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Tories introduce family tax legislation, including income-splitting measure

OTTAWA - The Conservative government has introduced legislation to enact its family tax-and-benefit package — a multibillion-dollar suite of measures that includes the controversial income-splitting plan.

The so-called "family tax cut" is worth as much as $2,000 a year to eligible families with kids under 18 — but several studies have found only small fraction of households can benefit from it.

The government's bundle of family-friendly measures also contains a bolstered universal child care benefit and higher limits on the existing child-care expense deduction.

These enhancements mean monthly government cheques will start arriving at the homes of qualifying families in July — three months before Canadians are scheduled to go to the polls.

Critics have called the income-splitting plan unfair, while opposition parties have promised to scrap it if they win the election.

When specifically asked about income splitting, the Conservatives typically avoid discussing it. They point out that the overall plan will provide benefits for all families with kids.

Income splitting, projected to reduce federal revenues by about $2 billion per year, was a key 2011 Conservative election promise and was contingent on a balanced budget.

The new legislation will formally "implement" income splitting, even though taxpayers can benefit from the measure when they file their 2014 income taxes.

It allows eligible taxpayers to transfer as much as $50,000 of income to his or her spouse in a lower tax bracket in order to collect a non-refundable tax credit of up to $2,000 per year.

A recent report by the parliamentary budget office found income splitting will encourage a small number of Canadians — particularly women — to work less or stay out of the labour force altogether.

The federal budget watchdog's study also found what earlier research has shown — that only 15 per cent of households can benefit and higher-income earners will take home the biggest gains.

Taken together, the family tax package announced by the government last fall is projected to reduce federal revenues by more than $4.6 billion in each of the next five years.

Follow @AndyBlatchford on Twitter

The Canadian Press


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Bombardier CEO says embattled company not open to 'fire sale' of assets

MONTREAL - Bombardier's new CEO says the company has enough financial flexibility to complete its development projects including the CSeries commercial jet without selling assets at "fire sale" prices.

Alain Bellemare said the aircraft and railway manufacturer doesn't feel pressure to act hastily now that it has raised $935 million from issuing new shares and US$2.25 billion in new debt.

After winning shareholder support Friday for the financing, he said the company is examining all its "strategic options."

That includes joint ventures as part of consolidation in the railway sector and potential asset sales.

Bellemare told reporters that there are no "sacred cows" that must be preserved as it make decisions that will affect the company's long-term future.

Industry analysts have suggested Bombardier could sell its Learjet business aircraft operations for as mush as US$750 million. Bombardier stopped work earlier this year on its Learjet 85 as it looked to preserve cash.

Meanwhile, he said the company continues to hope for certification of the new CSeries this year with deliveries beginning in early 2016. A slight delay in the entry into service was first mentioned last month as the larger CS300 aircraft had its first flight.

An early 2016 entry into service is not significant for an aircraft that will be in service for 30 years if it delivers the promised performance including operating cost savings, Bellemare added.

The Canadian Press


US consumer sentiment fell in March on bad weather, rising gasoline prices

WASHINGTON - Bad weather and rising gasoline prices pushed U.S. consumer sentiment a bit lower in March.

The University of Michigan's consumer sentiment index slipped to 93 this month from 95.4 in February. Richard Curtin, chief economist for the survey, notes that consumer optimism was the highest in a decade for the first three months of 2015 despite the dip in March.

Sentiment shot up to an 11-year high in January, then retreated modestly in February and March. One reason for the pullback: Gasoline prices have been ticking back after a sharp drop in the second half of 2014. Gasoline costs an average $2.43 a gallon, up from low of $2.03 a gallon in late January; but prices at the pump are still down from $3.54 a year ago, according to AAA.

The March drop in confidence was caused entirely by falling confidence among low-income households, which are especially sensitive to high utility bills in the winter. Confidence rose for mid- and high-income households. Another gauge of consumers' spirits, the Conference Board's confidence index, slipped slightly in February but remained near the highest levels since before the Great Recession.

Michigan's Curtin predicted that an improving job market would boost consumer spending the rest of the year.

The Commerce Department reported Friday that consumer spending rose at a 4.4 per cent annual rate from October through December, the fastest pace since the start of 2006. Overall, the U.S. economy grew at a 2.2 per cent pace the last three months of 2014, down from 5 per cent from July through September.

The Canadian Press




Ski-Doo maker BRP sees Russian sales falling in half over the coming year

MONTREAL - The company that makes Ski-Doo snowmobiles and other recreational equipment anticipates sales in Russia will drop by another 50 per cent in the coming year due to a weakened ruble and economic conditions.

Although Russian consumers rushed out to buy luxury goods late in the year as the ruble nose-dived, BRP Inc. (TSX:DOO) said Russian revenues were down 25 per cent last year. Excluding Eastern Europe, international revenues increased eight per cent.

"We are planning for reduced snowmobile volume in North America and a further volume decline in Russia as our distributor was impacted by weak snowfall and continues to be impacted by the overall economic condition," CEO Jose Boisjoli said Friday during a conference call.

The ongoing weakness in its largest market outside North America contributed to BRP issuing an outlook for fiscal 2016 that disappointed analysts.

The company said expects its normalized earnings could slip by as much as nine per cent from the $1.65 per share earned last year and range between $1.50 to $1.65 per cent. That was below the $1.73 per share forecast by analysts. Overall revenues are forecast to increase by five to nine per cent compared with 10 per cent growth last year.

The outlook came as the Quebec-based company said Friday it swung to a profit of $8.5 million or seven cents per share in the fourth quarter from loss of $6.2 million or five cents per share a year ago. Revenue for the three months ended Jan. 31 grew to $1.07 billion from $902.9 million a year earlier, helped by growth in North America.

Excluding financing costs, income taxes and other items, its normalized net income surged to $116.5 million or 98 cents per diluted share. That compared to $48.3 million or 41 cents per share a year earlier.

BRP was expected to earn 79 cents per share in adjusted profits on $1.02 billion of revenues, according to analysts polled by Thomson Reuters.

Analyst Benoit Poirier of Desjardins Capital Markets was optimistic about BRP's future even though the weaker guidance offset the strong fourth-quarter results.

"We believe the ramp-up of the Mexican facilities and the recent introduction of compelling products...places BRP in a good spot to continue gaining market share in fiscal year 2016 and beyond," he wrote in a report.

BRP is building a second production facility in Mexico that will begin production of traditional watercraft in the fourth quarter of the current fiscal year.

For the full year, the company earned $70.2 million or 59 cents per share, up from $59.9 million or 53 cents per share a year ago. Revenue grew 10 per cent to $3.5 billion from $3.19 billion as a 14 per cent increase in North America offset a weaker performance in Eastern Europe.

The Canadian Press


NDP would take from corporate executives, give to working poor, kids

OTTAWA - Tom Mulcair issued a rallying cry to progressive voters Friday as he unveiled a proposal aimed at taking tax benefits from the rich and transferring them to the poor.

The NDP leader promised that a New Democrat government would scrap the employee stock options deduction, a benefit enjoyed primarily by corporate executives that's worth more than $700 million each year.

That money would be redirected to low-income families by enhancing the working income tax benefit and the national child benefit supplement.

"This will be a dollar-for-dollar transfer in benefits from those who need it the least to those who need it the most," Mulcair told some 800 participants at the annual progress summit organized by the Broadbent Institute, a social democratic think-tank.

Mulcair cast the proposal as a "substantial measure" to reduce the gap between rich and poor Canadians and "a major step forward to take millions of Canadians, particularly children, out of poverty and into the middle class."

"The tremendous wealth that is being generated in this country today is landing into fewer and fewer hands," he said, calling the income gap "fundamentally un-Canadian."

"And those at the very top end are enjoying tax benefits that the majority just don't have access to."

More than 25 years ago, Mulcair noted that Parliament unanimously endorsed a motion by then NDP leader Ed Broadbent to eradicate child poverty by the year 2000. Yet, under Liberal and Conservative governments, he said the problem has only worsened.

Unlike the other main parties, Mulcair said an NDP government would actually take action to get the job done.

He took the opportunity to call on all progressive Canadians to unite behind the NDP, which has been stubbornly stalled in third place behind the Liberals and Conservatives in opinion polls over the past two years.

"We have never been as close as we are today to building the Canada of our dreams," Mulcair said, noting that a federal election is scheduled for October.

"But I need your help. I'm calling on each and every progressive Canadian to join me in this great endeavour."

The Canadian Press


BlackBerry back in black

BlackBerry Ltd. squeezed out a small profit in the fourth quarter, giving analysts a welcome surprise, even though overall revenues were still well short of their expectations.

The struggling technology company, which reports in U.S. dollars, earned US$28 million or five cents per share in the quarter compared with a loss of $423 million or 80 cents per share a year earlier.

Adjusted earnings were US$20 million, or four cents a share, beating analyst estimates of a loss of four cents per share.

The results were less impressive when it came to BlackBerry's revenue, which includes sales of its phones and software services. Overall revenue dropped 32 per cent from a year ago to $660 million, significantly lower than analyst expectations for $786 million.

The pressure came from several directions, as device sales continued to stumble and BlackBerry accounted for a US$12-million hit from currency fluctuations.

On the upside, the company shovelled another $608 million of cash into its reserves, bringing the total to $3.27 billion at the quarter's end.

Shares of BlackBerry were up 54 cents at $12.14 in trading on the Toronto Stock Exchange on Friday morning.

BlackBerry has been struggling as its smartphones have failed to connect with the consumer market while its once thriving business software and security business has faced an onslaught of competition.

John Chen was brought in as CEO just over a year ago with the main goal of making BlackBerry profitable again. He began a widespread effort to reduce costs, and reshape BlackBerry's business model.

Cost management was a major focus of the quarter, which ended Feb. 28, as BlackBerry pulled back expenses another 22 per cent to $424 million compared to the third quarter.

However, the popularity of BlackBerry phones is still fading across most regions.

In the fourth quarter alone, sales of BlackBerrys dropped 38 per cent in North America, 23 per cent in Europe, the Middle East and Africa and 29 per cent. The Asia-Pacific region, where BlackBerry continues to enjoy a stronger popularity in some countries, sales dropped a lesser 14 per cent.

About 1.6 million BlackBerrys were sold to customers in the quarter, a figure that includes its Classic model, a throwback to its popular older smartphones with an updated design.

The phone launched in Canada and some other countries last December, but the rollout was staggered across other regions like the United States and Europe, which means revenue recognition has been spread out.

The factor added extra weight to already struggling device sales, which have been on a steady decline. In the third quarter, which ended in November, BlackBerry booked revenue on about 1.9 million devices, while in the second quarter about 2.1 million phones sold to consumers.

Chen told analysts on a conference call that even though phone sales are weaker, the latest devices have higher margins than their predecessors.

"We do expect the devices to become increasingly profitable as we move into the second half of the year," he said.

"In order to minimize exposure we have been successful in managing inventory to closely match the demand."

Software revenues are becoming a stronger area of growth, with sales rising 20 per cent to $67 million over a year earlier. However, software only makes up 10 per cent of overall revenue, while the hardware business represents 42 per cent. Service fees deliver most of the rest.

Chen has stated in recent months he wants BlackBerry to generate US$500 million of software revenues in the company's new financial year, which began this month.

He told analysts that BlackBerry's turnaround plan is still in progress.

"I'd like to remind everybody that we're only halfway through," he said.

"Our focus now is turning to stabilizing revenue and I'm mindful that transitions like this are never easy and never just quite smooth."

The Canadian Press


Ottawa runs $1.3B surplus

The federal government posted a narrow surplus over the first 10 months of the current fiscal year, suggesting Ottawa could balance the books earlier than expected.

Ottawa ran a $1.3-billion budgetary surplus through the first 10 months of 2014-15, with the help of a $2.2-billion surplus in January, according to the Finance Department's latest fiscal monitor.

A stronger, year-end financial position would clash with the government, which has told Canadians they will have to wait until 2015-16 before the federal books move into the black.

In his November fiscal update, Finance Minister Joe Oliver projected a $2.9-billion shortfall by the end of the 2014-15 fiscal year, which ends March 31.

Oliver has repeatedly pledged to balance the books in his upcoming 2015-16 election-year, spending plan, which is expected next month.

The government took the unusual step of postponing the release of the spring budget, which is typically presented in February, so it could assess the economic fallout of the oil slump.

In November, the government projected a $1.6-billion surplus for 2015-16, but crude prices have fallen even further since then.

The fiscal monitor, released Friday, said the government's $1.3-billion surplus so far in 2014-15 compared with a $10-billion deficit posted over the same April-to-January period in 2013-14.

The document says increases in most revenue streams over the first 10 months of 2014-15 pushed total government income up by $7.7 billion or 3.6 per cent.

Over the same time span, it says total program expenses fell $2.8 billion or 1.4 per cent.

Ottawa's $2.21-billion surplus for January compared with a surplus of nearly $2.22 billion in January 2014.

The Canadian Press


TSX and dollar lower

The Toronto market was lower Friday morning as the prices for gold, oil and the Canadian dollar also slipped.

The S&P/TSX composite index was down 65.55 points at 14,804.25 in late morning trade, adding to its losses Thursday.

The loonie weakened, falling by 0.34 of a U.S. cent to 79.85 cents.

The May crude oil contract was down $1.41 at US$50.02 a barrel and the April gold bullion contract dropped $7.80 to US$1,197.00 an ounce.

In the U.S., markets were positive. The Dow Jones industrial average reversed earlier losses and was up 36.47 points at 17,714.70. The Nasdaq strengthened to 22.86 points to 4,886.22 and the S&P 500 advanced 5.56 point to 2,061.71.

Meanwhile, shares of BlackBerry were up nearly three per cent after the smartphone maker reported a small profit in its latest quarter. The company earned US$28 million or five cents per share in the quarter compared with a loss of $423 million or 80 cents per share a year earlier.

The Canadian Press


The Latest: German police seize material from Germanwings co-pilot's home

9:15 a.m. (0815 GMT, 4:15 a.m.)

German police have searched the home of co-pilot Andreas Lubitz in Duesseldorf and seized material that will now be examined as part of the investigation into the crash that killed 150 people in the French Alps.

French investigators believe Lubitz locked himself inside the cockpit and then intentionally smashed the Germanwings plane into a mountainside.

A spokeswoman for Duesseldorf police denied reports Friday that the officers had made any significant discovery yet.

"No crucial piece of evidence has been found yet," Susanna Heusgen told The Associated Press.

Duesseldorf prosecutors say they plan to release an update on their investigation around noon (1100 GMT, 7 a.m. EDT).

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7 a.m. (0600 GMT, 2 a.m. EDT)

The co-pilot who authorities believe intentionally crashed an airplane into the French Alps, killing all 150 people on board, likely first honed his flying skills for months in Arizona.

Lufthansa Group, which owns Germanwings airline, said Thursday that 27-year-old Andreas Lubitz trained in Bremen, Germany, and Phoenix starting in 2008.

A Facebook page bearing his name lists Phoenix Goodyear Airport among his interests. The airport houses Airline Training Center Arizona, a Lufthansa-owned training facility.

Aviation experts say students there log flight hours and attend classes on navigation in an 18-month period. On Thursday, German and Lufthansa flags outside the facility were flying at half-staff.

Sunshine and vast air space have historically made Arizona a popular location for pilot training.

French prosecutors say Lubitz locked his co-pilot out of the cockpit of Germanwings Flight 9525 on Tuesday before the jet slammed into the mountainside.

The Canadian Press


New exchange set to launch

A new stock exchange aimed at deterring high-frequency trading strategies will launch and celebrate its first trade today.

Royal Bank (TSX:RY) is among the supporters of the new Aequitas Neo Exchange, along with U.K.-based Barclays banking group, Canadian pension fund PSP Investments, telecom BCE Inc. (TSX:BCE) and several brokerages.

Named Aequitas after the Latin word for equality and fairness, the new exchange hopes to rival the Toronto Stock Exchange and other markets owned by the TMX Group (TSX:X), which cater to high-volume traders in order to generate revenue.

Aequitas has said it plans to use high fees and a time delay to deter high-frequency trading (HFT) strategies, which have been criticized for leaving traditional investors at a disadvantage.

These practices have been blamed for inserting artificial volatility into the markets by using superfast computers to engage in activities such as exploratory trading, or making small orders to see if there is interest in a stock.

The computers can also engage in up to 5,000 trades per minute, clogging bandwidth and delaying trades by ordinary investors.

The Canadian Press


Woman whose recording led to sale of LA Clippers testifies of love for ex-owner, hate for wife

LOS ANGELES, Calif. - The woman whose recording of Donald Sterling cost him the Los Angeles Clippers was forced Thursday to answer questions about recordings in which she and the billionaire discussed how to hide a house he bought her.

Several of the 500 recordings V. Stiviano made during a nearly four-year relationship with Sterling were played in Los Angeles Superior Court in his wife's lawsuit to reclaim millions of dollars he lavished on the younger woman.

Donald Sterling foresaw the trouble the gifts posed for Stiviano, pointing out in one recording that they were community property — owned jointly by him and his wife of nearly 60 years. That is the basis for her lawsuit.

"You just can't give somebody a gift," he said in one recording. He then laughed and added, "Well, if they don't know about it."

"Do you think I can hide the house?" Stiviano asked.

After two days of testimony attempting to show that Sterling paid the full $1.8 million price for the Spanish-style duplex, there's little to hide.

The question is whether a judge will make Stiviano relinquish the home, three luxury cars, including a Ferrari, and millions of dollars in cash, jewelry and clothing that an accountant valued conservatively at $3.6 million.

Her lawyer says most of the funds can't be connected directly from Sterling to Stiviano and that the law doesn't allow a spouse to go after a third party. Lawyers on both sides said there's no precedent for such a case.

Judge Richard Fruin Jr. cast doubt on Shelly Sterling's case Thursday, saying there's no clear documentation that funds went from the Sterling family's real estate company to Stiviano's bank accounts.

Stiviano denied that some of the 18 bank accounts where checks were deposited even belonged to her. When asked if it was mere coincidence that identical amounts left Sterling's company and then showed up in accounts used to purchase the home, Stiviano pleaded ignorant and said she hadn't signed the checks.

"Life is full of coincidence, sir," she told Sterling attorney Pierce O'Donnell.

The trial has provided a backstory of sorts to the saga that played out last year when the recording of Donald Sterling telling Stiviano not to publicly associate with blacks culminated with his lifetime ban from the NBA and the record $2 billion sale of the team.

Stiviano said she loved Sterling and referred to him as her "hubby"and significant other, but said they never were romantic despite sharing a room on trips to Dubai, Paris and Las Vegas.

Shown several photos of her nuzzling the 80-year-old and asked if she was kissing him, she said: "I don't know if you call duck lips or pucker lips kissing."

Stiviano, 32, smiled broadly at times and was sassy at others, getting laughs from the gallery as she corrected O'Donnell's pronunciation of designer Louis Vuitton.

When asked if she hated Shelly Sterling, she didn't hold back.

"She is a bully," she said. "That's exactly what I thought she was — the evil witch of the west."

Shelly Sterling looked back at friends in the gallery at points in the testimony and smiled.

Stiviano admitted that Donald Sterling had bought her cars, gave her $100,000 to invest in stocks and helped her buy her house with at least $727,000.

But she couldn't identify how much of the remaining $1 million he contributed. She said some came from friends and relatives who gave her small bills she squirreled away in a bedroom drawer.

Accountant Jay Shapiro testified that he had traced funds from Sterling and found it unbelievable Stiviano's drawer could have made a significant contribution.

"It would be an awful big drawer," Shapiro said. "I find the entire story incredulous."

The Canadian Press


Alberta government increases taxes, but still plans to run record deficit

EDMONTON - Albertans will pay more to get married, go camping, have a drink, go for a drive or do pretty much anything else as the province fights to get out from under the collapse in oil prices.

The 2015-16 budget tabled Thursday increases taxes and fees virtually across the board and runs the largest deficit in Alberta's history at $5 billion.

The government is retooling its tax take so the wealthy will pay more. It's also bringing in a health-care levy, boosting the gasoline tax by four cents a litre and increasing sin taxes on cigarettes and booze.

"This has been one of the hardest budgets to develop in many years and has required tough decisions," Finance Minister Robin Campbell told reporters.

"We're going to get off of oil."

Premier Jim Prentice has billed the document as necessary to make up for billions in lost oil revenue and to insulate the province's day-to-day spending from roller-coaster swings in energy prices.

The premier has also said he needs a mandate to implement the budget and is expected to call an election soon.

The budget details $1.5 billion in hikes and new levies and outlines a new tax model.

Albertans will no longer be charged a 10 per cent flat tax. Everyone will still pay that much on the first $100,000 of taxable income, but there will be two tax brackets for anyone earning more than that.

There will be a new refundable tax credit and improvements to rules to aid lower-income working families.

Fuel taxes will go up to a total of 13 cents a litre Friday — still the lowest in Canada.

Traffic fines will rise by an average of 35 per cent. Other increases will hit registration fees, court and land-title searches, marriage certificates and camping costs.

Alcohol taxes are going up by 16 cents for a bottle of wine and 90 cents for a 12-pack of beers. Tax on a carton of cigarettes will jump to $45 a carton from $40.

A levy will be added to provincial income tax starting July 1 to help offset the cost of health care. It will be paid on an escalating basis, starting with individuals earning $50,000 or more in taxable income, with a cap at $1,000 a year.

The province says the average Alberta family — with two children and two working parents making a combined $120,000 a year — will pay an estimated $288 more in taxes this year and $480 in 2016.

Corporate income taxes will remain at 10 per cent, the lowest in Canada. Campbell said it's important to keep those rates low to prevent further damage to Alberta's fragile economy. There will be no change to oil royalties.

Alberta still does not have a provincial sales or payroll tax.

Some government departments will see budgets cut, while others will hold the line. There will be slight increases for education and social services.

Opposition parties criticized the budget as a sop to corporations at the expense of working families.

"Middle-income families are being told they need to pay more and get less. Much, much less," said NDP Leader Rachel Notley

"That's happening so that this premier can continue to protect the interests of his boardroom and backroom buddies."

Wildrose Leader Heather Forsyth said the new fees are unnecessary and unfair.

"Gas tax, health tax, birth tax, marriage tax, death tax. It just goes on and on," said Forsyth. "It's going to affect everybody, but I think it's going to affect the people that it shouldn't and doesn't need to affect, and that's middle and lower-income families."

Liberal Leader David Swann said the budget is "a small movement towards getting off the oil and gas roller-coaster, (but) we think everybody should share in the burden.

"That includes the large corporations."

Government revenue is projected to be $43.4 billion and expenses are pegged at $48.4 billion. The deficit will be covered off mainly by the $6.5-billion contingency fund.

Borrowing for infrastructure will increase Alberta's debt burden to almost $18 billion.

Bitumen and conventional oil royalties — Alberta's two main money-makers — are pegged to bring in $2 billion. That's far less than had been projected before oil prices plunged from US$107 a barrel last summer to the current mid-$40 range.

The plan is to have the budget back in the black by 2018, as long as there is a modest rally in oil prices over the next few years.

After that, the government plans to use increasing percentages of oil revenues to replenish the contingency fund and reinvest in the long-term Heritage Savings Fund.

The Canadian Press


Business Highlights

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How gov't aims to protect low-income users of 'payday' loans

WASHINGTON (AP) — Each month, more than 200,000 needy U.S. households take out what's advertised as a brief loan.

Many have run out of money between paychecks. So they obtain a "payday" loan to tide them over. Problem is, such loans can often bury them in fees and debts. Their bank accounts can be closed, their cars repossessed.

The Consumer Financial Protection Bureau proposed rules Thursday to protect Americans from stumbling into what it calls a "debt trap." At the heart of the plan is a requirement that payday lenders verify borrowers' incomes before approving a loan.

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Co-pilot was 'very happy' with Germanwings job

MONTABAUR, Germany (AP) — Andreas Lubitz never appeared anything but thrilled to have landed a pilot's job with Germanwings, according to those who helped him learn to fly as a teenager in this town in the forested hills of western Germany.

On Thursday, French prosecutors said Lubitz, the co-pilot of Germanwings Flight 9525, "intentionally" crashed the jet into the side of a mountain Tuesday in the French Alps.

Members of his hometown flight club in Montabaur, where he renewed his glider license last fall, told The Associated Press that the 27-year-old Lubitz appeared to be happy with the job he had at the airline, a low-cost carrier in the Lufthansa Group.

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Perfection doesn't last: Muni bond returns to be more muted

NEW YORK (AP) — Conditions were nearly perfect for municipal bonds last year, leading to sizeable returns. Perfection never lasts, though, and managers of municipal-bond funds are forecasting more modest returns in upcoming years.

The backdrop for municipal bonds last year was as pleasant as the first warm, spring breeze: Interest rates were falling, the economy was strengthening, demand was high for bonds that pay tax-free income and supply was relatively low. Add it up, and the Barclays Municipal Bond index returned 9.1 per cent in 2014. Just don't expect a repeat.

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Puerto Rico prepares for luxury shopping amid recession

SAN JUAN, Puerto Rico (AP) — A pair of nearly 5-inch black satin heels with a large gold alligator that serves as the front strap retails for almost $1,600 at the first Saks Fifth Avenue store to open in Puerto Rico, more than what the average person here earns in a month and where nearly half the population lives in poverty.

While a nearly decade-long recession has forced many Puerto Ricans to seek a more affordable life on the U.S. mainland, some of the world's priciest retailers have stores at The Mall of San Juan, a $475 million shopping centre opening Thursday alongside one of the island's most crime-ridden public housing projects.

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Fewer Americans filed for unemployment benefits last week

WASHINGTON (AP) — Fewer people sought U.S. unemployment benefits last week, evidence that strong hiring should continue despite signs of slower economic growth at the start of 2015.

The Labor Department said Thursday that weekly applications for jobless aid fell 9,000 to a seasonally adjusted 282,000. The decrease suggests that a recent slowdown in manufacturing, housing starts and retail sales have not trickled into the job market, a possible indication that economic growth will rebound after a harsh winter.

The four-week average, a less volatile measure, tumbled 7,750 to 297,000. Over the past 12 months, the average has dipped roughly 7 per cent.

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Average US rate on 30-year mortgage falls to 3.69 per cent

WASHINGTON (AP) — Average long-term U.S. mortgage rates fell this week for a second straight week, edging closer to historically low levels at the start of the spring home-buying season.

Mortgage giant Freddie Mac said Thursday the national average for a 30-year fixed-rate mortgage declined to 3.69 per cent from 3.78 per cent last week.

The average rate for a 15-year mortgage, popular with homeowners who refinance, eased to 2.97 per cent from 3.06 per cent last week.

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Oil council: Shale won't last, Arctic drilling needed now

WASHINGTON (AP) — The U.S. should immediately begin a push to exploit its enormous trove of oil in the Arctic waters off of Alaska, or risk a renewed reliance on imported oil in the future, an Energy Department advisory council says in a study to be released Friday.

The U.S. has drastically cut imports and transformed itself into the world's biggest producer of oil and natural gas by tapping huge reserves in shale rock formations. But the government predicts that the shale boom won't last much beyond the next decade.

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Toyota: Both hands back on the wheel after recall spinout

TOYOTA, Japan (AP) — After extended introspection at the world's biggest automaker, Toyota says it has put its massive recalls behind it and is preparing to re-engage its growth engine once again.

The Japanese company outlined a new "architecture" Thursday centred on product development and manufacturing initiatives it hopes will be more fail-proof against quality problems, and allow it to keep growing in a sustainable way.

The first cars under the system, medium-sized front-wheel drive cars, will roll out later this year, and will be expanded to half its lineup by 2020, Toyota Motor Corp. said.

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Thai lawmakers move against human trafficking

BANGKOK (AP) — Lawmakers in Thailand have approved a measure creating tougher penalties for violating the country's laws against human trafficking.

The legislation had been under debate for several weeks. But its passage comes in the wake of an Associated Press investigation published this week. It found that fish caught by slaves has entered the supply chains of major supermarkets, restaurants and even pet stores in the United States. Seafood that was caught by hundreds of men trapped on a remote Indonesian island was tracked to exporters in Thailand who sell to America.

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FINRA fines Oppenheimer $3.75M in employee fraud case

NEW YORK (AP) — The Financial Industry Regulatory Authority is ordering Oppenheimer & Co. to pay $3.75 million for failing to supervise an employee who defrauded clients and the producers of a cancelled Broadway musical.

FINRA ordered Oppenheimer to pay a $2.5 million fine and $1.25 million in restitution for failing to investigate Mark Hotton before hiring him, failing to supervise him after he was hired, and overlooking "red flags" like transfers of large sums out of his clients' accounts.

Hotton is now serving a 34-month prison term for two different frauds, one of which involved the producers of a musical version of the psychological thriller "Rebecca."

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FDA to scrutinize unproven alternative remedies

WASHINGTON (AP) — Federal officials plan to review the safety and evidence behind alternative remedies like Zicam and Cold-Eeze, products that are protected by federal law, but not accepted by mainstream medicine.

The Food and Drug Administration announced Thursday that it will hold a two-day meeting next month on regulations for homeopathic medicines, which have long occupied a place on the fringes of U.S. health care. Similar to dietary supplements, homeopathic products are not required to prove they are safe or effective before being sold on the market. But unlike supplements, homeopathic medicines state that they are designed to treat specific medical conditions.

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Diet sodas fall in US; Pepsi takes back No. 2 spot

NEW YORK (AP) — Americans bought less soda for the 10th straight year in 2014, with diet sodas shrinking more than their sugary counterparts, according to a report released Thursday.

An annual report by the industry tracker Beverage Digest found that overall soda volume slipped 0.9 per cent last year, moderating from the decline of 3 per cent the previous year.

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Authorities go after crooked car deals in national crackdown

WASHINGTON (AP) — A nationwide crackdown on auto dealers has turned up widespread evidence of false ads, deceptive loans and fake odometer readings, the government said Thursday.

The investigation led by the Federal Trade Commission and law enforcement resulted in 252 enforcement actions and $2.6 million in consumer refunds and fees.

It was the second time that the FTC has gone after the car industry. Last year, the agency announced 10 cases of deceptive advertising and loans. Officials say the more recent investigation in U.S. and Canada involved the Justice Department and state prosecutors.

___

By The Associated Press=

The Dow Jones industrial average lost 40.31 points, or 0.2 per cent, to 17,678.23. The Standard & Poor's 500 index declined 4.90 points, or 0.2 per cent, to 2,056.15 and the Nasdaq composite fell 13.16 points, or 0.3 per cent, to 4,863.36.

U.S. crude rose $2.22, or 4.5 per cent, to close at $51.43 a barrel in New York. Brent crude, a benchmark for international oils used by many U.S. refineries, rose $2.71, or 4.8 per cent, to close at $59.19 a barrel in London. Wholesale gasoline rose 4.5 cents to close at $1.882 a gallon. Heating oil rose 5.9 cents to close at $1.788 a gallon. Natural gas fell 5.1 cents to close at $2.672 per 1,000 cubic feet.

The Canadian Press


Quebec tables balanced budget as it aims to slice its massive debt

QUEBEC - Quebec will post a balanced budget this year and tightly control government spending as the province aims to slice its massive debt over the next decade, says Finance Minister Carlos Leitao.

With a gross debt of $197.1 billion as of March 31, 2014, Quebec was by far the most indebted province in the country.

Leitao's 2015-16 budget, tabled in the national assembly Thursday, contains no new taxes and ends a string of six consecutive deficits that added $16 billion to the debt.

"The return to a balanced budget is not the end,'' he told the legislature.

"Quite the opposite, in fact, it is a point of departure and gives new momentum to Quebec.''

The ratio of Quebec's debt to gross domestic product last year was a crippling 54.3 per cent, the highest in the country.

In comparison, Ontario followed at 45 per cent, while Alberta had the best ratio —seven per cent.

In tabling the budget, Leitao was looking as far ahead as 2026 when, he hopes, Quebec's ratio will have dropped to 45 per cent.

More immediately, Leitao stressed the importance of keeping the lid on government spending if the province wants to achieve its goals.

Quebec also came out with its 2015-16 spending estimates Thursday, making it clear that previously announced cost-cutting measures are only the beginning of a long-term strategy to downsize government.

Various agencies will be merged, the number of government employees will be reduced and those who remain will be offered salary increases that "respect taxpayers' ability to pay.''

"Government spending must be contained,', said Treasury Board president Martin Coiteux. "We can no longer spend more than the revenues we receive.''

A Quebec budget wouldn't be complete without a plea for more money from the federal government — and Thursday's was no exception.

Leitao, who before entering politics to run in the 2014 election was ranked as the world's second-best economist by Bloomberg News, called on Ottawa to boost transfers in health, social and equalization payments and to invest more in infrastructure in the province.

"The federal government must further commit to sharing the provinces' financial pressures in regard to social programs and infrastructure, in a context where federal surpluses are on the horizon,'' he said.

Quebec expects overall revenue of $100.2 billion in 2015-16, with $19.4 billion of that coming from Ottawa.

Leitao also confirmed the deficit for 2014-15, which ends this coming March 31, will be $2.35 billion, as was projected in last June's budget.

He announced that as of Jan. 1, 2017, the general corporate income tax rate will be cut by one-tenth of a percentage point a year until January 2020, when the rate will be 11.5 per cent.

The government estimates the measures, once fully implemented, will represent a $120-million decrease in the tax load on businesses every year.

And in a bid to keep older Quebecers from retiring, Leitao said an improved tax credit will help save a 63-year-old worker $902 a year by 2018, while the amount will climb to $1,504 for a worker aged 65.

"Quebec will be confronted with a major challenge in regard to manpower in the coming years and we want to create conditions that will encourage more experienced workers to pursue their career for longer,'' he said.

Parti Quebecois finance critic Nicolas Marceau accused the Liberals of taking shortcuts that compromise economic growth.

"It's easy, very easy, to table a zero-deficit budget when you don't care about the consequences on economic growth, on employment, on investment, on Quebecers' standard of living and on services to the population,'' he said.

The Canadian Press




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