Finance topics

The federal government does not plan to intervene in Nortel Network Corp.'s sale of its key wireless unit to Sweden-based Ericsson until the deal has been reviewed by U.S. and Canadian courts next week, a spokesperson for Industry Minister Tony Clement said today.

“It would be inappropriate to speculate on this issue while it is still being reviewed by the courts,” press secretary Laryssa Waler wrote in an email to the Star. “Because it's before the courts, I can't comment further.”

The $1.13 billion (U.S.) deal will be reviewed on July 28.

But New Democrat MP Paul Dewar called this attitude irresponsible and said the Conservatives were “sitting on the sidelines.”

“This do-nothing approach by the Conservatives when it comes to jobs needs to be put to an end,” he said in a phone interview today. “They're waiting for what the courts say, but they should have been at the table (during bankruptcy proceedings). It's astonishing they didn't take the option of having representation at the table.”

Dewar, whose riding in Ottawa Centre encompasses many Nortel employees, said it was the federal government's lack of attention to the floundering company that “let it get away.”

“It didn't have to be this way. Nortel was the premier telecommunications company not too long ago,” he said. “It should have been Nortel acquiring Ericsson – not the other way around.”

Liberal Industry, Science and Technology critic Marc Garneau said he agreed Nortel's announcement Saturday makes it “a sad day for Canadians,” but there does not appear to be grounds for Ottawa to step in at this point.

“Obviously, as a Canadian, it hurts and it's a pity this is happening. But once you get past the emotional part of it, the fact is (Nortel) has been in bankruptcy protection for the past six months … Something was wrong,” he said. “If we want to play in the big leagues, we have to play by international rules … (And) it appears everything did go according to the rules established.”

Garneau, MP for Westmount-Ville-Marie, said everything in Nortel's bankruptcy protection proceedings seemed to follow regulations despite BlackBerry-creator Research in Motion Ltd.'s claim it had been blocked from bidding in the auction.

“I have no basis to say RIM was excluded. I'm assuming RIM could've bid if it complied with payday loan no faxing… the rules,” he said. “I have no evidence to say anything unfair occurred.”

Garneau added Clement's inaction when Nortel approached the government months ago resulted in the tragic outcome for Canada's largest high-tech research and development investor. “Because nothing was done, events took their course.”

The Swedish telecom equipment giant's winning bid beat out Europe's Nokia Siemens Network and a U.S. private equity firm for the unit, Nortel announced early today. RIM says it would have bid $1.1 billion if allowed to join the auction.

Nortel has said at least 2,500 employees will be offered jobs at Ericsson.

Garneau said he hopes this is the case. “Hopefully, these jobs will be (offered). They're high-tech jobs. They're very qualified people.”

The government would review the deal if national security was at stake, the Liberal industry critic said, but he has yet to see any evidence the sale involves sensitive intellectual property being handed over to Ericsson.

Last year, Ottawa blocked MacDonald Dettwiler and Associates Ltd. from selling its sensitive satellite and robotics technology to American rocket-maker, Alliant Techsystems Inc., for $1.3 billion.

But that was a different case from Nortel, Garneau said. “If Nortel were providing the Canadian government with some (technology) that was classified for Canadian defence or security purposes … that (was) going to be turned over to Ericsson, then there would be an argument.”

Dewar, on the hand, said investment review should be based on the overall effect on the country – not just national security.

The Macdonald Dettwiler and Associates Ltd. case was the only time Ottawa intervened in a deal using the Investment Canada Act, which outlines the legal guidelines non-Canadian investors are required to follow, the New Democrat MP said.

“Our investment review should be strengthened. What's the net benefit to Canada? That's what we should be looking at here. It shouldn't be just around security. (The Nortel-Ericsson) deal should be reviewed and looked at very closely,” he said. “(The act) is a joke. It's a paper tiger.”

With files from Chris Sorensen.

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Confidence among U.S. house builders rose this month to the highest since September as sales of single-family units increased and more prospective buyers expressed interest.

The National Association of Home Builders/Wells Fargo index of builder confidence rose to 17 this month from 15 in June, the Washington-based NAHB said Thursday. A reading below 50 means most respondents view conditions as poor.

Lower house prices and tax credits have helped the housing industry stabilize after almost four years of decline. Combined sales of existing and new houses climbed to a 5.1 million annual pace in May, the highest level so far this year. Economists are incorporating an easing in the housing slump in their forecasts of an economic recovery in the second half of 2009.

"Builders are seeing slightly better sales conditions this month as consumers take advantage of the first-time buyer tax credit, low interest rates and attractive home prices," NAHB Chairman Joe Robson said in a statement. At the same time, he said, "many remain quite concerned" about competing with foreclosed properties and a lack of available credit for some potential buyers.
The builder confidence index was forecast to increase to 16 this month, according to the median estimate of 46 economists surveyed by Bloomberg News. The gauge, which fell to a record low of 8 in January, averaged 16 in 2008 payday loans. It was first published in January 1985.

The survey asks builders to characterize current sales as "good," "fair" or "poor" and to gauge prospective buyer traffic. It also asks participants to assess the outlook for the next six months.

The builder group’s index of current single-family house sales rose to 17, the highest since September, from 14 last month. The gauge of buyer traffic increased to 14, also the highest since September, after holding at 13 for three months. A measure of sales expectations for the next six months held at 26 for a second month, after readings of 27 in May and 24 in April.

"The component gauging sales expectations for the next six months remained virtually flat for a fourth consecutive month," David Crowe, chief economist at NAHB, said in a statement. "Builders recognize the recovery is going to be a slow one and that we are facing a number of substantial negative forces."

Confidence increased in one of the four regions, rising to 20 in the South from 15 in June. It held steady at 15 in the West and at 14 in the Midwest, falling to 16 from 19 in the Northeast.

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The Federal Reserve expects the economy this year will sink at a slower pace than it previously thought, but that unemployment will top 10 percent and remain high for the next few years, according to a new forecast released Wednesday.

The Fed now predicts the economy will shrink between 1 and 1.5 percent this year, an improvement from its forecast issued in May, when the Fed projected the economy would contract between 1.3 and 2 percent.

The upgrade comes from the expectation that the economy’s downhill slide in the first half of 2009 wasn’t as bad as previously thought. The Fed said the economy should start growing again in the second half of this year, although the pace is likely to be plodding.

In fact, most Fed policymakers said it could take "five or six years" for the economy and the labor market to get back on a path of full health in the long term. And most officials saw "the economy as still quite weak and vulnerable to further adverse shocks."
Against that backdrop, the Fed’s forecast for unemployment this year worsened individual health insurance plans. The central bank predicted the jobless rate could rise as high as 10.1 percent, compared with the previous forecast of 9.6 percent.

For 2010, the Fed predicted the economy would grow between 2.1 and 3.3 percent. That’s a slight upgrade from its old forecast of between 2 and 3 percent.

Still, it would mark a slow recovery and that will keep unemployment elevated well into 2011, the Fed said. Companies won’t be in any mood to ramp up hiring until they are certain that any recovery has staying power. Some Fed officials predicted the jobless rate could hover in the 8 percent range or as high as 9.2 percent in 2011.

On the inflation front, Fed policymakers bumped up their forecasts. The Fed expects inflation to rise between 1 and 1.4 percent in 2009 and between 1.2 and 1.8 percent next year.

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Now, that’s thinking out of the box.

Nissan Canada staged the biggest giveaway in automotive history on a balmy evening in late June when it handed 50 of its brand-new boxy Cube cars (worth more than $850,000) to contest winners across Canada through presentations simulcast in Toronto, Montreal and Vancouver.

Didn’t hear about the promotion?

No surprises there since Nissan – in partnership with Toronto agency Capital C Communications – avoided the usual mainstream quadrangle of TV, radio, print and billboard to trumpet their car launch.

Instead, the automaker and its agency embarked on in mid-March on its Hypercube social media marketing campaign, that the company says offers significant rewards "creativity in Canada."

"The creative class is what’s motivating everything these days," explains Jeff Parent, Nissan Canada’s vice-president of sales and marketing.

"If you want to get something started, they’re the ones who are talking to each other.

"They are the ones that other people coalesce around. Creative people make their art to infect others. For us, it was a natural fit."

With a recent Ipsos Reid poll estimating that 56 per cent of Canadians boast some sort of social networking profile, it’s no wonder that Nissan and the rest of the auto industry – including recent network campaigners Ford and Honda – are shifting some of their advertising dollars away from traditional avenues.

And they’re not the only industry following the trend.

Vacation vendor Sunquest Canada recently concluded its own series of online-driven contests to attract eyeballs to its MySpace, Facebook and Twitter sites.

Youth-driven products such as music, sneakers and snowboards have also been successfully marketed this way, advertising industry executives point out.

"This really portends the rise of the niches," notes Ben McConnell, co-author of the books Creating Customer Evangelists and Citizen Marketers.

"The niches are really where the big manufacturers especially have to focus their efforts now – that’s where the growth industries are. You exploit the niche and hope it turns into a bigger audience along the way."

McConnell says by targeting specific consumers via social networks, corporations can trigger powerful word-of-mouth buzz about their products.

"When you find those core early adopters, those people who love something that’s cool and new and are influential to a larger group outside themselves.

"That’s not only how word-of-mouth spreads.

"But it is how trends are formed as well," he says.

"Finding that core group of people is always the hardest part."

Once you find them, you have to involve them, notes Rob Young, vice-president of PHD Canada, a media and communications agency based in Toronto and Montreal.

"What you’re seeing is something called `activation,’ which has become popular in the last five years," Young explains.

"Giving away 50 Cubes is an example of social activation: This is where you try to take your brand down to the street level and force some sort of direct interaction between the customer and the brand same day cash advance."

There was interaction aplenty at the Cube contest. Five hundred finalists, including Juno Award-winning recording artist Greg Sczebel, were assigned a blank webpage on Nissan’s hypercube.ca website and invited to creatively "audition" for their chance to win a free vehicle.

"I was fascinated how people embraced this brand and did stuff so much more creative than we could have as an agency," said Capital C chief executive Tony Chapman, who estimates that five million potential consumers were "touched" by the three-month campaign.

"We had songwriters, dancers, poets and puppeteers – stuff that was so insanely brilliant, refreshing and original."

Sczebel wrote two songs, submitted a video for each, and – like all contestants – was allowed to rally votes from his online community.

"I really tapped into my fan and friend base on MySpace, Facebook and Twitter," says Sczebel, who leveraged free autographed copies of his pending October album Love And The Lack Thereof to attract supporters.

Sczebel ended up generating more than 4,000 votes and 21,000 profile views.

"That’s pretty good exposure," he admits.

"That wasn’t just my mom and my grandmother voting for me – that was a lot of people I didn’t ask to check it out."

PHD’s Rob Young says a successful social media campaign allocates advertising dollars efficiently.

"The thinking here is that you could spend $5 to reach 1,000 people in a TV commercial at a relatively low level of involvement, or spend $5 reaching 10 people at a high level of involvement. The high level of involvement – if you get the right consumers – is a better payback."

Unsuccessful campaigns can be catastrophic.

"It has to be done carefully and with the greatest sincerity," Young warns.

"If it’s done poorly, then the consumer could build up a pretty harsh sense of cynicism towards the brand, and things can backfire."

Good campaigns can also save money.

Although Parent wouldn’t divulge the cost of the multi-million-dollar campaign, he said Nissan Canada spent "a third of the amount of what I would normally spend on a car launch of this kind."

He says it’s important to open up a dialogue with the consumer.

"We think we control the brand, but with the Internet, social media and the way people talk today, we don’t anymore," says Parent.

"The brand is really what other people think and say about us.

"So, we’re going to ask this community, `what do you want to do next? This is your car, your brand.’ It will inform everything we do in traditional car launches for a long time."

Ben McConnell says social media marketing campaigns are the wave of the future.

"Programs like this will probably continue to grow for not only car manufacturers, but companies of all shapes and sizes," he says.

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Loyalty program Groupe Aeroplan Inc. is continuing its aggressive international expansion while its former owner and key partner, Air Canada, is struggling to stay aloft amid the current economic downturn.

In a move that highlights the differing fortunes of the two businesses, Aeroplan said yesterday it is planning to spend about $24 million to launch a new coalition loyalty program in Italy next year.

Aeroplan said it has already signed up several retail partners for the program, which will be 75 per cent owned by Aeroplan and is to be modelled after the company’s Nectar program in Britain. Aeroplan purchased Nectar two years ago for $754 million.

"We have publicly stated that we intend to grow our core business offering and I am delighted that we are making good progress in executing this strategy in Italy," Rupert Duchesne, Aeroplan’s chief executive, said in a statement fast payday loan no faxing.

Originally conceived as an Air Canada frequent-flyer program, Aeroplan was spun off by airline parent ACE Aviation Holdings Inc. four years ago.

Details about Aeroplan’s expansion came just one day after the loyalty program revealed it would lend $100 million to Air Canada, which is struggling to avoid a liquidity crunch brought on by the weak economy and rising cash obligations. The loan is secured against the airline’s vacation division.

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It began 41 years ago when a meandering drive through then-rural south St. Louis County landed Orville Roy at the Chrysler assembly plant in Fenton.

Recently discharged from the Marine Corps, Roy decided to fill out an application. A job offer came two days later and, with it, a legacy was born.

Eventually, three of Orville Roy’s sons, a daughter-in-law and a grandson, Michael Roy Jr., would follow him through the Fenton plant gates.

"It’s been our living, our livelihood," said Michael Roy Sr., 48, Orville’s son.

No more.

On July 10, Michael Roy Jr. and 600 other Chrysler workers will punch their time cards and go down in history as the final shift at a location that has turned out the automaker’s products for a half-century.

"There’s no middle class anymore," said Michael Roy Sr., forced to retire from Chrysler in December due to medical problems. "The middle class is gone."

That may be an overstatement from a former worker angered and betrayed by what he sees as the failure of the United Auto Workers and Chrysler to protect local production jobs now outsourced to Mexico and Canada.

But it still rings true for families, like the Roys, who have come to view assembly line positions at Ford, General Motors and Chrysler as a birthright.

Multigeneration families employed by and loyal to a single car manufacturer have long been "part and parcel of the automobile business," said Michael Smith, director of the Walter Reuther Library at Wayne State University and an expert on the labor movement. "That’s why the auto crisis is so devastating."

Matthew Diemer, an assistant professor of counseling at Michigan State University, said it may be premature to declare the "death" of a tradition of children following parents and grandparents into blue-collar manufacturing jobs.

"But maybe," he allows, "what we’re seeing is the death knell."

COMPLICATED OPTIONS

The bell tolled for the Roy family on April 30, the day Chrysler announced it was laying off what remained of Fenton’s Dodge Ram pickup truck work force. (The company halted minivan production at the Fenton location last year.)

After work that afternoon, 24-year-old Michael Roy Jr. and his mother, Cheryl Roy, repaired to a local tavern to consider a series of complicated options.

In mid-May, Cheryl Roy, made her up her mind. An autoworker for 14 years, she rejected a possible transfer to a Chrysler facility in either Illinois or Michigan and took a company buyout.

Cheryl is collecting severance benefits, searching for a job and staying at the family home in Arnold to care for her husband, Michael Sr., who retired following diagnosis of amyotrophic lateral sclerosis — Lou Gehrig’s disease.

Also looking for work, Michael Roy Jr. wonders what the future holds for a young man who aspired to retrace the footsteps of his grandfather and father.

"I’m good with my hands," he said. "And if you’re good with your hands, what can you do now?"

The official answer: Move from the production of goods and services dependent on nonrenewable resources to the production of environmentally sustainable commodities. Manufacturing the blades used in power-generating wind turbines is a commonly cited example.

State and national leaders across the nation, including Missouri Gov. Jay Nixon, contend that so-called "green jobs" represent the next wave of American manufacturing.

Michael Jr. knows that getting a foothold in the clean energy work force means going back to school. A few credits shy of an associate’s degree, he walked away from his education to accept an offer of a part-time Chrysler job that he saw as a stepping stone to full-time employment personal loans.

Strapped by declining income as he helps tend to his father, Michael cannot afford, in terms of either time or money, to return to his studies at Jefferson Community College.

Smith agrees that Michael’s best hope rests in furthering his education,

A former autoworker himself, Smith laments that the days when a union membership card served as a portal to a middle class lifestyle are slowly disappearing.

"The jobs that dad and grandpa had, that didn’t require anything more than a high school education, are no longer around," Smith said. "Even auto working is not just about putting on hubcaps anymore. It’s a lot more sophisticated."

ITS OWN REWARD

That was not the case when Orville Roy, now 80, began working his way through various administrative departments, including payroll, in 1968.

"In the old days, if you knew somebody and you wanted to get hired, all you had to do was ask for a recommendation," he said.

All the better if that acquaintance happened to be a blood relative.

Putting aside their disappointment that jobs once performed in Fenton are now held by workers in Canada and Mexico, Michael Sr. and Cheryl Roy acknowledge their family of six has done all right by the nation’s No. 3 domestic automaker.

"We have four kids that wanted to play sports and take dance classes and do all sorts of things," said Cheryl. "Somebody had to pay for it."

Until Cheryl went to work in the pickup plant in 1995, that somebody was her husband, who had started as a "floater" in the chassis department 11 years before.

"I worked on the line, and that was punishment," said Michael Sr.

"I’ve shoved in engines, I’ve thrown tires and I’ve thrown bumpers," said Michael Sr., lapsing into autoworker jargon to describe the tasks he performed at Fenton. The "punishment" of the line, though, had its own reward: By the time Michael Sr. retired late last year, he was earning $29.95 an hour, plus the heralded UAW benefit package.

There was also the intangible benefit, Michael Jr. noted, of spotting a Dodge Ram on the road and thinking, "I made that truck."

TUG OF TRADITION

Michael Jr. never matched his father’s salary.

Nor, because his tenure paralleled Chrysler’s shrinking market share, was Michael Jr. ever offered a full-time position at the plant.

Michael Jr. can lay claim, however, to a dubious distinction: He worked both the last day and night shift to produce a minivan at the South Plant and, later, was assigned to the last North Plant night shift to build a pickup.

Michael Jr. was circumspect last week as he reflected on the irony of a callback has placed him on a shift that will soon assemble the final Chrysler product ever built in Fenton.

"It’s frustrating," Michael Jr. said. "But (unlike his dad and grandfather) I haven’t put my whole life into it."

Resolved that the time has come for him to move forward, the son of Michael Roy Sr. and grandson of Orville Roy nonetheless feels the tug of the tradition that began on a long ago leisurely drive that wound up, improbably, at a car factory.

"I was kind of hoping," Michael Jr. said wistfully, "that my grandkids would work there."

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Last week hosting the Americans. Next week visiting Russia. China’s busy diplomacy amid the economic crisis reflects growing sway that some say has brought the moment for Beijing to don the cape of a full super-power.

Many Chinese observers think the woes besetting the wealthy West will help Beijing win a bigger global role, but that expectation comes tethered to warnings China should not oversell its strength - above all, not imagine dislodging U.S. dominance or the dollar any time soon.

“The leadership is fully aware that the United States will continue to dominate despite the financial crisis,” said Zheng Yongnian, director of the East Asia Institute of the National University of Singapore, who often travels to China.

“China does see opportunities to accelerate its rise, but it’s still far from becoming an overall super-power.”

That caution will be on display next week when Chinese President Hu Jintao visits Russia for the first summit of the “BRIC” nations, Brazil, Russia, India and China.

The four fast-growing countries may discuss ways to reduce reliance on the United States, but it is Moscow, not Beijing, that has been most vocal about diversifying away from U.S. government bonds and making the Chinese yuan a global reserve currency.

Just last week, when U.S. Treasury Secretary Timothy Geithner was in Beijing to reassure his hosts about the safety of their vast dollar holdings, Chinese leaders made it clear they, too, wanted to see a strong U.S. economy.

China, however, knows well that the game has changed. Its growing prominence is rubbing against its ingrained preference for a muted international role paydayadvance.

The line of foreign governments looking to Beijing for an economic boost has raised the question of how far China should use its vast savings and continued growth during the global slump to advance broader national goals.

“There was initially some uncertainty about the strategic impact of the financial crisis,” said Yan Xuetong, a prominent international relations expert at Tsinghua University in Beijing.

“But now we’re seeing clearly that the crisis will lift China’s international status … With countries asking China for its money, it’s found its international influence has also expanded.”

The discussion is also about the right limits for China’s ambitions. The rejection of Chinese company Chinalco’s tie-up with global miner Rio Tinto last week underscored the pitfalls Beijing faces in extending its reach.

Some nationalists say the economic slump marks the end of American preeminence. But most analysts close to the government stress China remains tied to the much bigger U.S. market and does not have the strength to challenge Washington.

Beijing hopes to boost economic and resource security, regional influence and diplomatic reach without riling the United States and its allies, said Zheng.

“China will continue to climb up the ladder,” he said. “But it does not want revolutionary change in the international system.” 

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WASHINGTON — A small army of Canadian diplomats fanned out across Washington today in a full-court press to "contain the contagion" of Buy America trade protectionism.

Stressing that the frantic round of lobbying was "to educate, not to threaten," Canada’s Deputy Head of Mission Guy Saint-Jacques led Ottawa’s effort to reach out to more than 75 members of Congress with a barrage of raw statistics showing how the benefits of free trade flow both ways.

All 13 of Canada’s consul-generals to the United States were involved in the meetings, together with "private-sector allies," officials said.

"I can report the congressmen are surprised by how many jobs are in their districts, supported by trade with Canada," Saint-Jacques said in a conference call with reporters.

Saint-Jacques acknowledged that the protectionism is flaring today at state and municipal levels, with local governments following through on the Buy America provisions of the U.S. federal stimulus package by barring Canadian companies from bidding on contracts health insurance company.

"But let me remind you the problem started in Washington," where politicians first set in motion the expanded scope of Buy America provisions laid out in President Barack Obama’s massive public spending initiative.

While Ottawa intends to continue efforts to win the support of regional jurisdictions in the U.S., Saint-Jacques said the main goal of the Canadian diplomacy now is to avoid the "slippery slope" of further protectionist legislation — including pushing for the removal of copycat Buy America provisions in two pieces of draft legislation now working through Congress.

"There are worrisome signs on the horizon… the Buy America provision is having a destructive effect on trade and investment patterns," he said.

"They are listening with great interesting to our message. We want to avoid a tit-for-tat situation."

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NIAGARA-ON-THE-LAKE – Pickled or not, Peter Piper would be overwhelmed: So many peppers, it’s an assault on the senses.

"It still scares me sometimes when I come in here," says Toine VanderKnaap and he seems to be only half-joking.

"Here" is the newest of St. David’s Hydroponics’ three greenhouse facilities, more than seven hectares of peppers under glass at a constant 26C-27C with a steamy 80 per cent humidity.

"Think of it as Havana!" says Maarty Hendriksen.

VanderKnaap is general manager and vice-president of St. David’s Hydroponics, which grows red, yellow and orange peppers and also eggplants.

Hendriksen is chief grower, overseeing the first harvest from a giant new greenhouse filled with pepper plants as far as the eye can see – 100 metres of them to either side and 360 metres to the far wall – a whole city block, if they had city blocks out here in the hinterlands outside Niagara-on-the-Lake.

This is farming at its most high-tech, a melding of agriculture and science, precisely monitored and controlled and as green as the peppers themselves before they ripen.

Insects are an essential part of the equation, with a $150,000 bill just in for tiny mites – "indigenous to Ontario," says Hendriksen – that prey on parasites.

"And we use bumble bees for pollination," says VanderKnaap.

The company was started in St. Davids in 1985 by three Dutch immigrants and expanded to Beamsville in 1996. It’s still a privately owned concern, says company treasurer Ian Mole, who doesn’t want to name names. He calls it "a quiet little company. . . that likes to stay under the radar."

The company maintains close ties to the Netherlands where, Mole says, the hydroponics industry is much bigger and leads in technology.

“We get the benefit of all their research and development," he says.

The company won Local Food Plus certification last year. LFP is a non-profit organization that describes itself as "committed to building and fostering local sustainable food systems by certifying farmers and processors and linking them with local purchasers."

Niagara-on-the-Lake Chamber of Commerce in January named St. David’s its 2008 company of the year.

All peppers, whatever colour they wind up, start out green, Hendriksen explains. Ironically, St. David’s doesn’t produce green peppers as such.

"That’s the one area where we can’t compete with field peppers," he says. "It’s a price issue.

"Some people think a pepper’s a pepper but there’s a world of difference between a greenhouse pepper and a field pepper, that may have come from California or Florida or Mexico.”

In Ontario, most of the competition is in Leamington, Mole says. "There’s a fairly large number of hydroponics operations there, growing tomatoes, cucumbers, peppers, of course, and a little bit of eggplant.”

It’s not a business without its risks and challenges, Mole acknowledges easy fast payday loans. But, he adds, the current economic downturn has benefited St. David’s in three ways:

"The price of natural gas, which we use to heat the greenhouses, has dropped dramatically, from $8 a gigajoule to about $3.30. As factories scale down production, they’re not using as much gas.

"Half of our production goes over the border. The U.S. dollar has improved in the last six to nine months to about $1.20 Canadian. Last year, the dollar was almost at par.

"Ours is a capital-intensive business with massive infrastructure. But interest rates have dropped way below what we budgeted for.

"When we see a good financial opportunity, we go in on fixed-price contracts to take advantage of it. But only so far. We also protect 50 per cent of the business. You can never be sure you’re right."

Price is a big issue, Mole says.

"Is demand high or low? Is the product regarded as a staple or a luxury? When people don’t have money in their pockets, are they going to buy high-quality peppers.

"You manage those risks as much as possible. There’s also the risk, whenever you’re growing something, even in a closed environment, of disease. But we’re very good at managing that. It’s never been a big issue."

St. David’s Hydroponics employs Mexican migrant workers, partly because it’s difficult to recruit Canadian labour, Mole says.

"It’s the same with the orchards and vineyards – it’s difficult to find a local population that wants to work at this sort of thing. We’ll bring them in, train them and educate them and, before you know it, they don’t show up.

"The Mexican migrants are excellent. They come for a purpose – to work and make money. They’re focused on the job. We house them very well – I call it Cadillac accommodation – and try to treat them well. It pays off for everyone."

The endless rows of peppers, with plants bearing fruit of varying sizes and maturity, are rooted in coconut fibre from Sri Lanka.

"It’s totally recyclable," says Hendriksen. "Nothing goes to landfill."

VanderKnaap was born and raised in the Netherlands. Hendriksen was born here but his background is Dutch. Both have been in the business for years.

The natural gas heat also provides the carbon dioxide the plants need.

In summer, when it’s far hotter than 26C, chalk – "like gypsum, almost" – is spread on the roof to mask the heat but let light filter through.

The plants are tended from electric carts that go up and down the rows using the hot-water pipes as rails.

As you walk through the immense greenhouse, the peppers gradually change from an almost luminous green to incandescent red and ready for harvest.

Peter Piper wouldn’t know where to begin.

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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.

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