'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.

View the original article here

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.

View the original article here

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

View the original article here

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.

View the original article here

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.

View the original article here

ECB seeing European 'stabilization'

The eurozone economy is showing "tentative signs of stabilization" European Central Bank president Mario Draghi says.

Draghi made his comments Thursday after the bank, as expected, left its main interest rate unchanged at one per cent.

It had made two monthly quarter point reductions in October and November, in a move to stimulate borrowing and investment in the region, which many economists think is heading back to recession as a debt crisis hits business and consumer confidence.

Draghi says the bank saw "tentative signs of stabilization of activity at low levels" although the economy faced "substantial downside risks."

However, he conceded that the economy of the 330 million or so people in the 17 countries using the shared currency faces "substantial downside risks" from the debt crisis that began more than two years ago.

"It is not possible to express a judgment of confidence," he said at a news conference. He predicted the economy would recover in 2012, "albeit very gradually."

The eurozone grew by only 0.1 per cent in the third quarter and many economists predict a recession.

Draghi appeared to leave the door open for further cuts if the bank thinks they are necessary. "We never precommit," he said. "In this situation of high uncertainty, we look at all factors ... we monitor all developments and we decide."

He added that the ECB "stands ready to act if needed."

The ECB has never cut rates below 1.0 per cent in its 13-year history — not even during the global crisis that followed the collapse of U.S. bank Lehman Brothers in 2008.

"Draghi didn't rule out any further moves," said Benjamin Reitzes, senior economist at BMO Capital Markets.

The euro gained one per cent to trade at $1.28 U.S. after Draghi's comments and amid other positive signs in the European debt crisis Thursday.

Spain and Italy successfully raised nearly €22 billion ($28.7 billion Cdn) in two closely watched auctions that showed renewed investor confidence in their attempts to get a grip on their debt problems.

Spain sold nearly €10 billion ($13 billion) in three- and four year bonds with demand strong and the amount sold double the maximum sought.

Italy saw its borrowing costs drop sharply as it sold euro12 billion ($15.7 billion) in what was also its first test of market sentiment of the new year.

Both debt-laden countries have been the focus of worries they might be dragged further into the crisis threatening the 17 countries that use the euro as their currency that has already forced Greece, Ireland and Italy to seek billions in bailout money.

Meanwhile, the Greek government held crucial talks with representatives of private bondholders to reach a deal on a bond swap that would reduce the country's debt load and is an integral part of its second bailout package.

Charles Dallara, the head of the Institute of International Finance, which represents the country's private bondholders, met Prime Minister Lucas Papademos and finance chief Evangelos Venizelos.

The negotiations were to resume Friday.

"A range of issues were discussed and some key areas remain unresolved. Discussions will continue in Athens tomorrow, but time for reaching an agreement is running short," a statement from the IIF said.

"It is essential in order to finalize the voluntary (bond swap) agreement that support be given by all official parties in the days ahead."

Greece hopes to finalize the deal soon for the private creditors to take a voluntary 50 per cent reduction in the value of their Greek bond holdings.

It needs to clinch the deal before it can access any more rescue loans, which it will need to help repay €14.5 billion ($18.9 billion) in bonds on March 20.

However, there are also investors with an interest in reducing the chances of a deal.

Some hedge funds, for instance, decide to buy up bonds at cheap prices in a bet that they can turn a high profit if they get repaid in full. They may therefore work toward blocking or delaying any agreement on restructuring Greece's debt.

With files from The Associated Press

View the original article here

Natural gas price slump deepens

The price of natural gas continued to drop Thursday after the government said U.S. supplies are well above normal for this time of year.

Natural gas prices closed eight cents, or 3.1 per cent, at $2.69 US per 1,000 cubic feet in New York.

Gas supplies have ballooned since the fall.

On Thursday, the Energy Information Administration said supplies are 13.4 per cent higher than what they were a year ago and 17 per cent above the five-year average.

Prices have fallen by 13 per cent in the past week.

Canada’s natural gas producers have been struggling with low prices ranging between three and four dollars for the past two years.

One of the biggest, Calgary-based Encana, on Thursday reached a new 52-week low, touching $18.15, off 47 per cent from its high in March. Its stock closed down 2.2 per cent at $18.20.

Improvements in drilling technologies, especially in the fracturing of shale, have created a glut by opened up enormous new deposits, especially in the eastern U.S. states.

And demand has fallen with a warm winter in North America and a weak U.S. economy.

About half of U.S. homeowners use natural gas for heat.

With files from The Associated Press

View the original article here