Canada's mortgage rules to be held up as example for G-7
Economic woes put damper on Conservative election campaign
OTTAWA: CENTRAL BANKS JOIN FORCES
The Bank of Canada has joined other central banks in reducing short-term interest rates by one-half a percentage point. The Bank of Canada's overnight rate will drop by .5 per cent to 2.5 per cent. Canada's central bank joins those of the U.S., the Bank of England, the European Central Bank, and those of Sweden and Switzerland in the same move. The central banks are trying to encourage banks, consumers and businesses to borrow, to lend and to spend more freely. The interest rate cuts will have an immediate benefit for consumers whose mortgages and other floating-rate loans are tied to the rates set by central banks. The Bank of Canada explained that the tightening of credit conditions signifies a drop in demand and consequently a lesser fear of inflation.
TORONTO: CANADIAN BANKS DON'T PASS ALONG FULL CUT
Canada's big banks have declined to pass on to consumers the full cut in interest rates announced by the Bank of Canada and other central banks. TD Canada Trust, Canadian Imperial Bank of Commerce, Royal Bank of Canada, the Bank of Nova Scotia, the Bank of Montreal, National Bank and Laurentian Bank said they would drop their prime rate by one-quarter of a point to 4.5 per cent, instead of the full half-point which the central banks had hoped would be passed down to consumers. The prime rate is the benchmark used by banks to calculate interest on consumer loans, lines of credit and some mortgages. TD Bank explained that the turmoil in global credit markets makes it more expensive for banks to raise money, making it impossible at present to pass on the full half-point. In the U.S., such banks as Bank of American and Well Fargo did cut their prime rates by the same half-point as the U.S. Federal Reserve
TORONTO, OTTAWA: FINANCE MINISTER SEES SILVER LINING
Canadian Finance Minister Jim Flaherty repeated earlier statements by himself and Prime Minister Stephen Harper that Canada is well-positioned to cope with the global financial meltdown. Mr. Flaherty says the country has a strong banking system, a stable housing market and a federal budget surplus. The minister also pointed toward a report Wednesday by the International Monetary Fund that Canada will lead G-7 nations economically next year with 1.2 per cent growth. Mr. Flaherty will meet in Washington on Friday with his G-7 counterparts to discuss ways to strengthen the international financial system.
VICTORIA: FLAHERTY TO PRESENT CANADIAN MORTGAGE RULES AS MODEL
Meanwhile, the prime minister, Mr. Harper, says his finance minister will present Canada's mortgage rules as an exemplar when he meets the other G-7 ministers. The prime minister says those rules do not allow people who cannot afford them to buy houses. Mr. Harper says Canada isn't having to cope with the subprime mortgage turmoil that prevails in the U.S. because of "more prudent, conservative lending practices." The prime minister also says he supports the idea of an emergency summit of G-7 leaders to draw up a response to the global banking crisis.
MONTREAL: ALBERTA PREMIER WANTS PROVINCIAL SUMMIT
Alberta Premier Ed Stelmach says he wants a premiers' meeting to be held "reasonably soon" to discuss the national economy. The discussions would be aimed at promoting "stability, predictability" in the economy. A spokesman for Mr. Stelmach said such a meeting could take place as early as next week. Manitoba Premier Gary Doer agrees tht provincial leaders should meet soon to discuss the faltering economy. Doer says they normally meet in January but it makes sense to get together sooner in the face of a global financial crisis.
OTTAWA: ECONOMIC CONCERNS A DRAG ON TORY CAMPAIGN
Economic fears appear to be affecting public perceptions of Canada's political leaders. A poll by Canadian Press Harris-Decima says support for Prime Minister Stephen Harper is waning. The poll suggests that Mr. Harper's Conservative Party has 31 per cent support of the electorate, compared with 28 per cent for the Liberal Party. Twenty per cent of respondents support the New Democratic Party. The Green Party has 12 per cent support, and the Bloc Québécois, eight per cent. The president of Harris-Decima, Bruce Anderson, says the numbers indicate growing popularity for both the Liberal and New Democratic Parties compared with earlier polls. Mr. Anderson also says the poll suggests that Liberal Leader Stéphane Dion is marginally more popular than Mr. Harper for the first time in the campaign.
TORONTO: DION PITCHES INTO TORY PLATFORM
Liberal leader Stéphane Dion has criticized Mr. Harper for waiting until six days before introducing the Conservative Party platform on Monday, at the same time encouraging Canadians to take advantage of bargains on the stock market. Mr. Dion says the Tory platform doesn't contain a coherent plan to help the economy beyond scant relief for the manufacturing and forestry sectors. The Liberal leader told the same business audience at which Mr. Harper presented the platform that he fails to understand the fears ordinary Canadian have for their jobs and savings.
QUEBEC CITY: BLOC LEADER SEES TORY SUPPORT WANING
Bloc Québécois leader Gilles Duceppe says the Conservatives are losing support across the country because people have come to see them for what they are. Mr. Duceppe cited the dislike of the Harper government's position on youth crime. The Conservatives have pledged if elected to change the law to allow judges to sentence convicted killers between the ages of 14 and 16 to life in federal prison. Mr. Duceppe was speaking in Quebec City, where his party retained only one of the area's five seats in the House of Commons in the January 2006 election. The Bloc leader has again ruled out the possibility of a formal coalition in the House of Commons with another political party, reiterating that the Bloc would only consider occasional alliances on specific issues.
BOSASSO: CANADIAN OIL FIRM EMPLOYEE RESCUED
Troops in northern Somalia on Wednesday staged a dramatic rescue of a British national who'd been kidnapped earlier in the day for ransom. The victim works for a Canadian oil firm in Puntland region called Africa Oil Corporation. Troops rushed to the area and surrounded the kidnappers, killing one of them and wounding another before freeing the hostage. Puntland has largely been spared from the civil war that's killed thousands of people in southern Somalia. But kidnappings occur regularly and pirates and smugglers operating in the Gulf of Aden use Puntland as a hideout.
OTTAWA: BASQUE TERROR SUSPECT ON HUNGER STRIKE
An ethnic Basque Spaniard who is to be deported on Oct. 17 launched a hunger strike last Thursday in a detention centre in the Montreal area. The Spanish authorities claim he's a member of the Basque terrorist group ETA and is guilty of involvement in several terrorist attacks. He has been under arrest since June 2007 and maintains that he faces torture if deported. His lawyer contends that the evidence against his client was obtained through torture and that his deportation would therefore be illegal. The lawyer will attempt to obtain a postponement order next week in Federal Court of Canada.
CALGARY: HOME HEATING WITH GAS TO COST MORE
The head of the Canadian Gas Association, Michael Cleland, says consumers who heat their homes with natural gas will pay about 10 per cent more this winter than last, despite low gas prices in recent times. Mr. Cleland explains that gas distributors buy supplies well ahead of the home-heating season and prices were double what they are at present when distributors were stocking up during the summer. He added, however, that gas storage levels in North America will be well above the five-year average in coming months. Natural gas is used to heat most homes from Ontario westward. Electricity is most common in Quebec, while most homes in the Maritimes use heating oil.
OTTAWA: LABOUR FEDERATION DEFENDS TEMPORARY NEWCOMERS
The Canadian Labour Congress has asked political parties and candidates in the present election campaign to speak out for better treatment for temporary foreign workers who come to Canada legally. The CLC, the country's biggest labour organization, says the temporary workers program makes them virtual hostages of their employers and claims as well that they cannot count on the minimal protection offered under the country's labour laws. CLC Vice-president Barbara Byers says the temporary workers realize they risk being repatriated if they complain they're not being paid the wages promised or of overwork, health problems or inadequate lodging. The CLC says the federal government should allow the temporary workers to become immigrants, as a first step toward citizenship.
UNITED STATES
Treasury Secretary Henry Paulson has warned that more financial institutions are destined to fail in the U.S. Mr. Paulson says as well that the $700-billion rescue package approved by Congress last week won't mean an end to bankruptcies and won't in any case be in place for the government to buy up "toxic" assets for several weeks. The secretary explained that the package isn't intended to "...save every financial institution for its own sake." Mr. Paulson has recommended that emerging countries be included in international talks to surmount the crisis. The Brazilian government has said that a meeting of central bankers and finance ministers representing the G-20 grouping of rich and emerging nations will take place in Washington this weekend.
ICELAND
Prime Minister Geir H. Haarde has acknowledged that it will take the small North Atlantic nation several years to recover from the global banking collapse. He also admits that it was unwise for such a small country to try to play a leading role in international banking. Iceland's banking industry dwarfs the rest of the economy because of a stock market boom in the mid-1990s. The government on Wednesday placed the country's third-biggest bank, Glitnir, in receivership and the regulator announced that the bank's Swedish and Finnish businesses will be sold. Glitnir's plight has jeopardized a plan to take Clearwater Seafoods Income Fund, one of Canada's biggest publicly traded seafood companies, private. The Icelandic bank was to have provided 10 per cent of the financing for the transaction.
UKRAINE
Ukraine's president has dissolved parliament and announced that parliamentary elections will be held. Viktor Yushchenko made the announcement a few weeks after his coalition government collapsed. His negotiations to form a new coalition with Prime Minister Yulia Tymoshenko and other political rivals have failed. No date was given for the elections. The elections will be the third in Ukraine since Mr. Yushchenko became president following the Orange Revolution four years ago.
GEORGIA
Russia says it has completed its military withdrawal from the buffer zones inside Georgia around the territories of South Ossetia and Abkhazia, two days before a ceasefire deadline to do so. The troops will remain inside the territories. The EU monitoring confirms that Russia appears to have finished most of the scheduled withdrawal. The Russian troops invaded Georgia in August after the Georgian military tried to seize control of South Ossetia. Georgia's Foreign Minister Eka Tkeshelashvili says Russian troops still must withdraw as well from two Georgian-populated enclaves in the latter territory by the Friday deadline.
EGYPT
The Palestinian military movement Hamas says it and its rival Fatah will meet later this month in Cairo to discuss the formation of a unity government. Musa Abu Marzuk, the second-ranking Hamas official at the movement's headquarters in Damascus, made the revelation after a meeting with Egypt's intelligence chief to discuss an Egyptian proposal to end the feud between the two Palestinian movements. The proposal calls for a transitional government comprising ministers acceptable to both sides and a restructuring of the Palestinian security forces with Arab oversight, as well as new presidential and parliamentary elections. The leader of Fatah's parliamentary caucus said his movement supports a "transitional government of national consensus" but won't form a unity government with Hamas, such a government only being possible after presidential and parliamentary elections are held.
OTTAWA: FEDERAL PENSION FUND RELATIVELY UNSCATHED
The Canada Pension Plan Investment Board has acknowledged that the current banking crisis has caused a certain loss in the value of assets. The Board says that like many other investors, its portfolio has declined in the general downturn in financial markets. However, it also says it has virtually credit exposures to subprime mortgages when that category of investment began to evince problems in August 2007. The Board declined to give figures for its losses. The Board invests funds not needed by the Canada Pension Plan to pay benefits to 17 million Canadian contributors and beneficiaries. On June 30, it had $127.7 billion of assets.
VANCOUVER: CANFOR LAYS OFF 290
Canfor Corp., the country's biggest softwood lumber firm, has announced it will close indefinitely its plywood plant in Fort Nelson, BC, throwing 290 employees out of work. The layoffs will go into effect when existing inventories are exhausted. Canfor blames the layoffs on poor demand and low prices for plywood across North America.
MARKETS
TSX on Wednesday: 10,055 up 226. Canadian dollar: down 1.25 cents to US89.06 cents. The euro was worth C$1.5339, up 2.66 cents. Light, sweet crude: US$88.95, down $1.11.
BASEBALL
In Major League Baseball, hard-throwing Canadian right-hander Rich Harden will make $7 million dollars U.S. next season after the Chicago Cubs exercised his option. Chicago was swept in three games by the Dodgers in the first round of the playoffs.
Weather
British Columbia on Wednesday: rain, high 10 Celsius Vancouver. Yukon, Nunavut: sun. Northwest Territories: flurries. Whitehorse 4, Yellowknife 2, Iqaluit 1. Alberta: sun. Saskatchewan, Manitoba: rain. Edmonton 9, Regina 8, Winnipeg 11. Ontario: sun south, rain north. Quebec: rain. Toronto, Ottawa 18, Montreal 19. Maritimes: rain. Newfoundland and Labrador: sun. Fredericton, Charlottetown 14, Halifax 15, St. John's 12.
