- Canada to outpace G-7Business 6:54 am - 2,677 views
- Giant eyewear mergerBusiness 6:25 am - 392 views
- Can UK float without EU?Business 1,238 views
- Moody's fined $864MBusiness 1,672 views
- Millennials falling behindBusiness 2,453 views
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The International Monetary Fund says uncertainty surrounding the incoming Donald Trump administration in the United States is making it difficult to forecast how the global economy will perform this year.
But the Washington-based IMF says it estimates the Canadian economy will grow by 1.9 per cent in 2017 and 2.0 per cent in 2018. That compares with its previous estimate of 1.9 per cent growth in both years.
Canada is expected to have the second-fastest growth among the G7, ahead of the four European members and Japan.
The IMF estimates the United States will lead the G7, with its economy expanding by 2.3 per cent this year and 2.5 per cent next year — up from previous estimates of 2.2 per cent in 2017 and 2.1 per cent in 2018.
Its latest outlook for advanced economies as a whole has improved for the 2017-18 period, compared with its October estimates, due to somewhat stronger activity in the second half of 2016 and projected U.S. government stimulus.
But the IMF's estimates for several large developing economies has been revised lower — notably India, Brazil and Mexico.
It estimates Mexico's economy will grow about 1.7 per cent in 2017 and 2.0 per cent in 2018 — down 0.6 of a percentage point in each year from its October outlook.
Mexico has been a frequent target of comments by President-elect Donald Trump, who has promised before and since the November election that the United States will build a wall between the two countries.
Trump has also said he will scrap the North American Free Trade Agreement — signed by Canada, the United States and Mexico — and focus on ways to keep jobs in the United States.
A new European eyewear giant is set to emerge as Italian frames maker Luxottica — maker of brands like Ray-Ban and Oakley — joins with French lens manufacturer Essilor in a multibillion-euro merger.
Essilor International SA announced Monday it had reached a share exchange deal with Luxottica's main shareholder, Delfin, to create a combined company making both frames and lenses.
Shares in Luxottica and Essilor jumped on the news.
The statement said the new company would have combined revenues of more than 15 billion euros ($16 billion), 140,000 employees and sales in more than 150 countries.
Essilor said the merger is an effort to meet growing global demand for corrective lenses, sunglasses and luxury frames.
Britain's treasury chief says the UK will take whatever steps necessary to stay competitive in the global economy, if the country is shut out of the European Union market.
Philip Hammond's comments Sunday in the German newspaper Welt am Sonntag came as Prime Minister Theresa May is expected to give a speech this week offering the most detailed insight yet into her plans for leaving the EU.
Hammond says the UK's economy may be forced to change without access to the single market, but "you can be sure that we will do whatever we have to do."
EU leaders have made free movement of people a condition for Britain's continued access to the single market. May says voters who supported "Brexit" want the government to reassert control over its borders.
Moody's Corp. has agreed to pay nearly $864 million to settle federal and state claims it gave inflated ratings to risky mortgage investments in the years leading up to the financial crisis.
The deal announced Friday was struck among the New York-based rating agency, the Justice Department and the attorneys general for 21 states and the District of Columbia.
It calls for $437.5 million to go to the Justice Department and $426.3 million to be divided among the states and the District of Columbia.
Moody's — along with the other two major rating agencies, Standard & Poor's and Fitch — were widely criticized for giving low-risk ratings to the risky mortgage securities being sold ahead of the crisis, while they reaped lucrative fees.
In the settlement, the world's second-largest credit ratings agency acknowledged that it didn't follow its own standards in rating the risk of securities backed by home mortgages and the collateralized debt obligations that relied on their health.
The system spread the risk of mortgage defaults to banks around the globe and led to a string of financial collapses in 2008 when people began defaulting on risky subprime loans.
That caused the housing market to implode in many areas and sparked the worst U.S. recession since the Depression.
Moody's acknowledged that it used a more lenient standard for certain financial products and didn't make public the differences from its published standards.
"Moody's failed to adhere to its own credit rating standards and fell short on its pledge of transparency in the run-up to the Great Recession," Principal Deputy Associate Attorney General Bill Baer said in a statement.
Under the settlement, Moody's agreed to a number of reforms designed to make sure its credit ratings are objective, including separating commercial and credit rating functions; ensure changes to its rating methods are independently reviewed, and ensuring that some employees aren't compensated based on Moody's own financial performance.
"The agreement acknowledges the considerable measures Moody's has put in place to strengthen and promote the integrity, independence and quality of its credit ratings," Moody's said in a statement. "As part of the resolution, Moody's has agreed to maintain, for the next five years, a number of existing compliance measures and to implement and maintain certain additional measures over the same period."
Baby Boomers: your millennial children are worse off than you.
With a median household income of $40,581, millennials earn 20 per cent less than boomers did at the same stage of life, despite being better educated, according to a new analysis of Federal Reserve data by the advocacy group Young Invincibles.
The analysis being released Friday gives concrete details about a troubling generational divide that helps to explain much of the anxiety that defined the 2016 election. Millennials have half the net worth of boomers. Their home ownership rate is lower, while their student debt is drastically higher.
The generational gap is a central dilemma for the incoming presidency of Donald Trump, who essentially pledged a return to the prosperity of post-World War II America. The analysis also hints at the issues of culture and identity that divided many voters, showing that white millennials — who still earn much more than their blacks and Latino peers — have seen their incomes plummet the most relative to boomers.
Andrea Ledesma, 28, says her parents owned a house and were raising kids by her age.
Not so for her. Ledesma graduated from college four years ago. After moving through a series of jobs, she now earns $18,000 making pizza at Classic Slice in Milwaukee, shares a two-bedroom apartment with her boyfriend and has $33,000 in student debt.
"That's not at all how life is now, that's not something that people strive for and it's not something that is even attainable, and I thought it would be at this point," Ledesma said.
Her mother Cheryl Romanowski, 55, was making about $10,000 a year at her age working at a bank without a college education. In today's dollars, that income would be equal to roughly $19,500.
Romanowski said she envies the choices that her daughter has in life, but she acknowledged that her daughter has it harder than her.
"I think the opportunities have just been fading away," she said.
The analysis of the Fed data shows the extent of the decline. It compared 25 to 34 year-olds in 2013, the most recent year available, to the same age group in 1989 after adjusting for inflation.
Education does help boost incomes . But the median college-educated millennial with student debt is only earning slightly more than a baby boomer without a degree did in 1989.
The home ownership rate for this age group dipped to 43 per cent from 46 per cent in 1989, although the rate has improved for millennials with a college degree relative to boomers.
The median net worth of millennials is $10,090, 56 per cent less than it was for boomers.
The declining fortunes of millennials could impact boomers who are retired or on the cusp of retirement. Payroll taxes from millennials helps to finance the Social Security and Medicare benefits that many boomers receive — programs that Trump has said won't be subject to spending cuts. And those same boomers will need younger generations to buy their homes and invest in the financial markets to protect their own savings.
"The challenges that young adults face today could forecast the challenges that we see down the road," said Tom Allison, deputy policy and research director at Young Invincibles.
U.S. dairy groups are calling on Donald Trump to set his sights on Canada's "protectionist" dairy practices as he seeks to safeguard American jobs.
The International Dairy Foods Association, National Milk Producers Federation and U.S. Dairy Export Council, along with the National Association of State Departments of Agriculture say a planned national Canadian ingredients strategy will block U.S. exports in violation of NAFTA and the World Trade Organization.
Ontario milk pricing policies adopted last April are hurting U.S. exports of ultra-filtered milk used to make dairy products, costing thousands of American jobs especially in border states like Wisconsin and New York, said a letter sent Wednesday to the incoming president and his trade nominees.
The policy allows Canadian dairy processors to buy domestic milk at world market prices instead of higher prices controlled by the national supply management system. The U.S. dairy groups say that provides the processors with an incentive to cut milk imports.
"The entire U.S. dairy industry is being hurt, as milk prices are being driven down nationally by Canada's trade actions," they wrote.
The groups say an ongoing effort to implement a national policy puts further pressure on American communities that export milk and other dairy products to Canada.
The U.S. dairy sector says they are already restricted to the Canadian market by "exorbitant tariffs" and limited market access.
"It is clear that these [additional] policies were implemented to intentionally block imports from the United States and are therefore in direct violation of Canada's trade commitments."
The Dairy Farmers of Canada say they are watching the situation closely but remain confident that the federal government supports the Canadian dairy sector.
The national strategy had been expected to be in place Feb. 1, but discussions are ongoing to modernize Canada's milk supply management system, said Jacques Lefebvre, president and CEO of the Dairy Processors Association of Canada.
Canada's two largest dairy processors are laying off 346 employees in Atlantic Canada.
Agropur Dairy Co-operative is cutting 62 full-time and 97 part-time workers in Nova Scotia, New Brunswick, and Newfoundland and Labrador, effective April 1.
Saputo Inc. is laying off 66 full-time and 121 part-time employees in Nova Scotia and Newfoundland.
Both companies say the workers stocked store shelves with their merchandise, and the change will bring their approach in line with how dairy processors handle orders and deliver their products to grocery stores elsewhere in Canada.
Generally, retailers have their own staff stock store shelves.
Neither Quebec-based company would say how much money would be saved by the change.
The head of OPEC said on Thursday that he remains "confident" that the cartel and outside members will stick to an agreement to cut production to help boost oil prices.
The comments by OPEC Secretary-General Mohammad Sanusi Barkindo of Nigeria come as the cartel and nonmembers try to stick to the landmark deal after oil prices collapsed last year.
OPEC agreed in late November to cut its production by 1.2 million barrels a day, the first reduction agreed to by the cartel since 2008. Nearly a dozen other countries pledged in December to cut an additional 558,000 barrels a day.
"I remain very confident with what I have seen in the last several months," Barkindo said at the Atlantic Council's Global Energy Forum in Abu Dhabi. "The level of commitment from both sides ... is unparalleled."
He added that there's been "a high level of compliance." However, how that compliance will be verified has yet to be determined.
Kuwaiti Oil Minister Essam al-Marzouq, who leads a five-nation OPEC committee monitoring compliance, said that should be judged on the average at the end of the six-month cut.
Al-Marzouq declined to offer any other specifics ahead of a planned committee meeting in Vienna beginning Jan. 21. However, Iraqi Oil Minister Jabar Ali al-Luaibi pledged his country would meet its required cuts by the end of January.
Crude oil sold for over $100 a barrel in the summer of 2014, before bottoming out below $30 a barrel in January 2016. Crude oil futures closed at $52.25 a barrel in New York on Wednesday.
Producers acknowledged they hoped for higher prices, especially those in the Persian Gulf, whose crude-based economies have been hurting. Also hurting are the oil-dominated economies of Venezuela and Nigeria.
Emirati Energy Minister Suhail al-Mazroui said there is "a fair movement" toward higher prices, though it isn't at a price his nation would like.
"The real correction will happen when we see the actions of all of those ... concerned nations who came together to try to help the market," he said.
The U.S. government is accusing Fiat Chrysler of failing to disclose software in some of its pickups and SUVs with diesel engines that allows them to emit more pollution than allowed under the Clean Air Act.
The Environmental Protection Agency said Thursday it had issued a "notice of violation" to the company that covers about 104,000 vehicles including the 2014 through 2016 Jeep Grand Cherokee and Ram pickups, all with 3-litre diesel engines. The California Air Resources Board took similar action.
"Failing to disclose software that affects emissions in a vehicle's engine is a serious violation of the law, which can result in harmful pollution in the air we breathe," said Cynthia Giles, EPA assistant administrator for enforcement and compliance.
Fiat Chrysler quickly issued a statement denying any wrongdoing.
EPA said it will continue to investigate the "nature and impact" of the eight software functions identified through its testing. Regulators were not yet defining the software as so-called "defeat devices" intended to cheat on government emissions tests. However, the agency said that numerous discussions with Fiat Chrysler over the last year had not produced any suitable explanation for why the company had failed to disclose the software, which regulators said caused the vehicles to emit less pollution during testing than during regular driving.
EPA officials said Fiat Chrysler may be liable for civil penalties for the alleged violations of the Clean Air Act. The EPA is investigating whether the auxiliary emission control devices constitute "defeat devices," which are illegal because they turn off pollution controls.
"This is a clear and serious violation of the Clean Air Act," Giles said. "When companies break the law, Americans depend on EPA to step in and enforce."
Fiat Chrysler said in a statement that its emissions control systems "meet the applicable requirements."
The company said it was disappointed with the EPA's action and intends to work with the incoming Trump administration to present its case. Fiat Chrysler said it spent months giving information to the EPA to explain its emissions technology and proposed a number of actions including software changes to address the agency's concerns.
Fiat Chrysler's shares fell more than 16 per cent after the news was announced to $9.29.
Ford is adding more than 816,000 vehicles in North America to the growing Takata air bag inflator recall.
The company says the latest callback covers the 2005-2009 and 2012 Mustang and the 2006-2009 and 2012 Ford Fusion, Lincoln Zephyr and Lincoln MKZ. Also included are the 2007-2009 Ford Ranger and Edge, the 2007-2009 Lincoln MKX, the 2006-2009 Mercury Milan and the 2005 and 2006 Ford GT.
All have front passenger air bag inflators made by Takata that can explode with too much force and spew metal shrapnel. At least 16 people have died worldwide from the problem and more than 180 have been hurt.
The recall is among the latest round of Takata recalls covering 5.7 million vehicles involving 17 automakers in the U.S. About 100 million inflators have been recalled worldwide.
Ford said it's not aware of any injuries involving this batch of vehicles.
The Takata recall is the largest automotive recall in U.S. history. It covers 69 million inflators and 42 million vehicles in the U.S.
Owners can go to https://www.nhtsa.gov/recalls and key in their 17-digit vehicle identification number to see if their vehicles are part of the recall.
Shaw Communications Inc. (TSX:SJR.B) saw its first-quarter profit cut to less than half what it was a year ago, hurt by the demise of Shomi — its video streaming joint venture with Rogers Communications (TSX:SJR.B).
The companies shut down Shomi late last year, two years after the video-on-demand service launched.
Shaw earned $89 million or 18 cents per share for the quarter ended Nov. 30 compared with a profit of $218 million or 43 cents per share a year ago.
The company says the wind-down of the Canadian cable companies' alternative to Netflix resulted in a $107-million provision in the quarter.
The three-month period also saw lower income as a result of its sale of Shaw Media to Corus Entertainment (TSX:CJR.B) last year.
Revenue was up 14.9 per cent to $1.31 billion from $1.14 billion — mostly because of the acquisition of Freedom Mobile — formerly called Wind — last year. Shaw's older business segments also gained revenue.
The maker of Canada's most iconic hat wants to reintroduce itself.
No longer content with solely being known as the purveyor of your grandfather's favourite wide-brimmed beige chapeau, the chief executive of Tilley Endurables says the company is undergoing a much-needed facelift.
This year, Tilley, which still manufactures all its products in Canada except for socks, plans on expanding its new winter toque and baseball cap lines globally.
CEO Andrew Prendergast says the company is proud its signature sailing hat is a top pick among Gulf War soldiers and British royalty but it's critical for it to get in favour with new, younger customers.
"It is impossible to go out and tell consumers you're cool or you're relevant," he said during a recent interview at Tilley's headquarters in Toronto. "You can't do it."
Legend has it the hat's material is so tough that it had been eaten by an elephant three times and survived its digestive tract only to be worn once again.
Prendergast says success will instead come by taking the authenticity and the innovation in the brand and getting it in the hands of more 35-year-old outdoor enthusiasts.
"They'll be able to see the quality, craftsmanship that goes into the product, the design elements that go into the product. We'll earn their trust by making the best."
In addition to baseball caps, Tilley's new styles include merino wool beanies, faux fur toques with interchangeable pompoms and newsboy caps, which are priced between $50 to $70. They've all been exclusively available in Canada in a limited supply since the fall.
Prendergast believes consumers will pay for the Tilley brand if they know they are getting a well-made, high quality hat that carries a lifetime warranty. Per the company's policy, customers who lose their hats within two years of purchase can have them replaced at a 50 per cent discount.
The company's launch of their line of baseball caps has been one of its most controversial moves, Prendergast says. Some long-time employees argued it couldn't be defined as a Tilley hat since it doesn't have a full brim, a factor the company addressed by offering the option of a cape for those who want the full coverage.
Tilley's products are currently sold online and in 7,000 stores in Canada, the U.S., the U.K., the European Union, Australia, Japan, Singapore and Taiwan.
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