Canada’s changing fortunes – West to East

February 27, 2015

 

Weekly Statistics:

Today

Week Ago

Year Ago

27-Feb-15

20-Feb-15

28-Feb-14

S&P TSX 15,234.34 15,172.24 14,209.59
S&P 500

2,105

2,110

 1,859.45

DJIA

18,133

18,140

 16,321.71

OIL

$49.52

$50.75

 $91.56

USD vs CAD

0.7991

0.7978

0.9039

Gold

$1,214

$1,203

 $1,324.80

 

In a major setback to TransCanada Pipeline’s Keystone XL project, President Obama has vetoed a bill from Congress that approved construction of pipeline. Earlier this month when Congress passed this bill, Obama promised to Veto the bill and he made good on his promise. It was only the third veto of Obama’s presidency,  fewer than any US president since the 19th century. Senate majority leader Mitch McConnell said that his chamber will consider overriding the veto but according to major DC commentators, they will not be able to secure enough votes required for two-thirds majority. Obama believes that through this bill, the Congress attempts to circumvent longstanding and proven processes for determining whether or not building and operating a cross-border pipeline serves the national interest. The White House had regularly insisted that the veto does not represent an opinion on the merits and demerits of the pipeline, but rather an insistence that the state department evaluation not be circumvented. First proposed in 2008, the Keystone pipeline would connect Canada’s oil sands to US refineries. When approved, the pipeline could be operational in next two years.

 

According to a new research by Bank of Nova Scotia, Canada’s economic growth will lag the US, Britain and Mexico, due to a slump in crude oil prices. Canada is projected to grow by 1.9% and 2% in 2015 and 2016 respectively. The research showed a widening gap between economic growth of Canada and the United States. The slump in crude prices has changed the fortunes for Canadian provinces. Alberta, which used to be Canada’s economic leader, is projected to grow by just 0.6% and 1.6% in 2015 and 2016 respectively. Alberta’s jobless rate will also spike to 5% this year as the province is  already trying to cover a $7 Billion hole in its budget by cutting salaries and reducing workforces. Ontario, a laggard over the past decade, will lead the nation, with economic growth of 2.7% and 2.4%.  Companies like GM, Linamar and Ford have already promised to make large investments in the province and this will create jobs in the foreseeable future. Overall, the next two years could be difficult for the Canadian economy and unemployment will remain at 6.7% for 2015 and 2016, though down from 2014’s 6.9%.

 

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s