Canada Dollar Falls Versus Most Peers As U.s. Impasse Persists

CANADA STOCKS-Energy shares pull TSX higher as Gulf storm lifts oil

These are troubling times for Waterloo, the town of 100,000 that was transformed by Research In Motion’s BlackBerry into Canada’s Silicon Valley. (AP Photo/The Canadian Press, Chris Young) (Credit: AP) Robert Baker cant wait to finish his electrical engineering degree at the University of Waterloo and get away from the withering Canadian technology company down the street that used to draw the top students BlackBerry Ltd. Joining BlackBerry after graduation was always a dream job, said Baker, 21, munching on a bag of carrots at the engineering school about 70 miles (112 kilometers) southwest of Toronto. Not so much anymore, he said, adding he plans to head to California after graduation. Canadas reputation as a technology innovator was diminished after the smartphone maker announced last month a surprise $934 million pretax writedown for unsold phones, and said it would fire 4,500 workers almost 40 percent of its employees. The worlds 11th-largest economy is already short on research drivers like Nortel Networks Corp., which filed for bankruptcy and was broken up and sold in parts to foreign tech companies. BlackBerrys current woes may further crimp spending budgets that havent returned to levels of a decade ago. BlackBerry accounts for a big chunk of what remains of total research and development spending in that information technology industry, said Michael Burt, director of industrial economic trends at the Conference Board of Canada in Ottawa. Losing the company would certainly curtail productivity growth in that particular industry and its possible it may have a larger net effect on total productivity in Canada. Big Spender The company formerly known as Research In Motion Ltd. is Canadas biggest spender on research and development over the past 12 months at C$1.49 billion ($1.44 billion), according to data compiled by Bloomberg, more than four times the amount of the second-place company, Montreal-based Bombardier Inc. Without BlackBerry, Canada wouldnt have a company among the worlds top 300 R&D spenders on research and development. The firm said Sept. 27 it cut such spending in the first six months of its fiscal year by 2 percent from a year earlier, to $718 million. During this transition period, we are refocusing our business to ensure we have the right investments and resources in the right places so that we continue to innovate and stay competitive, the company said in an e-mail in response to a question about whether its research budget would be cut more.

CANADA FX DEBT-C$ firms but kept to range by U.S. government shutdown

It wont create more production as a result. In fact, just keeping Canadas current level of production is the industrys best case scenario, said McCabe. Rodgers said the downward trend could be reversed as long as companies continue to focus on innovation and unions work co-operatively with carmakers to lower costs and boost productivity. If you take a look at Fords announcement, at the collective agreement reached between GM Ingersoll and Unifor last month, we believe there is good news in protecting what we do have, said Rodgers. Rodgers also called on the federal government to enhance global trade opportunities. Mexico has been able to attract more investment because it has free trade agreements with several countries. Canada has very few, but the Conservative government seems to be committed to making it more attractive to build and export from Canada. Jim Stanford, chief economist at Unifor, defended Canadian labour costs. Canadas costs are totally comparable to other developed countries, said Stanford. The high dollar doesnt help. But we have some advantages, too: higher productivity than the U.S., $5 per hour savings from medicare and a higher quality workforce. We cant compete on cost with Mexico or other low-wage countries, nor should we try to. Stanford reiterated the unions call for a national auto policy. He (McCabe) is the latest of several people to express concern about Canadas share of future investment spending by the assemblers. And were concerned about that as well. We think we need to have an integrated auto policy framework where federal and provincial governments using both a carrot and a stick to ensure that Canada wins a fair share of future investment. Tags: AutomotiveCompass , Chrysler , Ford , General Motors , Unifor Lively discourse is the lifeblood of any healthy democracy and The Star encourages readers to engage in robust debates about our stories. But, please, avoid personal attacks and keep your comments respectful and relevant.

More Concern The U.S. government began its first partial shutdown in 17 years on Oct. 1 as Republicans who control the House insisted on changes to the nations 2010 health-care law, President Barack Obama s signature legislative achievement. The Senate, controlled by Democrats, refused. Congress also faces the statutory debt ceiling, which the Treasury has said will be reached Oct. 17. The shutdown is bad for growth in Canada, and as we get closer to the debt-ceiling deadline there is more concern manifesting, which is weighing on the U.S. dollar relative to the loonie, Shaun Osborne , chief currency strategist at Toronto-Dominion Banks TD Securities unit in Toronto, said by phone. We will probably continue to chop around in a range until this monumental uncertainty is cleared up. Its all a question of waiting for Washington at this point. The discount Canadas benchmark crude-oil grade, Western Canada Select, faces to West Texas Intermediate oil increased to $34.50 per barrel, the most since January. WTI futures traded at $103.56 a barrel today in New York . Ivey Index Canadas purchasing managers increased spending in September by less than economists forecast, according to a gauge released today by Western Universitys business school. The Ivey Purchasing Managers Index rose to 51.9 in September on a seasonally adjusted basis, following an August reading of 51.0, according to a statement on the London , Ontario universitys website. Readings of more than 50 indicate purchasing by governments and companies increased.

Shriveled BlackBerry Has Canada Needing Research Driver

With the shutdown dragging into a fourth day, investors watched closely as Republican members of the House of Representatives held their ground in a standoff with President Barack Obama. But the market appeared to shrug off fears that U.S. lawmakers will fail to resolve the budget crisis and prevent a debt default. “There’s a certain amount of fatigue from several days of losing trade,” said John Stephenson, senior vice president at First Asset Investment Management Inc, adding that investors expect a resolution soon. “Today the story is all about energy,” he said. “Investors are looking around and saying energy looks attractive.” Investors are starting to see value in Canadian energy stocks because of consistently performing large-cap names, attractive valuations, and a world that’s becoming more energy-dependent, Stephenson said. The Toronto Stock Exchange’s S&P/TSX composite index closed up 23.53 points, or 0.18 percent, at 12,758.65. Rick Hutcheon, president and chief operating officer at RKH Investments, said the TSX will tread water until the U.S. political stalemate is resolved but will make gains as the economy improves and commodity prices stabilize. “Everyone is sitting on their hands, waiting for Washington to make their move,” he said. “They’ll have their bickering and fighting, but ultimately they’ll come to an agreement.” Seven of the 10 main sectors on the index were higher.

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“There’s too much at stake here, not just for the United States but globally.” The Canadian dollar ended the session at C$1.0292, or 97.16 U.S. cents, stronger than Thursday’s close of C$1.0326, or 96.84 U.S. cents. The U.S. dollar, traditionally seen as a safe haven, rose 0.5 percent against a basket of currencies . Following a brief spike after the U.S. Federal Reserve’s decision to stand pat on its economic stimulus program on Sept. 18, the Canadian dollar has been trading in a tight range. Barring a resolution or other catalyst, Sylvester sees the loonie trading in a range between C$1.0280 and C$1.0340. “There’s very little evidence right now in the near term to argue we’re going to see a directional break from those ranges,” he said. With the government shut down in Washington, the U.S. report on nonfarm payrolls, one of the most important data releases for markets, was not issued on Friday as scheduled.

Canada’s auto production expected to fall 25 per cent by 2020

Even there, sales have soured. Revenue from Latin America plunged 62 percent last quarter from a year earlier, and sales in the Asia-Pacific region tumbled 28 percent. Obamas CrackBerry In its prime, BlackBerry produced a smartphone so cool and addictive it was nicknamed the CrackBerry, with high-profile devotees like U.S. President Barack Obama . Its stock peaked at $147.55 in June 2008. The company created high-paying jobs in Waterloo, where almost 9 percent of the citys adult population earned C$100,000 or more in 2010, more than triple the countrys median income. BlackBerrys hometown, Waterloo, has a population of just under 100,000. The city and surrounding region has grown 15 percent in the past 10 years according to Statistics Canada , faster than the countrys 11 percent growth. Employment has risen 10.6 percent since the end of the recession, compared with a national average of 5.7 percent. Going Private Now, Fairfax Financial Holdings Ltd., BlackBerrys largest shareholder, has made a tentative offer to buy the company for $4.7 billion, or $9 a share, and take it private. Fairfax, led by Chief Executive Officer Prem Watsa , has not disclosed the names of any of its partners in the bidding consortium, and hadnt secured financing for the deal at the time it was announced Sept. 23. BlackBerry shares were down 0.5 percent to $7.69 at 4 p.m. in New York , more than a dollar below the offer price, reflecting investor concerns the deal may not get done.