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Reuters Canada Business Summary

22/08/06

Inflation above forecast despite tax cut

OTTAWA (Reuters) - Canada's overall inflation came in unexpectedly high in July despite a cut in the federal sales tax, but core inflation was exactly as forecast and unlikely to prompt the Bank of Canada to raise interest rates. Annual inflation was 2.4 percent in July, down from 2.5 percent in June, but well above the 2.0 percent that analysts had expected, data from Statistics Canada showed on Tuesday.

Ashton urges shareholders to reject Stornoway bid

TORONTO (Reuters) - The board of Ashton Mining of Canada Inc. has urged shareholders to reject an unsolicited takeover offer from Stornoway Diamond Corp. valued at C$120 million ($107 million), the company said on Tuesday. Ashton, a diamond exploration firm, said the offer was inadequate and that it had filed an application with Canadian securities regulators seeking orders to "cease-trade the Stornoway offer and lock-up agreement."

Oil steadies ahead of Iran

LONDON (Reuters) - Oil steadied near $72.50 a barrel on Tuesday, underpinned by Iran's determination to continue enriching uranium and run a risk of international sanctions. The world's fourth biggest oil exporter will respond to a nuclear package backed by six nations at 4 p.m. (1230 GMT) in Tehran, a senior Iranian nuclear official said. Iran has already ruled out suspending uranium enrichment, the key demand.

Bank of Canada core inflation 2.0 percent in July

OTTAWA (Reuters) - The Bank of Canada said on Tuesday annual core inflation was 2.0 percent in July, in line with its projection for the latter part of 2006. The central bank's measure of core inflation excludes eight volatile items and the effects of indirect tax changes.

GM to make reborn Camaro in Canada

TORONTO (Reuters) - General Motors Corp. said on Monday it will make the latest version of its legendary Chevrolet Camaro muscle car at its major Canadian plant just outside Toronto, a decision that will save thousands of jobs at the facility. The automaker said production of the Camaro, which was GM's main muscle car from 1967 to 2002, will begin in late 2008 at Oshawa, Ontario, about an hour's drive east of Toronto. The new Camaro is set to arrive in showrooms by early 2009.

Stock futures flat before Iran decision

NEW YORK (Reuters) - U.S. stock index futures were flat to lower on Tuesday before an announcement by Iran, which is expected to reject incentives from six nations in exchange for halting its nuclear program. Luxury home builder Toll Brothers Inc. said its quarterly profit fell 19 percent and slashed its forecast for the year for the third time, as market demand deteriorated.

Environment impact to rule demand for commodities

LONDON (Reuters) - Future demand for commodities may be driven by environmental impact, with precious metal platinum seen benefiting but coal potentially a loser, Citigroup said. Future demand for some commodities could rise due to recycling and pollution abatement regulations, but could drop for others due to health and safety concerns or pollution risk.

Husky says construction at Tucker project complete

CALGARY, Alberta (Reuters) - Husky Energy Inc. said on Monday that construction has wrapped up at its Tucker oil sands project and oil from the facility is expected to begin flowing in November. Husky, Canada's No. 3 oil explorer and refiner, said it began pumping steam into the Tucker oil sands deposits on Sunday. The thermal project, where steam is used to liquefy the tar-like bitumen locked in the sands so it can flow to the surface, is not expected to reach full production of 30,000 barrels a day for two years

Canada-US lumber deal seen winning support

OTTAWA (Reuters) - The Canadian lumber industry has pledged "substantial support" for a softwood lumber agreement with the United States, enough for the pact to proceed to Parliament, Michael Wilson, Canada's ambassador to the United States, said on Monday. Two major producers that were seen as potential holdouts on the deal, West Fraser Timber Co. and privately held Tolko Industries, both announced on Monday that they would give it conditional support, albeit reluctantly.

Xstrata not looking at Anglo bid: source

LONDON (Reuters) - Miner Xstrata is not working with rivals on an offer for Anglo American , a source close to the matter said on Monday, dampening speculation the world's third-largest miner could face an $80 billion break-up bid. However, analysts said a break-up bid for the gold, platinum and copper specialist was possible in the longer term with cash-rich miners keen to secure high-demand resources such as iron ore, coal and nickel.

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