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Reuters Canada Business Summary

11/01/08

Canada says likely to lower 2008 growth forecast

OTTAWA (Reuters) - Canada is poised to lower its forecast for 2008 economic growth due to the U.S. housing slowdown, the strong Canadian dollar and increased foreign competition, a senior finance ministry official said on Thursday. In a technical briefing to reporters, he also said it was important that Ottawa control its spending to avoid fueling inflation. High inflation would make it more difficult for the Bank of Canada to ease interest rates to offset the currency appreciation.

Bank gloom overshadows prospect of lower rates

LONDON (Reuters) - Further U.S. interest rate cuts may be in the offing and money market rates easing but news from the world's major banks on Friday gave no indication that the global credit crisis is abating. Merrill Lynch is expected to suffer $15 billion in losses stemming from wrecked mortgage investments, almost twice its original estimate, the New York Times reported on Friday.

Canadian dollar gets boost after Bernanke comments

TORONTO (Reuters) - The Canadian dollar see-sawed its way to a higher close against the greenback on Thursday, as weakness in the U.S. dollar, spurred by renewed expectations of aggressive U.S. interest rate cuts, outweighed some soft data on Canadian building permits. Domestic bond prices ended mixed as dealers positioned themselves ahead of a Canadian jobs report due on Friday.

Toronto stocks rally on U.S. rate-cut signals

TORONTO (Reuters) - The Toronto Stock Exchange's main index recovered from big early losses and finished higher on Thursday as banking and resource issues were encouraged by expectations of further interest rate cuts following comments made by U.S. Federal Reserve Chairman Ben Bernanke. Financials led the way up, gaining 1.5 percent. Canadian Imperial Bank of Commerce was among the biggest net gainers, rising C$2.34, or 3.4 percent, to C$71.34.

RIM says BlackBerry on track in China

BEIJING (Reuters) - Research in Motion Ltd said on Thursday its business in China is developing as planned, although the company has not yet started selling handsets there. Charles Liu, RIM's general manager for China, indicated that the decision about when to sell its smartphones was in the hands of its service partner, China Mobile <0941.HK>. RIM had said in October it expected sales to start in 2007.

Canada bank group urges end to merger restrictions

TORONTO (Reuters) - As Canadian banks shrink relative to their international rivals, a group representing the Canadian banking industry said on Thursday that constraints to growth, including merger restrictions, should be removed. In a submission to a government-appointed review panel on competition policy, the Canadian Bankers Association argues that Canadian financial institutions do not have "the full range of options" to pursue business strategies that their competitors elsewhere have.

Bombardier, Quebec mull options on Montreal Metro

TORONTO (Reuters) - Transport giant Bombardier Inc said on Thursday it is weighing its legal options after Quebec's Superior Court ordered the Montreal transit commission to allow French group Alstom SA to bid for a C$1.2 billion ($1.2 billion) contract to replace subway cars in the Montreal Metro system. In 2005, former Quebec Industry Minister Claude Bechard announced that the Quebec provincial government would award the contract for 336 new subway cars to Bombardier, which is based in Montreal, without going through a competitive bidding process.

Jean Coutu profit falls on Rite Aid hit

OTTAWA (Reuters) - Canadian drug store chain Jean Coutu Group said on Thursday that second-quarter profit sank 88 percent on a big hit from its share of losses at partly owned U.S. pharmacy chain Rite Aid Corp . But analysts said the results largely matched expectations and helped lift Jean Coutu's battered stock, which has tumbled nearly 38 percent in the past six months amid worries about its stake in troubled Rite Aid.

Canada promises aid plan for hard-hit industries

OTTAWA (Reuters) - The Canadian government plans to set up a C$1 billion ($990 million) trust fund to help unemployed workers and communities hard-hit by global economic turmoil, Prime Minister Stephen Harper said on Thursday. But in a challenge to opposition parties, Harper said the aid plan was dependent on the minority Conservative government's next budget being passed by Parliament. The budget is expected in early March and, if the government is defeated, an election will be triggered.

CAW president pans Harper's C$1 bln aid package

TORONTO (Reuters) - The head of the Canadian Auto Workers union said on Thursday that Ottawa's planned C$1 billion ($990 million) fund to aid industry sectors hurt by global economic turmoil falls far short of what is needed to help the ailing Canadian auto industry. CAW President Buzz Hargrove made the comments after attending a meeting with Ontario Premier Dalton McGuinty and the heads of most of the major automakers.

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