The Economy NOW!

Virginia Galt at the Globe & Mail:

Almost 45 per cent of Canadian employers have already laid off employees, or plan to, “as the global financial crisis takes a tighter grip on the economy,” according to a survey released Wednesday by consulting firm Watson Wyatt.

The poll of 138 companies, conducted last month, also found that 41 per cent have frozen hiring or intend to.   [more]

From Tanalee Smith:

Rio Tinto Group, one of the world’s largest miners, will cut 14,000 jobs worldwide and reduce capital investment in an effort to control its debt amid waning demand for iron ore and other metals.

The British-Australian company said Wednesday that the job cuts — 12.5 per cent of its 112,000-person workforce, which includes 13,000 in Canada — and other operating-cost reductions will save at least $1.6-billion (U.S.) a year by 2010.

The cuts will be concentrated among contractors, where 8,500 positions will be eliminated while 5,500 of Rio Tinto’s 97,000 direct employees face the axe.

Rio Tinto — burdened with debt taken on for last year’s $38-billion takeover of Canada-based Alcan — also said it will try to sell “significant assets” not previously listed for sale, as it attempts to trim $6.6-billion in debt by the end of next year.   [more]

From the Associated Press at The Star:

Office Depot says it will close 112 stores over the next three months and open fewer stores in 2009 in an effort to cut costs.

The office-supply retailer will reduce its store base to 1,163. Locations being closed include 45 in the Central U.S, 40 in the Northeast and Canada, 19 in the West and eight in the South. Office Depot also will close six of its 33 North American distribution facilities.

In 2009, Office Depot will close 14 stores and open just 20 stores, half of what it had planned.   [more]

Canadian Press at The Star:

Nortel Networks Corp. (TSX: NT) is insisting it is “a viable partner for the long term,” after a report it has hired legal counsel to explore bankruptcy court protection from creditors.

Nortel shares plunged 28 per cent to a new low of 46 cents early today on the TSX, trading later in the day at 49.5 cents, down 14.5 cents or 23 per cent.

The Wall Street Journal, citing unnamed “people familiar with the situation,” said the move was made in case the Toronto-headquartered telecommunications equipment maker’s restructuring plan fails.  [more]

Reuters at The Star:

China’s exports and imports shrank unexpectedly in November as the world’s fourth-largest economy slowed in a startlingly abrupt way in response to the global credit crunch.

The drop in exports from year-ago levels was the largest since April 1999, while the decline in imports was the steepest since monthly records kept by bankers began in 1993.

Other Asian export power houses, including South Korea and Taiwan, had already reported a drop in shipments last month as the shock to confidence that followed the collapse of Lehman Brothers in mid-September reverberated through the world economy.

Economists had expected China’s exports to rise 15 per cent and imports to be up 12 per cent compared with November 2007. But the data showed exports fell 2.2 per cent from a year earlier and imports dropped by 17.9 per cent.   [more]

Ann Perry and Rita Trichur at The Star:

The Bank of Canada slashed its key interest rate yesterday by three-quarters of a percentage point to the lowest level in half a century and confirmed Canada’s economy is “entering a recession” because of the deepening global economic slump.

But chartered banks refused to match the deeper-than-expected cut, dropping their prime rates by only half a percentage point, the second time in the past few months some have balked at passing on the full savings to consumers and businesses.

Canada’s benchmark overnight rate now stands at 1.5 per cent, the lowest since 1958, as the Bank of Canada tries to revive the flagging economy and restore confidence by making it cheaper to borrow money.

The rate reduction was the single-biggest cut since the aftermath of the 2001 terrorist attacks in the United States.   [more]

Nobel prize winning economist Paul Krugman is “scared” about the prospects for next year.

Yet Stephen Harper saw fit to request that Parliament be prorogued so that he could hold on to his cardboard King crown, meaning that our government has done absolutely nothing to protect Canadian workers, retirees, the unemployed,  or low-income families and nothing to stimulate the economy.  Meantime, Barack Obama is making all the right noises about economic stimulus – and he’s not even in office yet.

Investing in infrastructure, as Obama has promised and even Harper has alluded to, is a good thing but it takes time to have an effect on the economy.  We’re wasting time.  For unemployed Canadian workers, the situation is desperate NOW.  There is absolutely no excuse for the political games that Stephen Harper has played.  He is interested in his own power and in his role as destroyer of the Liberals and nothing else.

And then there’s Kamela Miller and her son, Kami:

Welfare incomes in Canada are increasingly inadequate to meet basic needs, according to a report to be released today in Toronto, with Ontario seeing the harshest loss over the past two decades.
In 2007 dollar terms in Ontario, between 1992 and 2007, a lone parent’s welfare declined by almost $5,500, or 25 per cent, from $21,931. A couple with two children saw a loss of almost $8,150 (or 28 per cent, from $29,207), says the report.

“When we do not grant even the basics needed for survival, how then can we honestly criticize the recipients of such assistance for lack of effort or decry behaviours that offer relief from such a miserable existence?” says the report by the National Council of Welfare.  [more]



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