Friday, May 22nd16.3°C

German business confidence drops slightly in May with increased worries over future

BERLIN - A closely watched survey shows German business confidence has slightly slipped as companies expressed satisfaction with their current situation but increasing worries about the future.

The Ifo Institute said Friday its Business Climate Index dipped to 108.5 points for May from 108.6 points the month before.

The survey of some 7,000 firms in manufacturing, construction, wholesaling and retailing showed a rise in their evaluation of their current situation to 114.3 points from 114.0 in April.

When asked about their expectations for the next six months, however, their evaluation dropped to 103.0 points from 103.4 the month before.

The Canadian Press


Saskatchewan wrestles with controversial issue of farmland ownership

CALGARY - Saskatchewan Agriculture Minister Lyle Stewart expects to catch an earful when the province's residents start to weigh in on who should and shouldn't be allowed to own farmland in Canada's breadbasket.

"There are strong opinions on both sides, and that's why we're doing this consultation," Stewart said in a telephone interview.

"We really want to know what people think and we're hopeful that a consensus will emerge from this."

The province announced public consultations Wednesday to gather public feedback on pension plans and foreign investors potentially buying farmland in the province.

The consultations come amid increasing concern that foreign buyers are circumventing laws that limit foreign ownership to just over four hectares.

Stewart says the Canada Pension Plan Investment Board's announcement in late 2013 that it will spend about $120 million to buy close to 46,540 hectares of land raised further controversy, since many thought pension plans had already been restricted from buying farmland.

Last month, the province temporarily expanded ownership restrictions to specifically exclude pension funds including the pension board from buying farmland and limit financings of farmland purchases to ones that go through a financial institution registered to do business in Canada.

Since its initial $120-million investment, the pension board has spent $33.7-million buying more farmland in Saskatchewan. The board says its intention has been to spend about $500 million buying Canadian farmland in over five years.

The worry is pension funds and other deep-pocketed investors could drive up land prices. That would make it even harder for younger people to take up farming, says Norm Hall, president of the Agricultural Producers Association of Saskatchewan.

"A lot of young guys that are raised on the farm want to farm," says Hall. "But the dollar amount to get in on the operation, even to buy their first quarter, getting that down payment is almost unmanageable."

Hall says opinions are mixed in the association about whether pensions should be able to buy land, though there is a fairly strong consensus that foreign ownership should continue to be restricted.

The Saskatchewan Chamber of Commerce has come out in support of foreign individuals and pension funds being allowed to buy land, but not companies or governments.

"We've had many discussion with the CPPIB folks, and the companies that they work with here," says Steve McLellan, CEO of the Saskatchewan Chamber of Commerce.

"We've had conversations with farmers, we've surveyed our members, and the consensus is clear — they're a good partner for Saskatchewan farmers, they're good landowners, they're good neighbours."

The pension board rents out the land it buys to farmers, which it says allows young farmers without much money to get into the business. Since the 1980s, roughly 35 to 40 per cent of farmland has been farmed under lease agreements, the board says.

Saskatchewan has one of the strictest farmland ownership laws in Canada at four hectares, while Alberta allows foreign entities to own twice that and Manitoba allows just over 16 hectares. Ontario and British Columbia have no foreign ownership restrictions.

Saskatchewan also has the lowest-priced farmland in the country, averaging $881 an acre, compared with $1,388 an acre for Manitoba and $1,934 an acre for Alberta, according to Statistics Canada.

The public consultations on farmland ownership continue until Aug. 10.

The Canadian Press

Wall shuffles cabinet; Kevin Doherty named new Saskatchewan finance minister

REGINA - Saskatchewan Premier Brad Wall says a small cabinet shuffle and the appointment of a new finance minister is in line with the government's economic plan.

"It's very much about continuity," he said Thursday.

Wall named Kevin Doherty to replace Ken Krawetz, who has said he will not run in the next provincial election expected in April 2016.

The premier also made cabinet veteran Don McMorris his new deputy premier, a title that Krawetz held.

"It's certainly big shoes to fill," said McMorris, who will continue in his role as minister responsible for Crown Investments Corporation, Saskatchewan Liquor and Gaming Authority and Saskatchewan Government Insurance.

Wall has appointed Krawetz the legislative secretary for Saskatchewan-Ukraine relations.

He credited Krawetz with helping to earn Saskatchewan triple-A credit ratings from two different firms.

"His leadership has held the government in good stead, especially when it comes to finances and we'll miss him," he said.

"We're never going to lose those triple-A ratings that we've earned because we want to make sure things are balanced in the province."

Wall said the economy is the most important issue facing Saskatchewan.

"The challenge in oil is there," he said. "There has been some job loss and dislocation so I wanted to make sure that we were moving forward in a steady way."

Oil revenue is down $661 million from last year's budget.

Scott Moe takes over from Doherty as minister of advanced education, while backbencher Herb Cox takes over for Moe as environment minister.

Cox said one of the environmental issues he will work on is the problem of aquatic invasive species such as quagga and zebra mussels.

"It's something that I'm passionate about," he said. "If those things get into our province then we are in big trouble. We have to keep them out."

The Canadian Press


HP sells stake in Chinese storage and server unit for $2.3B amid tech tensions

NEW YORK, N.Y. - Hewlett-Packard is selling a controlling stake in its China server and storage unit, a move that comes as the Chinese government, apparently worried about U.S. cyberspying, has encouraged the use of local companies.

HP said Thursday it will sell the 51 per cent stake in the business for about $2.3 billion to Tsinghua Holdings, part of state-owned Tsinghua University. The sale will create a partnership to be called H3C.

HP said the move will accelerate growth in the country.

"HP is making a bold move to win in today's China," said CEO Meg Whitman. "Partnering with Tsinghua, one of China's most respected institutions, the new H3C will be able to drive even greater innovation for China, in China."

Analysts have noted that the Chinese government has been increasingly restrictive about international tech companies amid growing concerns that the U.S. has been spying on China remotely. Although no official restrictions have been confirmed, some big companies in China have stopped using U.S. tech services from companies like Symantec and IBM over the past few years.

Cantor Fitzgerald analyst Brian White said in a note to clients that the partnership is a positive step for HP "in light of the growing backlash against U.S. IT companies selling into China that has further accelerated sharply in recent months."

HP will maintain ownership of its other businesses in China, including business services, software, HP Helion Cloud and other operations.

"We believe the deal (with Tsinghua) will help HP become more competitive in the China market given the recent Chinese government preference to purchase technology from local vendors," said Wells Fargo analyst Maynard Um in a research note.

Gartner analyst Neil MacDonald noted the tension goes both ways, with the House Intelligence Committee issuing a report in 2012 saying Chinese telecom equipment makers Huawei Technologies Inc. and ZTE Corp. are potential security threats that Americans should avoid doing business with.

"We've seen the increased fracturing of IT along geopolitical lines (in general)," he said. "This is one way to address the ownership concerns."

H3C will have about 8,000 staffers and $3.1 billion in annual revenue. HP says the change will allow it to better serve customers in China.

Hewlett Packard Co., which is based in Palo Alto, California, is undergoing a broader restructuring as it prepares to split into two companies by Oct. 31.

The deal with Tsinghau Holdings is expected to close by the end of the year.

HP shares rose 76 cents, or 2.3 per cent, to $33.83. The stock is down almost 16 per cent since the beginning of the year.

The Canadian Press

Gap's 1Q profit falls 8 per cent on currency rates, sluggish sales at Gap

NEW YORK, N.Y. - Gap Inc. reported an 8 per cent decline in its first-quarter profit, as results were hurt by currency fluctuations and persistent sluggish sales at its Gap and Banana Republic stores.

The San Francisco-based company, however, stuck with its annual profit outlook Thursday.

Gap is among the companies struggling with the impact of the strong dollar as sales in foreign currencies are worth less once they are translated back into the U.S dollars. As with many retailers, the chain has also been hurt by the West Coast port slowdown that delayed shipments of merchandise. But the retailer is also grappling with uneven performance of its brands. The company's Old Navy brand has been a bright spot, while it's trying to turn around weak business at Banana Republic and Gap.

Under the direction of Art Peck who took over the role of CEO in February, the company has made changes in its executive ranks and is trying to appeal to a consumer who is jumping back and forth from the store to a mobile device. The company is also overhauling its fashions to make them resonate with shoppers.

The latest results show that Peck faces challenges, particularly with its namesake brand, which has many times failed to keep up with the right trends of the season.

"I continue to be disappointed but not surprised by Gap's performance." Peck told investors on the conference call following the earnings release. "I believe we've diagnosed it correctly... and I can promise you that the team is all over it."

The retailer reported earnings of $239 million, or 56 cents per share, for the three-month period ended May 2. That is down from $260 million, or 58 cents per share, for the year-ago period. Revenue slipped 3.1 per cent to $3.66 billion.

Analysts expected earnings of 56 cents per share on revenue of $3.69 billion, according to Zacks Investment Research.

As reported earlier this month, revenue at stores open at least a year fell 4 per cent. That includes an 8 per cent drop at Banana Republic, a 10 per cent drop at Gap and a 3 per cent increase at lower-priced Old Navy.

"Old Navy's performance gives me confidence — the team has hit the right formula and they are consistently delivering a truly aspirational experience that's resonating with customers," said Peck in a statement.

Gap said that it continues to anticipate earnings per share to be $2.75 per share to $2.80 per share for the year. Analysts expect $2.78 per share, according to FactSet.

Shares slipped 11 cents to close at $38.56 before the earnings report. In after-hours trading, its shares slipped 12 cents to $38.44.


Follow Anne D'Innocenzio at

The Canadian Press

Canam wins large contract to supply steel and fabricate new Montreal bridge

MONTREAL - Canam Group says it has won the largest contract in the steel company's history after being selected to supply steel and fabricate the superstructure for Montreal's new Champlain bridge.

The Quebec-based company said the contract is expected to be finalized after the SNC-Lavalin consortium building the bridge signs a formal agreement with the federal government this summer.

The value of the contract wasn't disclosed Thursday but Canam said it will be larger than the $200 million deal it signed in November to build the NFL Atlanta Falcons stadium.

The contract announced before markets closed caused Canam's (TSX:CAM) stock to gain 48 cents or 3.44 per cent to $14.43 in trading on the Toronto Stock Exchange.

The new 3.4-km bridge spanning the St. Lawrence River is scheduled to open in 2018.

Canam CEO Marc Dutil has estimated that up to 45,000 tonnes of steel would be needed to complete the structure.

The bridge estimated to cost between $3 billion and $5 billion would have six lanes for cars, two lanes able to accommodate a light rail transit system and a pathway for pedestrians and cyclists.

Canam is North America's largest fabricator of steel components and has worked on several large bridge and stadium projects in Canada and the United States. It operates 22 plants throughout North America, four of which specialize in the fabrication of bridge components.

The Canadian Press

Most actively traded companies on the TSX

Some of the most active companies traded Thursday on the Toronto Stock Exchange:

Toronto Stock Exchange (15,203.61, up 130.78 points):

Pacific Rubiales Energy Corp. (TSX:PRE). Oil and gas. Up 10 cents, or 1.62 per cent, to $6.29 on 11.8 million shares.

Trevali Mining Corp. (TSX:TV). Miner. Down six cents, or 5.31 per cent, to $1.07 on 11.1 million shares.

Element Financial Corp. (TSX:EFN). Financial Services. Down 15 cents, or 0.84 per cent, to $17.73 on 7.6 million shares.

Legacy Oil + Gas Inc. (TSX:LEG). Oil and gas. Up 30 cents, or 11.15 per cent, to $2.99 on 6.7 million shares.

Bombardier Inc. (TSX:BBD.B). Aerospace, rail equipment. Down three cents, or 1.17 per cent, to $2.54 on 6.5 million shares.

First Quantum Minerals Ltd. (TSX:FM). Miner. Down 99 cents, or 5.74 per cent, to $16.26 on 5.1 million shares.

Companies reporting major news:

Husky Energy (TSX:HSE). Oil and gas. Up 41 cents, or 1.67 per cent, to $24.98 on 520,009 shares. The Calgary-based company says that its Rush Lake heavy oil project in Saskatchewan has begun commercial operations eight weeks ahead of schedule. The project is designed to produce up to 10,000 barrels per day using a steam-assisted process to extract the heavy oil, once it has ramped up to full capacity.


The Canadian Press

Federal agriculture minister says CFIA will get to bottom of mad cow case

CALGARY - Federal Agriculture Minister Gerry Ritz says investigators are narrowing down how an Alberta cow was infected with BSE.

The beef breeding cow was discovered last winter on a farm near Edmonton and was born on a nearby farm.

Another cow born at the same location in 2004 tested positive for mad cow disease in 2010.

A final report by the Canadian Food Inspection Agency is expected this summer.

Ritz says investigators are looking for other animals that also might have been infected and any feed supplies that might be the cause.

He said it's like looking for a needle in a haystack.

"It's searching out the cohort animals, any feed supplies that might have moved to any other farms or anything like that," Ritz said Thursday at an event in Calgary.

"That's the minute needle in several haystacks that takes months to accomplish. CFIA has done this before and they'll probably do it again."

The majority of Canada's trading partners don't seem too worried about the two cases of bovine spongiform encephalopathy.

"We didn't see a hiccup at all from Japan ... or China and those are phenomenal gains that we've seen as they recognize the science and the safety of our food supply."

An outbreak of BSE in 2003 cost the cattle industry billions of dollars in lost revenue when countries around the world shut the door to Canadian beef.

Follow @BillGraveland on Twitter

The Canadian Press

Mike Babcock's big-money deal with Maple Leafs good news for fellow NHL coaches

Mike Babcock's coaching contract with the Toronto Maple Leafs has suddenly and dramatically altered the financial outlook for his NHL counterparts.

Babcock's eight-year deal worth US$50 million not only makes him the highest-paid coach in the NHL, but sets an unprecedented ceiling for coaches' salaries in the league.

It's a rising tide that floats all boats for his brethren.

"I'm sure he got lots of thank-you notes from his peers," player agent J.P. Barry told The Canadian Press on Thursday when the Leafs held a news conference to introduce Babcock.

"I think it absolutely changes the landscape for NHL coaches. I'd have to say it's completely shifted."

With an average of $6.25 million per year, Babcock's deal moves the needle on pay that was low compared to coaches in other North American pro sports, and salaries less than many NHL players.

A article two years ago pegged the annual average salary of an NFL head coach at $7 million. Los Angeles Clippers coach Doc Rivers was in that range until he signed an extension in 2014 worth a reported $10 million annually.

"There is no question a new bar has been set for the salary of a top head coach in the NHL," agent Allan Walsh said in an email. "A new arms race among head coaches has commenced. The starting gun has gone off."

Babcock indicated to reporters in Toronto that he did homework on coaches' pay in other leagues to prepare for the negotiating table, but he didn't even have to make that case in the end.

"I did a lot of planning to prepare to do that," the new Leafs coach said. "I never used any of my material."

Babcock's unique situation created the new money benchmark.

A man considered in the top percentile of the league's 30 head coaches put himself on the open market at the same time teams under heavy pressure to improve quickly — Toronto, Buffalo and San Jose — had vacancies.

Given the job insecurity of an NHL head coach, not many are willing to test the open market.

"Historically in the industry, coaches and general managers sit down to negotiate an extension a year before the contract is over," said Francois Giguere, who negotiated a multi-year extension for Calgary Flames head coach Bob Hartley in December.

"My experience has been that getting that security is important for coaches. My feeling is that you will not see more of a free-agent scenario."

Giguere does believe, however, that Babcock's financial terms put upward pressure on coaches' salaries.

"When you look at what coaches in other professional sports make when you compare to coaches in the NHL, the coaches in the NHL are making less," he said from Denver.

"I think there is going to be some type of correction. How much of a correction? That's the big unknown."

Babcock's resume stands out in a small sample size, given there are only 30 head coaches. The Detroit Red Wings made the playoffs every year in the decade he was behind the bench and won the Stanley Cup in 2008.

He coached Canada to Olympic gold medals in both 2010 and 2014. He's the only coach to win Olympic gold, the Stanley Cup and a world championship.

With 750 career wins and a pair of Stanley Cups, Chicago's Joel Quenneville has coaching status comparable to Babcock's. The Blackhawks coach is paid a reported base salary of $2.75 million on a contract that has two years remaining on it.

"We'll see how that all plays out," Quenneville said Thursday in Chicago.

The Edmonton Oilers named head coach Todd McLellan their new head coach Tuesday with Sportsnet reporting his annual base salary at $3 million.

Owners who pay coaches' salaries and general managers who negotiate the contracts in the other NHL markets might not appreciate the fanfare around Babcock's deal.

Few markets have the deep pockets of Maple Leaf Sports & Entertainment. Coaches' salaries don't count against the salary cap.

"It's one of the sole areas a big-market team or a team with an owner willing to commit financial resources to a head coach, can do so to a competitive advantage in the salary-cap era," Walsh said.

— With files from Canadian Press sports reporter Dan Ralph.


Follow @DLSpencer10 on Twitter

The Canadian Press

COOL retaliation threat against U.S. real, but Ritz hopeful it won't be needed

CALGARY - Federal Agriculture Minister Gerry Ritz says it's time for the United States to come to terms with country-of-origin labelling rules.

The World Trade Organization ruled Monday that the U.S. labelling requirement, known as COOL, violates that country's trade obligations.

Canada will probably be able to impose retaliatory tariffs against the United States by late summer or early fall if Washington doesn't repeal its COOL rules.

Ritz says Canada is now "driving the bus" in the dispute and holds the threat of tariffs on roughly 38 different commodities as a Plan B.

He suggests the U.S. needs to find the fix that makes Canada happy.

The minister says Canada will not go after the United States for damages on behalf of beef and pork producers if the labelling law is repealed.

The Canadian Press

Chrysler latest air-bag lawsuit target; proposed action claims negligence

TORONTO - The latest in a series of proposed Canadian class-action suits over potentially deadly airbags was launched Thursday, this one over those installed in Chrysler vehicles.

The lawsuits claim Japan-based Takata Corp. and its U.S. subsidiary negligently designed and manufactured "life-threatening and dangerous" bag inflators that were installed in millions of vehicles.

In the latest statement of claim filed with Ontario Superior Court, the plaintiff alleges more than 36-million vehicles worldwide containing Takata-made airbags have been recalled. The suit alleges the company knew about the problem for more than a decade but failed to provide timely warnings.

"Our clients and the vehicle owners deserve an answer as to why it took so long for Takata and these manufacturers took so long to issue these recalls and why these defendants exposed these vehicle owners to a risk to their well being, their lives and safety for so long," lawyer Alex Constantin said in an interview from Windsor, Ont.

Chrysler Canada, which reported a voluntary recall of more than 258,000 vehicles in January, refused a request for comment.

None of the claims has been certified as a class action or proven in any court.

Airbags are designed to inflate at high speed in the event of a crash, cushioning the occupants of a vehicle. The defective devices, however, can propel shrapnel into the vehicle, maiming or killing the driver, according to the suit.

The faulty design stems from a decision by Takata executives in 1999 to come up with a cheaper propellant for use in their airbags. The company began using ammonium nitrate despite knowing it to be a "risky compound," according to the claim.

"Multiple deaths and dozens of injuries have been linked to over-explosive airbag-inflator propellant causing metal components within the device to break and project through the airbag cushion material at vehicle occupants," the claim states.

Takata's CEO has acknowledged the problem and apologized, according to the filing.

The lead plaintiff, Gary Coles, of Tecumseh, Ont., bought a Chrysler 300 in 2006. In March, he contacted Chrysler Canada to find out if the vehicle contained a Takata airbag requiring replacement and the company confirmed it did.

"To the date of the filing of this claim, he has not received an official recall notice from the Chrysler defendants," the statement asserts.

Constantin said his law firm launched its first action last fall and has added further ones as the scope of the problem became evident and may start new actions or amend the existing suits as more information emerges.

Previous suits targeted other large vehicle makers such as Toyota, Honda, Nissan, BMW and Ford.

In December, Takata rejected American regulator demand for a nationwide recall, saying there was "not enough scientific evidence" to justify one.

This week, however, the company agreed to declare 34 million airbags in the U.S. defective, triggering the largest auto recall in history.

The Canadian Press

Shopify shares soar

TORONTO - Investors flocked to Shopify Inc.'s stock market debut on Thursday, sending the company's shares soaring.

The Ottawa-based e-commerce company's IPO at US$17 per share raised US$131 million, more than the company expected.

Shopify (TSX:SH) offered its shares on both the TSX and the New York Stock Exchanges in a dual IPO. Its shares opened in New York at US$28 and reached a high of US$28.74 before closing at US$25.68.

The stock closed at C$31.25 on the Toronto Stock Exchange after trading for as much as C$35.03.

The company allows anyone to sell products via the Internet. It helps small and medium-sized business with cloud-based software to design, build, and manage sales across the web, mobile applications, and brick-and-mortar stores.

Ben Dickie, senior analyst with InfoTech Research Group, said the company was attractive for investors because of its presence in the "hot space" of mobile payments.

It's common for tech stocks to start with a high valuation and retreat as investors get a better picture of demand, Dickie said.

"After that initial enthusiasm around a stock, usually there is a correction as the day is happening," he said. "I don't see that necessarily as worrying or indicative of larger problems with the stock at this point."

Unlike other tech companies that have listed on the stock market such as Facebook Inc., he said, Shopify has a clear business model and an obvious potential for revenue growth.

"They are actually selling the software, they're not reliant on some more nebulous business model," he said. "The fact that Shopify has a compelling value proposition bodes well for their financial performance."

Shopify's 165,000 customers include automaker Tesla Motors, the NBA's Los Angeles Lakers, and hip-hop collective Wu-Tang Clan, as well as online entertainers such as YouTube show Epic Meal Time and online comic strips Penny Arcade and the Oatmeal.

Shopify serves merchants from more than 150 countries, with 60 per cent of its client base in the United States.

The company grew from the modest ambitions of three Ottawa men looking to sell snowboarding equipment online. The platform they built turned into Shopify, which began offering its services to other businesses in 2006.

Shopify now has more than 500 employees across offices in Ottawa, Toronto, and Montreal, including the new 102,000 square-foot headquarters it opened in downtown Ottawa in 2014.

Regulatory filings show that Shopify lost US$22.3 million last year compared to US$4.8 million in 2013. Its revenue more than doubled to US$105 million.

The company said it handled US$3.8 billion in transactions in 2014.

The Canadian Press

Lower federal debt payments should bring even more tax relief: finance minister

OTTAWA - Canada's finance minister says if re-elected this fall the Harper government would continue cutting taxes with help from shrinking payments as the country eats away at the federal debt.

Joe Oliver also says last fall's oil-price plunge chewed $6- or $7-billion off the federal government's bottom line.

Speaking at a Bloomberg conference in Toronto, Oliver says the oil slump prevented the government from providing more benefits to Canadians in last month's budget — including additional tax relief.

But he predicts the country will have more flexibility as the economy grows in the coming years.

Oliver also says the government has a "never-ending task" to keep taxes low and insists he will keep driving down taxes for both small and large companies.

Shortly before oil prices started their steep slide last fall, the Conservative government announced a five-year, $27-billion tax-and-benefit package aimed at families.

The Canadian Press

CPP Investment Board to shift bigger share of assets to emerging markets: CEO

TORONTO - The Canada Pension Plan Investment Board sees the United States as a key destination for investments in the near term, but expects to shift a bigger share of its assets to faster-growing emerging economies over time.

Emerging markets equities account for about 5.9 per cent of the assets managed by the CPP Investment Board, but chief executive Mark Wiseman said Thursday the fund is building its capabilities in markets like India, China and Latin America in a "slow and prudent progression."

"We believe they will undoubtedly have ups and downs, but in the long run those economies will produce disproportionately higher growth than the developed economies of Europe and North America," Wiseman said.

The CPP Fund reported Thursday a return of 18.3 per cent for its latest financial year, its best showing ever.

Compared with the end of fiscal 2014, the fund's assets were up $45.5 billion from the end of fiscal 2014 — the biggest one-year gain since the fund received its first money for investments in March 1999.

In the medium term, Wiseman said there are "excellent prospects" in the United States, which is home to about $100.7 billion or 38 per cent of the fund's assets — the largest of any country.

"We see more investment opportunities there than in other developed world markets," Wiseman said.

As for Canada, which represented about 24.1 per cent of the fund's assets as of March 31, Wiseman said the CPPIB continues to have a positive view despite the impact of the recent oil price shock.

He said lower energy prices, the decline in the loonie's value against the U.S. dollar, and "solid growth" in the United States — Canada's biggest market — should help the overall economy.

"So, by and large, we remain optimistic about Canada as well as the U.S," Wiseman said.

The CPP Investment Board says there were multiple reasons for the strong investment performance last year, including growth at all major stock markets, bonds, private assets and real estate holdings.

Only $4.9 billion of last year's increase came from employer and employee contributions while $40.6 billion came from investments. None of the fund's assets were required to pay benefits to current retirees, with contributions expected to carry the load until the end of 2022.

The value of its investments also got a $7.8-billion boost in fiscal 2015 from a decline in the Canadian dollar against certain currencies, including the U.S. dollar and U.K. pound.

The fund's 10-year inflation-adjusted rate of return was 6.2 per cent — well above the 4.0 per cent that Canada's chief actuary estimates is necessary.

— Follow @DavidPaddon on Twitter.

The Canadian Press

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