Wednesday, April 18, 2012

RCI Cyberjournal

Edition 17 April 2012
Canadian International Financial Weather
Canadian

Ontario premier still hasn`t budget deal
Premier Dalton McGuinty said Tuesday that the chances of Ontario voters returning to the polls for the second time in six months are slight, even though the
minority Liberals have yet to strike a budget deal with the New Democratic Party to avert another election. The Opposition Conservatives have already said they'll vote against the budget, so Mr. McGuinty must woo the New Democrats for his government to survive. The premier said he's still optimistic that he'll reach a budget
deal with the NDP to avoid defeat on April 24, when the budget motion will be put to a vote in the legislature. One of the New Democrats' key demands is to hike taxes for the wealthy by introducing a two percentage point surtax on incomes over $500,000. That puts the premier in a tight spot, because he has repeatedly
promised not to raise taxes to eliminate the deficit, despite doing so after the Liberals were elected in 2003.





International

UN needs more boots on the ground in Syria
UN Secretary General Ban Ki-moon said on Tuesday that a United Nations mission to oversee an end to violence in Syria may need to bring in its own aircraft and deploy more troops to ensure that a firm ceasefire takes hold throughout the country, The six-day-old truce has held in some parts of Syria since President Bashar al-Assad pledged to enforce it last week. But in strong opposition areas such as Homs, Hama, Idlib and Deraa the army continues to attack and battle rebels, using heavy weapons in violation of the pledge by Damascus to pull back. Mr. Assad's government has agreed to allow a small UN force to monitor the ceasefire. But the planned 250-strong mission is a fraction of the size of UN peacekeeping forces sent to other conflicts. Mr. Ban says the ceasefire was being "generally observed" although there was still violence. He says in Luxembourg that the UN was asking the European Union to provide helicopters and planes for the operation, which he would propose formally to the Security Council on Wednesday.


Gulf Arabs warn Iran over dispute island
Gulf Arab states are warning Iran that they stand united in an escalating dispute over strategic islands controlled by Tehran but also claimed by the United Arab Emirates. A statement Tuesday by the six-nation Gulf Cooperation Council told Iran that any perceived aggression against the UAE is considered an affront to the entire bloc, which includes Iran's main regional rival Saudi Arabia. The message could intensify the tensions over Abu Musa and two nearby islands in the Gulf between the UAE and Iran. The GCC has sharply denounced last week's visit to Abu Musa by Iranian President Mahmoud Ahmadinejad. Also Tuesday, Iran's official news agency IRNA described plans to turn Abu Musa into an Iranian tourist zone.


Earthquake rattles Chile
A powerful 6.7 magnitude earthquake struck near Chile's port of Valparaiso early Tuesday, shaking buildings as far away as the capital Santiago. But there were no reports of significant damage and the country's main copper mines were unaffected. Reports say one elderly man died from a heart attack during the quake. Apartment buildings in Santiago shook heavily. Canada's Prime Minister Stephen Harper and his entourage also experienced the quake in their hotel in Santiago. Mr. Harper returned to Canada Tuesday after attending the Summit of Americas in Colombia, followed by trade talks with the Chilean government.



African Union suspends Guinea-Bissau after coup
The African Union on Tuesday suspended Guinea-Bissau after a coup and arrests of top officials, and said they may impose sanctions on coup leaders and supporters in the tiny West African nation. The AU's peace and security council announced the automatic suspension Tuesday at AU headquarters in Ethiopia's capital. The Council says the AU could apply more sanctions if coup leaders don't take measures to return the country to constitutional rule. Soldiers overthrew the government Thursday night.
The AU said in a statement Tuesday that the sanctions could affect those responsible for the coup and their supporters, and could include travel bans, asset freezes and more.



Norwegian gunman unrepentant
Norwegian gunman Anders Behring Breivik insisted Tuesday he would massacre 77 people all over again, calling his July rampage the most "spectacular" attack by a nationalist militant since World War II. Reading a prepared statement in court, the anti-Muslim extremist lashed out at Norwegian and European governments for embracing immigration and multiculturalism. Maintaining he acted out of "goodness, not evil" to prevent a wider civil war, Breivik vowed, "I would have done it again."
Mr. Breivik has five days to explain why he set off a bomb in Oslo's government district on July 22, killing eight people, and then gunned down 69 others, mostly teenagers, at a Labor Party youth camp outside the Norwegian capital. He denies criminal guilt, saying he was acting in self-defence, and claims the targets were part of a conspiracy to "deconstruct" Norway's cultural identity.



Mali has caretaker prime minister
The military junta ruling in Mali has named an interim prime minister. Last week, the leaders of last month's military coup named a caretaker president as a supposed step to the return of constitutional government. However, that return was thrown into doubt on Tuesday when soldiers arrested several key allies of ousted President Amadou Toumani Touré. The coup emboldened Tuareg rebels to seize control of northern Mali.





Financial

IMF bullish but cautious on Canadian economy
The Internationa Monetary Fund warns in a new forecast that Canada is benefiting from generally improved global conditions, but there are still plenty of risks external and internal that could derail the fragile recovery, The IMF`s spring global economic outlook predicts Canada economy will expand by 2.1 per cent this year and 2.2 in 2013.That`s an upgrade its January prediction of 1.7 and two per cent. Although still moderate by historical standards, the expected growth rates puts Canada along with the U.S. in the top tier of the Group of Seven industrial nations. The global economy, led by China, also was given a modest upgrade to 3.5 per cent this year and 4.1 per cent next.



Cuts to non-smoking program condemned
National health groups are condemning the Canadian government and Health Minister Leonna Aglukkaq for cuts to a federal non-smoking program. Melodie Tilson, from the Non-Smokers Rights Association, says the cuts give tobacco companies the upper-hand in influencing future health policy decisions. Mrs. Tilson is one of several public health experts and non-smoking advocates who are critical of the recent federal budget that cut $15 million, more than 30 per cent, from the Federal Tobacco Control
Strategy. The program has successfully reduced the number of smokers across Canada, including a reduction of youth tobacco use by half. There are still about five million smokers in the country. The health groups say that decreasing funding for the program will leave Health Canada ill-prepared for emerging issues, such as growing use of smokeless tobacco products and flavoured water pipe
tobacco.



Chrétien wants Liberals, NDP to merge
A former Canadian Prime Minister, Jean Chrétien, is calling for the federal Liberal and New Democratic parties to merge. He does not agree that a merger now would amount to a takeover of his party. The Liberals won three majorities under his leadership. He says what matters is the brain power each side brings to the table. In last May's election, the NDP became the Official Opposition, while the Liberals fell to third place, their worst showing ever.




Ontario premier doesn't see early election
Premier Dalton McGuinty said Tuesday that the chances of Ontario voters returning to the polls for the second time in six months are slight, even though the minority Liberals have yet to strike a budget deal with the New Democratic Party to avert another election. The Opposition Conservatives have already said they'll vote against the budget, so Mr. McGuinty must woo the New Democrats for his government to survive. The premier said he's still optimistic that he'll reach a budget deal with the NDP to avoid defeat on April 24, when the budget motion will be put to a vote in the legislature. One of the New Democrats' key demands is to hike taxes for the wealthy by introducing a two percentage point surtax on incomes over $500,000. T hat puts the premier in a tight spot, because he has repeatedly promised not to raise taxes to eliminate the deficit, despite doing so after the Liberals were elected in 2003.



Central bank wanrs lending rates to rise
The Bank of Canada has left the key overnight interest rate unchanged at one per cent, but is signalling the days of low borrowing costs are nearing an end. The bank says that's because economies around the world and in Canada are doing better than it previously thought and inflation is stronger. For Canada, the bank believes that means economic growth of 2.4 per cent this year, well above the two per cent expectation it set in January, although next year's expansion will be more moderate at 2.2 per cent.
The bank envisions the economy will return to full capacity for the first time since the recession in the first half of next year, one or two quarters ahead of its expected pace. In light of the reduced slack, the bank says some modest withdrawal of what it views as very stimulative interest rates may be in the offing.



Bankrupt forestry firm shakes up ranks
Sino-Forest Corp. said Tuesday that founding chairman emeritus Allan Chan has resigned from the troubled Chinese timberland company amid a housecleaning in the executive suite. Meanwhile, other unspecified changes are expected to bolster the powers of a court-appointed monitor overseeing the company's restructuring. The company, which has been accused of fraud, said chief financial officer David Horsley has also stepped down from his role, but would remain an employee. Sino-Forest also fired several other top executives. Sino-Forest Corp., once the most valuable forestry company listed on the Toronto Stock Exchange, fell from grace last year after being accused of massive fraud by U.S. short seller Muddy Waters Research. The company is operating under the Companies' Creditors Arrangement Act and has put itself up for sale.



Markets
The Toronto Stock Exchange on Tuesday: 12,136.94, up 99. Canadian dollar: US$1.00. Euro: $1.29. Oil: $104.22 + $1.29.




Weather

Weather
British Columbia on Wednesday: rain, high C12 Vancouver. Yukon: mix sun cloud. Northwest Territories: sun. Nunavut: snow. Whitehorse 9, Yellowknife -1, Iqaluit -11. Alberta: rain. Saskatchewan: sun. Manitoba: mix sun cloud. Edmonton 6, Regina, Winnipeg 8. Ontario: rain north, mix sun cloud south. Quebec: sun. Toronto 10, Ottawa, Montreal 12. New Brunswick, Prince Edward Island: sun. Nova Scotia: mix sun cloud. Newfoundland and Labrador: rain. Fredericton 15, Halifax 14, Charlottetown 6, St. John's 15.





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