Every week here at theCurrent we bring you the biggest business stories from around the world. This week: oil prices and the loonie drop, the US economy outperforms expectations, a British group campaigning for a Brexit gets business leaders on board, Ontario releases its sunshine list, Liberals announce deficit budget, Obama visits Cuba.
Bad week for the Loonie
Stocks and the Canadian dollar fell late in the week as oil declined for the first week since mid February. The loonie’s fall was tied to oil prices but also the US dollar which has risen following public statements made by regional Federal Reserve Presidents supporting a hike in interest rates. Raising rates would strengthen the dollar. (Source: http://www.cbc.ca/news/business/loonie-dollar-oil-markets-1.3505844)
US Economy Better than expected
US economic growth outpaced estimates, growing at a slightly faster rate in the fourth quarter of 2015 than had been previously thought. Growth reached 1.4%, lower than the 2% rate from July to September, but higher than the 1% rate initially presented. Consumer spending, which makes up 70% of economic activity, grew by 2.4% up from the 2% previously predicted. (Source: https://www.washingtonpost.com/business/economy/us-economic-growth-slowed-in-4th-quarter-but-gdp-grew-more-than-anticipated/2016/03/25/5b4aa01e-f2b7-11e5-89c3-a647fcce95e0_story.html)
Vote Leave, a British group campaigning for Britain to leave the EU, has released a list of 250 business leaders who support a so-called ‘Brexit’. The list includes Michael Geoghegan, former head of HSBC, and hotelier Sir Rocco Forte. However the list emphasizes that all signatories represented themselves in a personal capacity and did not necessarily reflect their businesses. Last month 36 of the largest listed companies in Britain signed a letter which supported remaining in the EU. A Brexit could have major economic and political implications for Britain and the eurozone, and could affect the exchange rates of both the pound and euro. (Source: http://www.bbc.co.uk/news/uk-politics-eu-referendum-35901811)
Fun in the Sun
Ontario released its so-called Sunshine List this year, revealing public sector employees that made more than $100,000 last year. More than 115 000 employees made more than $100 000 last year, 58 earned more than $500 000 and Tom Mitchell of Ontario Power Generation came in on top with a $1.6 million salary last year. Kathleen Wynne, Ontario’s premier, earned $208 974. Last summer’s Pan Am Games brought in huge salaries for those at the top among them Allen Vansen, Barbara Anderson, Karen Hacker and Katherine Henderson. Some may criticize the games for spending so big on top execs when over 25 000 volunteers went unpaid. (Source: http://www.thestar.com/news/queenspark/2016/03/24/retired-ontario-power-generation-boss-tops-sunshine-list-hydro-one-salaries-no-longer-reported.html)
Better Red than…
Finance Minister Bill Morneau revealed plans for $100 billion deficit spending over the next 5 years and a $30 billion deficit for 2016. Spending will fund infrastructure projects, including public transit, affordable housing, water and waste management systems and other projects. The theory is that deficit spending will plow money into a stagnating economy, and payoff in the long run by building the infrastructure which is crucial for businesses to thrive. According to Morneau “for every dollar a government spends on infrastructure, substantially more than $1 of economic activity is generated.” (Source: http://www.theglobeandmail.com/news/politics/a-trudeau-budget-primer/article29289297/)
Viva La Obama
Obama visited Cuba in the latest step towards thawing frosty relations between the two former Cold War enemies. Cuba’s economy is slowly opening up to American tourists, businesses and culture and the island nation could soon receive a huge boost from American investment. Canadians have had a closer relationship to Cuba over the last 70 years and will hope to benefit as well. (Source: http://edition.cnn.com/2016/03/22/politics/obama-cuba-change-speech-embargo/)
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