Jobs cut, loonie's rut & oil's glut: BUSINESS WEEK WRAP
Layoffs were a dominant theme this week as two major Canadian companies announced plans to cut back on jobs.
First it was PotashCorp announcing plans to shut a potash mine in New Brunswick, putting 430 people out of work. In a town where the population is only 4,300, that cuts deep.
It's an unfortunate by-product of the harsh economic reality
"Under challenging market conditions such as what we're facing today, we just felt we could not continue operating that mine," PCS Potash president Mark Fracchia said.
The company says it was responding to a slowdown in commodities, which some are already calling the end of a supercycle. That's bad news not just for commodity makers like Potash, but also other firms closely tied to them.
Railway Canadian Pacific is solidly in that camp. Despite record profits, CP says it may cut up to 1,000 jobs this year. The railway says most of that will come through attrition, but the reason is reduced demand to ship things across the continent, including commodities.
Certainly not an encouraging sign coming from two former powerhouses of Canada's economy.
Bank of Canada stands pat
The biggest news story of the week was likely the Bank of Canada's decision on Wednesday to keep its benchmark interest rate steady at 0.5 per cent.
There had been some speculation in the days leading up to the decision that, given the carnage underway in global markets, the bank might opt to cut.
In the end, however, Stephen Poloz et al decided to stay on the sidelines a little while longer and see how things shake out. Reading between the lines of the bank's statement, that decision sounds like it was made at least partly because of expectations that the federal government has a stimulus-heavy budget in the works.
"Our deliberations began with a bias toward further monetary easing," Poloz said. "The likelihood of new fiscal stimulus was an important consideration."
In other words, the central bank is saying it's Ottawa's turn to do the heavy lifting.
Or, as Scotiabank put it in a commentary after the bank's decision was announced: "Over to you, Mr. Prime Minister."
Loonie keeps diving
Watching the loonie tumble on a daily basis has become something of a national sport in 2016, but there's at least one sector of the economy that's not quaking in its boots as a result.
Expectations are high for Canadian manufacturers to take advantage of the low loonie. Particularly the auto industry, as products and parts manufactured here appeal to foreign buyers when the loonie's low.
Canadian parts firms, meanwhile, get more money for their goods, without it costing a U.S. automaker any more. It's win-win for both sides, advocates say.
Jerry Dias, president of auto union Unifor, is one such cheerleader for the cheap buck.
"The low dollar is wonderful," he told us in an interview this week. "When you are looking at a 69- or 70-cent dollar that's money in the pockets of major export industries."
In the meantime, here's a day by day of our best stories of the past seven days.
- Apple demands widow gets court order before releasing dead husband's password
- NewLeaf discount airline postpones service and says it will refund tickets
- Big 3 hike wireless prices in part due to cheap loonie
- ANALYSIS: Why the Bank of Canada shouldn't hike interest rates — but might anyway
- Oil dips below $27 amid global stock market turmoil
- Bank of Canada rate decision won't change mortgages much one way or another
- Tumbling loonie and inflation threat could force central bank to raise rates later
- ANALYSIS: How the cheap loonie is keeping gas prices high