Nuclear reactor research part of $10M deal

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

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

Hitachi will also contribute $5 million.

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

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

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

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

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

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

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

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Greece holds out for banks to ease terms

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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Mounties probe Calgary-based mining firm

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

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

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

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

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

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

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

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

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

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CMHC results show changing housing market

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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Canadian salaries inch higher

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

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

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

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

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

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

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

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Buffett pumps $5B into Bank of America

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

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

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

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

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

More to come

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Keystone pipeline clears major hurdle

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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