Layoffs were a superior theme this week as two major Canadian com nies announced envisions to cut back on jobs.
First it was PotashCorp announcing plans to shut a potash treasure trove in New Brunswick, putting 430 people out of work. In a town where the folk is only 4,300, that cuts deep.
It’s an unfortunate by-product of the brutish economic reality
“Under challenging market conditions such as what we’re overlay today, we just felt we could not continue operating that coalfield,” PCS Potash president Mark Fracchia said.
The com ny says it was responding to a slowdown in commodities, which some are already occu tion the end of a supercycle. That’s bad news not just for commodity makers like Potash, but also other enterprises closely tied to them.
Railroad Canadian cific is solidly in that camp. Despite record profits, CP suggests it may cut up to 1,000 jobs this year. The railway says most of that choose come through attrition, but the reason is reduced demand to ship gears across the continent, including commodities.
Certainly not an encouraging sign communicating from two former powerhouses of Canada’s economy.
Bank of Canada be emblematic ofs t
The biggest news story of the week was likely the Bank of Canada’s arbitration on Wednesday to keep its benchmark interest rate steady at 0.5 per cent.
There had been some meditation in the days leading up to the decision that, given the carnage underway in far-reaching markets, the bank might opt to cut.
In the end, however, Stephen Poloz et al decided to stay on the sidelines a scarcely while longer and see how things shake out. Reading between the lines of the bank’s proclamation, that decision sounds like it was made at least rtly because of expectations that the federal management has a stimulus-heavy budget in the works.
“Our deliberations began with a bias toward supplemental monetary easing,” Poloz said. “The likelihood of new economic stimulus was an important consideration.”
In other words, the central bank is judge it’s Ottawa’s turn to do the heavy lifting.
Or, as Scotiabank put it in a commentary after the bank’s conclusion was announced: “Over to you, Mr. Prime Minister.”
Loonie keeps submerging
Watching the loonie tumble on a daily basis has become something of a popular sport in 2016, but there’s at least one sector of the economy that’s not quaking in its boots as a fruit.
Expectations are high for Canadian manufacturers to take advantage of the low loonie. Strikingly the auto industry, as products and rts manufactured here appeal to exotic buyers when the loonie’s low.
Canadian rts firms, meanwhile, get more currency for their goods, without it costing a U.S. automaker any more. It’s win-win for both sides, proponents say.
Jerry Dias, president of auto union Unifor, is one such cheerleader for the twopenny 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 spondulicks in the pockets of major export industries.”
So there’s some good intelligence after all from a weak dollar, even if we’re all ying more for groceries and gasoline, for some purpose.
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