeping a steady flow of work in the shipbuilding field over the next 20 to 30 years.

Irving said his firm has received 7,000 applications for jobs at the Halifax yard, and his company is planning to go to universities and community colleges to help train the workers it will need over the next few years.

He also said the company is eager to recruit skilled workers from Western Canada.

Vancouver's Seaspan Marine was awarded an $8-billion contract for seven non-combat vessels, and there's still $2 billion in contracts that have not been awarded.

Harper is scheduled to fly to the Seaspan yard later Thursday for another announcement.

With files from The Canadian Press

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Global food prices fall in December

World food prices in December continued to retreat from February’s record high, the UN Food and Agriculture Organization reported Thursday.

The Rome-based FAO said its Food Price Index averaged 211 points in December. That was a 2.4 per cent drop from November and 11.3 per cent less than last year’s peak.

The index tracks changes in the prices of 55 commodities.

The FAO said bumper crops in several commodities combined with slowing demand and a stronger U.S. dollar led to sharp drops in the international prices of cereals, sugar and oils.

Still, it said the annual average for 2011 was a record high.

In December, cereal prices fell 4.8 per cent, the oils and fats index was lower by three per cent, meats were down slightly, dairy products were unchanged and sugar fell four per cent.

The data was released less than two weeks after the new head of the FAO, Jose Graziano da Silva, took over his duties with a prediction that food prices would remain volatile in 2012 — and more people would go hungry.

High food prices contributed to the unrest of the Arab Spring early last year and raised fears of a repeat of the food price crises in 2007 and 2008.


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Friday, January 13, 2012

Many Canadians' retirement plans in dire need of reality check

Many Canadians could end up with a lot less money for retirement than they expect because their investment plans are based on projected rates of return that are now far out of step with reality.

The expected rate of return is a crucial piece of any retirement plan, because it sets the expectation for how much a portfolio will grow and what it will ultimately be worth when a person is ready to retire.

There was a time not so very long ago that many financial advisers were confidently projecting that a well-diversified portfolio made up of a mix of equities and fixed income investments could comfortably earn a long-term average of seven to eight per cent a year.

That projection was based, in part, on what stock and bond markets had managed to return over the long haul in decades past. The benchmark index of the TSX, for instance produced an average annual return of 9.5 per cent over the 40 years ending in July 2011. Fixed income investments had also generally fared well over longer periods, as bond prices rise when interest rates fall – as they did for much of the 30 years after 1980.

But as Canadians head into 2012, the world economy is wrestling with an outlook that the head of the International Monetary Fund has described as "quite gloomy." Interest rates are already at rock-bottom and can't fall much further. Long-term bond yields are at historic lows. Everybody seems to be waving "caution" flags.

Many advisers are now saying it's time for investors to do much the same thing when projecting long-term returns going forward. And that could have a major impact on how much net worth many Canadians will have to look forward to in their golden years.

"It would be unwise to assume an eight per cent average over the next 15 to 20 years," says Warren MacKenzie of Toronto-based Weigh House Investor Services. "I think we're in for some tough times."

Making projections is a fundamental part of retirement planning. While you can't know for certain how your stocks, bonds, mutual funds and other investments will do over the years or decades until you need to start dipping into them, you have to make some educated guesses to do any planning.

'It would be unwise to assume an eight per cent average [return] over the next 15 to 20 years. I think we're in for some tough times.'—Warren MacKenzie, Weigh House Investor Services

If you don't make certain assumptions about portfolio growth, you'll have no way of figuring out if you have a hope of reaching your financial goals.

Service Canada's comprehensive online retirement calculator, for instance, allows you to choose an estimated portfolio return of anywhere from two per cent to 20 per cent. The default return – the one the calculator will use unless you change it – is currently seven per cent.

Depending on what expected return you choose to plug into a calculator, the results it spits out can mean the difference between being told that, yes, you'll be able to retire when you hoped to … or no, you'll have to work an extra 10 years.

So when you plug in your best guess, what return should you pick? Eight per cent? Seven? Six?

Try five per cent – at most.

That's what some experts are now saying is the best to realistically expect over the long term for a balanced portfolio, based on the current economic turmoil and the dubious outlook for the coming years.

"In the plans that I'm doing now, I'm projecting 4.75 per cent to 5.00 per cent," says MacKenzie of Weigh House Investor Services.

The message for investors is now hope for the best, but plan for the less-than-best.

A similar bit of advice comes from Justin Bender, a Chartered Financial Analyst and portfolio manager at PWL Capital. He says he still sees "unrealistic portfolio return expectations" among clients of as much as 12 per cent for balanced portfolios.

Bender used research from Credit Suisse about projected real equity and fixed income returns going forward, and then added his own assumptions about inflation rates and real return bond yields. He came up with nominal expected rates of return of 6.0 to 6.5 per cent for global equities and 4.0 per cent for bonds. His conclusion?

'Financial planners using more than a 4 per cent to 5 per cent rate of return for their projections (after fees) may be overstating the return that their clients can reasonably expect.'—Justin Bender, PWL Capital

"Financial planners using more than a 4 per cent to 5 per cent rate of return for their projections (after fees) may be overstating the return that their clients can reasonably expect."

The old 3-6-9 assumptions that many financial planners used to use – projecting three per cent inflation, six per cent fixed income returns, and nine per cent equity returns – are being abandoned.

"Depending on the client, I've been using five to six per cent [for a balanced portfolio] for the last three years," says Julie Leefe, a Registered Financial Planner at Prisma Financial Planning in Oakbank, Man. "I will go lower than five if the client is closer to retirement."

Paul Wilson, a Certified Financial Planner at JPW Insurance Retirement Investments in Halifax, also cautions not to expect double-digit returns going forward. "If you can do four percentage points better than inflation, that's pretty good," he says.

The bottom line is that it may now simply be too risky to use historical performance data for retirement planning projections. The boiler-plate warning on many investment documents that "past performance is not a guarantee of future returns" has never been more relevant.


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