Finance topics

OTTAWA–The federal government is now officially in a deficit position with no prospect of getting out of the hole any time soon, the Finance Department said Friday.

The department's monthly fiscal monitor shows government revenues hit a wall in March as corporations began taking large refunds on prepaid tax, and more laid-off Canadians stopped paying taxes.

The net effect was that Ottawa lost $3.6 billion in March, closing the books on the 2008-2009 fiscal year $2.2 billion in the hole. Last year at this time, the government sat on an $11.4 billion surplus.

The last time Ottawa recorded an annual shortfall was in 1996-97, and according to Finance Minister Jim Flaherty, it will be at least another four years before the government sees black ink again.

"Personal income tax revenues decreased by $1.3 billion (in March), or 12.4 per cent, reflecting lower employment and personal income tax reductions announced (in the budget," the department said.

"Corporate income tax revenues were down $2.1 billion, or 46.8 per cent, reflecting refunds issued in the month."

While a final tally on the fiscal year won't be released until later this summer, the $2.2-billion shortfall is twice what Flaherty had predicted in the January budget.

Earlier this week, Flaherty surprised Canadians by announcing that his prediction for a $34-billion deficit during this current fiscal year also grossly underestimated the impact of the recession on the government's bottom line.

He now says the deficit will top $50 billion.

March's shortfall occurred despite a $600-million decrease in program spending, and $200 million lower debt servicing charges payday loans.

The big problem for Ottawa is that revenues collapsed, reflecting the weaker economy and to a lesser extent tax cuts introduced in the budget.

Overall, revenues fell by $3.1 billion for the month, or 14.4 per cent lower from March 2008.

For the fiscal year that closed March 31, government revenues were $9.2 billion lower despite a 2.4 per cent increase in receipts from personal income taxes.

Corporate tax revenues were down $11.1 billion, or 27.2 per cent, reflecting both a weaker profit climate, the impact of lower corporate tax rates and firms beginning to seek refunds on taxes paid.

The department also reported it had an $89.5-billion financial requirement during the fiscal year, compared to a $13.6-billion financial source the previous year, as a result of Ottawa's attempt to improve liquidity in financial markets.

"This year-over-year difference reflects the Budget 2007 announcement that the government would meet all the borrowing needs of Canada Mortgage and Housing Corporation, the Business Development Bank of Canada and Farm Credit Canada. The difference also reflects $55 billion in initial purchases of mortgage pools through Canada Mortgage and Housing Corp.," the department explained.

While the financial requirement is not booked as a deficit for Ottawa because it represents a swap of assets, it does affect the government's borrowing levels.

Source

Government debt prices rose Thursday after the benchmark 10-year yield had hovered at a 6-month high earlier in the session, at the last of three major auctions scheduled for the week.

The benchmark yield had edged up to 3.72% midway through the afternoon, surpassing the 3.71% reached in Wednesday’s selloff, and was the highest the yield has been since mid-November. Yields eased by late afternoon.

Treasury sold $26 billion in 7-year notes, the final portion of a $101 billion debt sale this week. The auction has a bid-to-cover ratio of 2.26, with almost $59 billion in debt coming in for $26 billion of debt sold, indicating some strength.

The auction for the relative newcomer to the field posed the greatest challenge to the market, as demand for longer-dated debt is waning compared to shorter term debt.

"For other central banks, buying is centered on the short end of the yield curve," said Mary Ann Hurley, vice president of fixed income trading at D.A. Davidson. "There is a lot less uncertainty for shorter maturities versus longer maturities."

The government sold $40 billion in 2-year notes Tuesday and $35 billion in 5-year notes Wednesday. The debt sale has contributed to a ping-ponging market, with prices sinking Wednesday as yields surged to 6-month highs, then recovering a little Thursday.

The government has been issuing an unprecedented amount of debt to finance its multi-pronged bailout for the economy. With so much supply hitting the market, investors are wary that there will be enough demand to sop up Uncle Sam’s overflow of debt.

Investors had been concerned about the creditworthiness of the United States after Standard & Poor’s lowered its outlook for the United Kingdom last week to "negative," due to its heavy debt burden. But another major ratings agency, Moody’s came out Wednesday confirming the AAA credit rating of the U.S., soothing some of that anxiety.

Yield curve: The benchmark yield curve, which measures the difference between the yield on the 10-year note and the 2-year note, narrowed to 267 basis points.

It had widened to 274 basis points, a near record spread, earlier in the session as the 10-year yield spiked. On Thursday, the yield was at 273 basis points.

A steeper benchmark yield curve typically signals the economy is headed for recovery, because investors should be rewarded more for keeping their funds tied up for a longer period of time.

However, in this recession, things are a little different. The 2-year yield is locked in place with the key federal funds rate at a target near zero. The benchmark yield has been pushed higher by the massive amount of supply.

"The Fed policy is anchored on hold at 0 to 0.25%," said Hurley. "All of the debt that is being issued and thoughts that the economy may be bottoming here are raising inflationary expectations, that is causing the curve to widen installment payday loans."

Housing factor: The reason that markets care about bond yields is that lending rates move in tandem with Treasury yields. The 30-year fixed mortgage rate moves off the benchmark yield, and with the yield on the 10-year note surging, the market fears that mortgage rates could work higher. A rally in home mortgage rates would threaten a recovery in the housing market.

In an effort to fight higher yields, the Federal Reserve has embarked on a campaign to buy back $300 billion of its own debt, a program called "quantitative easing." The Fed will buy an undisclosed amount of debt next week.

The Fed is buying back debt because "they want mortgage rates lower, they want to find a bottom for housing prices, they want to support the housing sector, they want the economy to improve," said Hurley. "They have to try."

But mortgage rates are on the way up. According to a weekly survey released by Bankrate.com Thursday, the 30-year fixed mortgage rate jumped to 5.45% in the most recent week, up from 5.24% in the week prior.

Some analysts argue that the Fed’s buyback campaign is not nearly big enough to combat the expanding debt load.

"What the Fed is buying back is a drop in the bucket compared to what the Treasury is issuing," said Hurley. "Given what the Treasury is issuing in debt, it is going to be very difficult for the Fed to counteract that."

Bond prices: The benchmark 10-year note jumped 20/32 to 95 22/32 and its yield edged down to 3.65% from the 3.71% hit Wednesday, which was the highest the benchmark yield had been since November 2008. Bond prices and yields move in opposite directions.

The 30-year bond rallied 1 29/32 to 95 25/32, reversing course after plummeting almost 2 points Wednesday. Its yield dipped to 4.51% from 4.6%.

The 2-year note edged down less than 1/32 to 99 25/32 and its yield was 0.98%. The yield on the 3-month note fell to 0.14% from 0.17%.

Lending rates: One key bank-to-bank lending was slightly off a record low. The 3-month Libor was 0.67% Thursday, up slightly from the record low of 0.66% set a couple days prior, according to Bloomberg.com.

Meanwhile, the overnight Libor rate was unchanged at 0.26%.

Libor, the London Interbank Offered Rate, is a daily average of rates that 16 different banks charge each other to lend money in London. The closely watched benchmark is used to calculate adjustable-rate mortgages. More than $350 trillion in assets are tied to Libor. 

Source

OTTAWA–Lower revenues are being blamed as Canadian corporations report operating profits of $55.1 billion in the first quarter of 2009, down 11.8 per cent from the previous quarter.

Statistics Canada reported declines were prevalent across the economy as 18 of 22 industries posted lower profits.

Profits in the non-financial industries fell 12.6 per cent to $41 billion, while profits in the financial industries contracted 9.3 per cent to $14.1 billion.

The agency said lower profits were mainly attributable to oil-and-gas extractors and manufacturers.

Oil-and-gas extractors earned $4.3 billion in operating profits, down 33.5 per cent from the fourth quarter of 2008.

Petroleum and coal-products manufacturers’ profits also decreased, down 24.4 per cent to $1.8 billion.

Manufacturers earned $8 billion in operating profits in the first quarter, down 15.1 per cent from the previous quarter. The bulk of the decrease came in the petroleum and coal industry.

Motor vehicle and parts manufacturers reported an operating loss of $1 car insurance.8 billion, down $401 million, or 28.2 per cent, from the previous quarter. Plant shutdowns in response to lower consumer demand factored in the declines.

Weaker demand for steel and aluminum also led to lower profits for primary metal manufacturers, as operating profits fell 29.9 per cent to $666 million.

Wood and paper manufacturers registered an operating loss of $177 million, as the industry continued to cope with lower demand for lumber and newsprint.

Moderately offsetting losses in the sector were computer and electronic product manufacturers, which posted profits of $1.3 billion, up 11.1 per cent from the previous quarter; and chemical, plastics and rubber producers, which earned $2 billion in operating profits, up 6.4 per cent.

The Canadian Press

Source

More than 800 local hourly workers have accepted voluntary severance and retirement offers from Chrysler LLC, union officials confirmed today.

Joe Shields, president of United Auto Workers Local 110, said 171 of his members accepted one of the offers. He did not have a final tally Tuesday evening easy payday loans. Local 110, which represents minivan workers, had about 300 members who were eligible for the offers, Shields said today.

Source

South African inflation slowed for a second consecutive month in April, increasing the likelihood of an interest rate cut tomorrow to spur an economy that contracted the most in almost 25 years last quarter.

The headline inflation rate fell to 8.4 percent from 8.5 percent in March, the Pretoria-based statistics office said on its Web site today. Inflation was expected to ease to 8.3 percent, according to the median estimate of 22 economists surveyed by Bloomberg. Prices rose 0.5 percent in the month.

South Africa’s economy, the biggest on the continent, fell into its first recession in 17 years last quarter after output fell an annualized 6.4 percent. That may prompt the Reserve Bank to cut its benchmark interest rate by 1 percentage point to 7.5 percent tomorrow, as forecast by 14 out of 26 economists surveyed by Bloomberg, even as inflation stays above the 3 percent to 6 percent target range.

“I don’t envy the Reserve Bank. They are really in a tight spot here,” said Jac Laubscher, group economist at Cape Town- based Sanlam Ltd., the biggest South African-owned life insurer no fax cash loans. “Inflation is still sticky. On the other hand you have the weak economy. They still have a little bit of room” to cut rates.

The rand was at 8.2312 against the dollar as of 12 p.m. in Johannesburg from 8.2550 before the data was released. The yield on the R157 government bond, due 2015, rose 5 basis points, or 0.05 percentage points, to 8.19 percent.

The Reserve Bank has cut its key rate four times since December, lowering it by 1 percentage point at each of its past three meetings. Governor Tito Mboweni said on April 30 that inflation will average 5.4 percent in the final quarter of 2010, without saying whether it will meet its target this year.

Rising energy costs are adding to pressure on inflation. The government increased gasoline prices by 4.4 percent on April 1, while Eskom Holdings Ltd., the state-owned power utility, has applied to the country’s energy regulator for a 34 percent increase in electricity tariffs.

Source

Dallas Federal Reserve President Richard Fisher said there was no sign of a problem with U.S. inflation at the moment, and revealed that Chinese officials had quizzed him on the Fed’s purchases of U.S. government bonds.

Fisher, who is not a voting member of the policy-setting Federal Open Market Committee (FOMC) in 2009, said research by his staff indicated that inflation was currently not a threat.

“I don’t think that’s the risk right now,” Fisher told the Wall Street Journal in an interview published on Monday. “Price increases are less and less. Ex-energy, ex-food, ex-tobacco you’ve got some mild deflation here and no inflation in the (broader) headline index,” he was quoted as saying.

Fisher, who is viewed as one of the Fed’s more prominent inflation hardliners, however, highlighted the need to reverse eventually the United States’ scheme to buy up billions of dollars’ worth of debt to help the nation out of recession.

Policymakers have to be “always mindful that whatever you put in, you are going to have to take out at some point. And also be mindful that there are these perceptions (about the possibility of monetizing the debt), which is why I have been sensitive about the issue of purchasing Treasuries,” he said fast payday loans.

Treasury purchases were also a hot topic on a recent visit to China during talks with officials, Fisher revealed.

“I was asked at every single meeting about our purchase of Treasuries. That seemed to be the principal preoccupation of those that were invested with their surpluses mostly in the United States. That seems to be the issue people are most worried about,” he said.

Fisher added that central bankers had to stand up to politicians calling for ever more financial stimulus.

“Throughout history what the political class has done is they have turned to the central bank to print their way out of an unfunded liability,” he warned.

“We can’t let that happen. That’s when you open the floodgates. So I hope and I pray that our political leaders will just have to take this bull by the horns at some point. You can’t run away from it.”

(Reporting by Marc Jones; editing by David Stamp)

Read more

It’s been a relief while it has lasted. Lower oil prices, that is. But the days of cheaper oil are numbered.

The brief respite from last summer’s record-high crude prices, which aggravated the global economic slump, will soon give way to another oil-price spike that may be more painful than the last one.

"The stage is currently being set for oil prices to skyrocket," says U.S. energy analyst David Fessler in the online investment newsletter Investment U. Fessler cites the decline of such super fields as the North Sea, Alaska’s North Slope, Mexico’s Cantrell Field and Saudi Arabia’s Ghawar Field – largest in the world – along with the extraordinary cost of producing crude from the few remaining newer crude sources such as Alberta’s Athabasca tarsands and reserves six or seven kilometres below sea level off the coast of Brazil.

That’s a view shared by most of the world industry’s veteran experts.

"As the economy picks up, spare capacity will start to erode, and the oil market could tighten up again in the first half of the decade," Daniel Yergin, dean of world oil economists, said in U.S. congressional testimony May 21.

At the same hearing economics professor James Hamilton of the University of California at San Diego added: "If demand in China and elsewhere returns to its previous rate of growth, it will not be too long before the same calculus that produced the oil-price spike of 2007-08 will be back to haunt us again."

Under the worst-case scenarios the experts envision, you can take your pick between $100 (U.S.) per barrel oil in the near term and double that amount by 2014 or sooner.

The recent oil-price recovery to a six-month high of $62 (U.S.) per barrel earlier this month, up from a nadir of about $35 (U.S.) per barrel early this year, is "impressive given the severity of the downturn in global industrial production," says long-time investment analyst Ed Yardeni, chief strategic analyst at Yardeni Research.

"It suggests that oil traders are expecting that once the global economy recovers, supplies will tighten up quickly relative to demand," Yardeni says.

"It will be back to the future."

Then there’s T. Boone Pickens, legendary oilman turned champion of alternative energy sources.

Pickens told Fox News earlier this month, "You’re going to be back to $75 (U.S.) oil by the end of the year, and $200 (U.S.) per barrel within five years."

It’s no less true for being obvious: When oil collapsed more than 70 per cent from its July 2008 record high, many major oil firms slashed their exploration budgets because the lower prices did not cover the expenses of today’s high-cost reserve plays.

The worldwide credit scarcity didn’t help.

In nations within the Organization of Petroleum Exporting Countries (OPEC), as many as 35 new projects have been delayed to 2013. About $100 billion worth of Alberta tarsands expansion projects are on hold. Civil wars continued to rage in Nigeria, America’s fifth-largest source of oil imports credit reports. Conflict has taken the lives of hundreds of people in the west African nation this month. Major disruptions in production in the oil-rich Niger Delta have been routine for the past five years.

All of this means that when global demand comes roaring back – as it will in China, India and other emerging economies –and returns to its pre-recession levels in mature economies in North America and Europe, the needed additional supply won’t be there to satisfy the resurgent demand except at exorbitant prices.

"I’ve often described unsustainably low oil prices as carrying the seeds of future spikes and volatility," Ali al-Naimi, the Saudi oil minister, said recently. "If we place a low priority on preparing for the future, that lack of action can come back to haunt us through supply shortages and another round of high prices."

Officials at the International Monetary Fund are especially concerned about the impact of an oil-price rebound on impoverished economies. They regret that the current period of lower drilling costs was not seized upon as an opportunity to get long-term projects underway.

"The lower that oil prices drop now the greater the negative impact on future supply," John Lipsky, first deputy managing director of the IMF said at an OPEC summit in Vienna in March.

As oil prices were peaking last spring, Yergin’s firm was projecting an increase in world oil capacity to 109 million barrels a day.

The subsequent "capital strike" by exploration companies has forced Yergin to revise that figure down to a current 101.4 million barrels a day. That’s a "squeeze" scenario similar to the recent years of escalating prices, when the gap between supply and demand became been razor-thin.

French oil producer Total S.A., one of the few companies to maintain an aggressive exploration program, including efforts to build a large presence in the Athabasca tarsands, is gloomier still. Christophe de Margerie, Total’s CEO, said the proliferation of project cancellations means the world’s producers will be struggling by the middle of the next decade to keep supply at even 90 million barrels a day.

Noting that oil still accounts for 40 per cent of U.S. energy supplies, Yergin told the U.S. congressional panel that: "We should give clear signals to Canada to develop its oilsands and to Brazil to develop its offshore oil. We should do more research on cleaner uses of coal. We should encourage more domestic natural gas production through hydraulic fracturing. And we should be prepared to use more of our offshore oil and gas deposits by encouraging their development in an environmentally intelligent manner."

Those are fighting words to most environmentalists, who believe no amount of research will yield "clean coal and despair at the pollution risk of U.S. offshore drilling.

The environmentalists are pitted against North American consumers, who promptly lost their ballyhooed interest in small cars once oil prices fell.

dolive@thestar.ca

Source

PARAMOUNT, CALIF.–At least one well-known U.S. vehicle manufacturer is rolling out vehicles as usual. But before a Zamboni can take the ice, it hits the pavement.

The neighbours on Colorado Ave. are used to seeing one of the blocky ice-resurfacing machines rumble out of the Zamboni factory and trudge down the block – top speed: 14 km/h – past the corner KFC. It whirls back, is checked for leaks and fitted with studded tires.

Then the Zamboni is sent someplace like Dubai or Prague or Milwaukee. A handwritten tag on a string near the ignition tells where.

Zamboni may be the most famous name on ice, a pop-culture icon more recognized than Crosby or Ovechkin, probably even Gretzky or Lord Stanley, whose trophy goes to the NHL champion.

And, in this day, it may be comforting to know Frank J. Zamboni & Co., still family-owned and operated, is not asking for a government bailout.

"Not yet," Richard Zamboni, 76, company president and son of the founder, said with an easy smile.

In almost every way, Zamboni is a revered model of consistency. Its form, function and sales output – 200 to 250 of its all-in-one machines are produced each year – have barely changed in decades.

"It’s kind of weird. Even people that don’t know anything about the sport know the Zamboni," said Dave Schneider, a founding member of a hockey-themed band called the Zambonis.

When the company learned of the band years ago, the musicians pleaded, "Please don’t make us change our name to the Ice-Resurfacing Machines," Schneider recalled. The name stayed, and a licencing agreement was struck.

After inventing his machine, Frank Zamboni, the son of Italian immigrants, wanted to name his company Paramount Engineering, to give it more credibility. But that name was taken.

Canadians, especially, are surprised to learn Frank J. Zamboni & Co. is not only American but based nowhere near naturally frozen water. The factory sits in the side-street sprawl of south Los Angeles.

When Zamboni engineers want to do some on-ice testing, a machine is driven several city blocks beneath a skyline of palm trees and fast-food signs, to the Iceland skating rink.

The original machine made by the company still sits in a far corner of the rink cash advance loan no fax. "The one from 60 years ago would still make a halfway decent sheet of ice," Zamboni said. "Just not as good as the new ones."

Moving in slow ovals, the machine scrapes the rutted surface. It gathers the ice shavings and dumps them into an on-board bin using hidden augers. It spreads water with a squeegee to leave a smooth sheen on the ice.

Fans at hockey games – children and the childlike, mostly – often cheer the Zamboni when it takes the ice. They applaud precision and jeer missed spots.

On the TV sitcom Cheers, Carla’s hockey-playing husband, Eddie LeBec, died when he was run over by a Zamboni. Sarah Palin said last year she always wanted to name a son Zamboni. Car and Driver recently test-drove one, finding "the vague steering is totally ’70s Cadillac."

The machine came to be because the elder Zamboni, with his brother and a cousin, opened the Iceland rink in 1940. Frank Zamboni, who died in 1988, then spent much of the next decade building a contraption to eliminate the time it took crews to smooth the ice by hand.

The Model A made its debut in 1949. The rest of the fleet was numbered, in order. No. 9,056, almost built, is headed to a rink in Monterrey, Mexico.

"It’s a small, family-owned business," Zamboni said. "It’s got a name, but it sure has a small niche in a small industry when you get down to it."

Zambonis are custom-made, not built until the order arrives. The lead time is usually six months.

The factory has about 30 employees and produces about 100 machines a year. Each machine sells for at least $75,000 (U.S.), sometimes more.

A second factory, run by Richard Zamboni’s son Frank in Brantford – Wayne Gretzky’s hometown – has a similar output.

"Thirty years ago, my dad said: `Gee, the market’s saturated. We’re going to run out of customers,’" Richard Zamboni said. "I don’t know where that saturation point is that my dad was talking about. We’re not there yet."

Source

The Toronto stock market finished modestly higher today as commodity stocks helped claw back a small portion of Thursday's slide of almost three per cent.

New York indexes were in the red going into the Memorial Day long weekend amid worries about the U.S. government's credit rating and prospects for a General Motors bankruptcy filing.

Toronto's S&P/TSX composite index surrendered an earlier triple-digit rise, closing with a gain of 43.83 points at 9,993.42.

That followed the previous session's 282-point tumble when markets were unnerved by word that Britain may lose its AAA credit rating because of swelling government debt. Traders worry that the United States and other big economies could face similar problems, as politicians try to spend their way out of recession.

The TSX main index rose 144 points or 1.45 per cent on the week, adding up to a 32 per cent surge since the spring rally started March 10.

American-dollar weakness helped push the Canadian dollar ahead 1.39 cents to 89.26 cents US, its strongest level since early October.

"The U.S. dollar is weaker every day because everyone is worried about this printing of money, and clearly that's the only way I can see that they can get out of this mess – debase the currency," said John Stephenson, portfolio manager at First Asset Funds.

The loonie has gained about 4 1/2 cents over the past week against the greenback, which fell today to a four-month low against the euro.

Statistics Canada reported retail sales rose 0.3 per cent in March. It was the third consecutive monthly increase, although less than the 0.5 per cent climb economists had expected.

"But before breaking out the bubbly and declaring the recession over for consumers, note that the recent modest gains follow a huge drop at the end of last year (when sales tumbled five per cent in the month of December alone)," observed BMO Capital Markets economist Doug Porter.

"Even with the three-month string of gains, sales are still down 4.8 per cent from year-ago levels."

The TSX Venture Exchange was ahead 6.66 points to 1,096.51.

Wall Street's Dow Jones industrial average slipped 14.81 points to 8,277.32 for a loss of 54 points in a week when the U.S. Federal Reserve issued gloomy new estimates of how high unemployment might run and how much the economy might slow.

The Nasdaq composite index shed 3.24 points to 1,692.01 to while the S&P 500 dipped 1.33 to 887.

General Motors Corp instant health insurance quote. was down 49 cents or 25.5 per cent at US$1.43. A committee of GM's biggest bondholders said there is no support for accepting a 10 per cent stake in the company through the automaker's offer of 225 shares for each US$1,000 worth of debt.

The Canadian Auto Workers, meanwhile, agreed to another cost-cutting deal with GM Canada in its bid to qualify for government loans to stave off liquidation. The United Auto Workers reached a deal on concessions earlier in the week.

On the TSX, Magna International (TSX: MG.A) slipped 77 cents to $36.24 in the wake of the GM news. Magna had been higher for most of the day after the governor of the German state where General Motors' Opel unit is based indicated he favours a bid by the Canadian auto parts manufacturer for the European automaker.

The TSX energy sector rose 1.1 per cent. The July crude contract on the New York Mercantile Exchange gained 62 cents to US$61.67 a barrel. Petro-Canada (TSX: PCA) added $1.10 to C$44.22 while EnCana Corp. (TSX: ECA) declined 75 cents to $58.01.

The Toronto base metals sector moved up 2.5 per cent. Teck Resources (TSX: TCK.B) rose 73 cents to $15.87.

High River Gold Mines Ltd. (TSX: HRG), a troubled Toronto miner with operations in Russia and Africa, tumbled five cents to 18 cents after it said Russia's OAO Severstal plans to offer that amount per share to minority shareholders.

The Toronto financial sector was down 0.25 per cent as investors look ahead to earnings reports from the big Canadian banks next week. Bank of Montreal (TSX: BMO), which leads off on Tuesday, fell 66 cents $40.87. The TSX financial sector has surged about 50 per cent since March 9.

Manulife Financial Corp. firmed up 25 cents to $21.64 as Ottawa launched a facility guaranteeing term financing for life insurers in the event of a financial market freeze-up.

Investors also found some room for optimism after U.S. banks reduced borrowing from the Federal Reserve's emergency loan program over the past week, seen as a sign that credit stresses are easing.

Indigo Books & Music Inc. (TSX: IDG) gained 59 cents to $12.60 as it declared its first dividend. Sales increased four per cent in its latest quarter, but profit weakened.

Sino-Forest Corp. (TSX: TRE), which runs tree plantations in China, toppled $1.51 to $11.30 after announcing an issue of 30 million shares for $330 million.

Source

VANCOUVER–Canada's 14 largest Canadian forest products companies lost a total of $480 million in the first quarter with B.C. firms hardest hit, a report shows.

The losses were $91 million more than the same quarter last year, when the overall losses were $381 million, as sales and prices continued to drop as a result of the recession.

Losses deepened in the most recent quarter despite a lower Canadian dollar compared to the U.S. currency, the consultancy said.

Western Canadian companies lost a total of $314 million in the January-March period, which was compared to losses of $312 million the same time last year faxless payday advances.

Losses in Eastern Canada widened to $166 million in the quarter compared losses of $77 million the year before.

By comparison, 10 of the largest public U.S.-based forest and paper companies posted cumulative losses of US$63 million in the first quarter of 2009.

That was a drop of US$429 million from earnings of US$366 million in the same period of 2008, the report said.

Source