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The OPEC cartel agreed on Wednesday to reduce production by 2.2 million barrels a day, the group’s largest cut ever, in an effort to put a floor on falling oil prices.

It is the third time producers have agreed to reduce their output in three months. Since September, members of the Organization of the Petroleum Exporting Countries have pledged cuts totaling 4.2 million barrels a day, or nearly 12 percent of their capacity, a record in such a short time.

But oil futures fell more than 8 percent, or $3.54, to settle at $40.06 a barrel, on Wednesday, as the market focused on the dire state of the global economy, and many experts doubted that OPEC would manage to carry out its promises, leaving markets oversupplied in the face of falling demand.

After riding a wave of rising oil prices for nearly a decade, the world’s top exporters are struggling in a weakening global economy, a dizzying slump in oil consumption and a sharp downfall in prices. In a move reminiscent of 1998, when oil fell below $10 a barrel, OPEC has asked outside producers to trim their production but seems to have found few takers.

"We want non-OPEC countries to contribute, and not just benefit from the impact of our cuts," Chakib Khelil, OPEC’s current president, said after the meeting, which was held under tight security in the coastal Algerian town of Oran.

"It’s in their own interest as well as in ours." Khelil said at a chaotic and confused news conference after the meeting.

Russia, which is not part of OPEC, sent a large delegation to Algeria, but analysts saw this as a gesture of political support that carried little more than symbolic value. Russian oil production is going to decline this year anyway because of government policies that have discouraged investments and harmed domestic producers.

The oil collapse has brought down gasoline prices for consumers, but it is devastating to producers, who have based their budgets for next year assuming prices well above $50 a barrel on line pay day loans.

The Saudi oil minister, Ali al-Naimi, set the tone on Tuesday as he arrived in Algeria, when he proposed a large cut to balance the market and trim commercial oil inventories that have been swelling well above their historic levels. Other representatives quickly backed the proposal.

The Saudis had until now been wary of acting too aggressively lest they derail any economic recovery. In June, as prices were still rising, they pledged to flood the market to prevent prices from spiking. But that did not prevent oil from rising above $145 a barrel the following month.

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Now, with the economy seizing up, the Saudis seem to have become much more concerned with the drop in prices, and their ability to prevent a complete collapse. Oil has fallen by $100 a barrel, or 70 percent, since peaking five months ago. King Abdullah recently said he would like to see prices at $75 a barrel, more than 50 percent above their current levels.

The cartel has not faced such a challenging environment since the early 1980s. Oil consumption is set to decline for the first time in 25 years because of the economic crisis.

The new target sets OPEC’s production at 24.85 million barrels a day, starting Jan. 1.

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The clock with the lavender plastic rim on the back wall of H&H Convenience is an hour and 18 minutes fast. This means nothing to Almaz Nebai. She tells time by the front door.

Starting at 4:30 p.m., it opens every few minutes. That lasts three hours. After that, every 20 minutes or so for another hour, then it tapers off until midnight.

A young Hispanic woman wants her regular small pack of Podium cigarettes, the cheapest at $6 with tax. A man in Docksiders and khakis buys two cans of Arizona tea and stuffs them into a backpack. An Asian woman in heels pulls money from her Louis Vuitton wallet to pay for two packs of DuMaurier. A middle-aged man wants a small Peter Jackson Light with his two cans of Arizona.

"If I get a dollar from the cigarettes, I’m happy," says Nebai.

"With Arizona, there’s not much profit, a few cents, but my customers love it. It’s good for you."

Times are tough all over, but "not much profit," that might as well be the theme song for Ontario’s convenience stores, which have been struggling to get by since the province banned the open display of cigarettes last summer. Between 45 and 65 per cent of corner store profits came from cigarette sales; since such "power walls" were banned that’s been cut by 30 to 50 per cent.

Dave Bryans, president of the Ontario Convenience Stores Association, expects a third of Ontario’s 10,000 convenience stores will be out of business in five years unless the province curbs illegal tobacco sales and starts letting proven, reliable stores sell beer and wine.

But, for now, shopkeepers like Nebai, earning just pennies per hour, make do selling what they can.

Cigarettes, snacks and drinks pay the bills, but not all of them. Since she bought the business in April and moved into the flat at the back, she’s been hunting for deals at Costco and Cash and Carry, clicking through Internet sites to find better suppliers. Rent is $1,600 a month.

A woman at Cash and Carry sent Nebai to Imperial Tobacco, so she gets some brands delivered. The rest she buys every morning, before she opens, whatever she is low on. Podium, made in Caledonia by Lanwest Manufacturing for sale off-reserve, comes from Costco.

With a diploma in accounting from Algonquin College in Ottawa and marketing courses from Seneca, Nebai has plans for this corner north of the Dundas West subway station. There’s a Slovenian deli next door, a Jehovah’s Witness temple down the street. Budget, Price Chopper and Shoppers are nearby. Houses on the streets behind her sell for just under a half-million. The store was Lee-Bee’s West Indian Grocery for years before a couple tried it as a variety store, then gave up and sold to Nebai. She inherited candles, ceramic frogs, hair extensions and shelves of Christmas decorations with the hardware, Pringles, canned spaghetti sauce and kitchen stuff.

Around 11 one morning, she grinds Van Houtte beans for a fresh pot, splits a pack of Hostess cupcakes on two napkins and settles down to talk.

"I loved Ottawa, but when I came here, I loved Toronto, too. It was my first time driving on a highway when I came here from Ottawa."

"I found this place online for a reasonable price. It’s a really good location, the main customer is from the subway, people back and forth in the morning and evening guaranteed approval payday loans. During the day, they come from the neighbourhood. There are a lot of East Bloc people living around here. Everyone is very nice, very nice. It was a struggle at first. I was sometimes shocked that nobody was here, but it’s picking up, slowly."

She and a friend left Asmara, the once-lovely Italianate capital of Eritrea, in 1985, when the 30-year civil war with Ethiopia was at its most brutal, walking for 11 days into Sudan. She was 25. "It was a terrible time. We were hiding from Ethiopian soldiers and Eritrean fighters. But the land around us as we walked was beautiful and we made a promise, my friend and I, that we would come back. She went to Sweden. She called me a few years ago to ask, `Remember the promise?’ But she is dead now, of cancer."

There’s not much room for sentimentality. A woman in a hijab and long skirt with no time to waste floats in looking for a toy for her son, who is 4 today. She leaves with Spider-Man and a long-distance calling card.

"I am so happy here," Nebai says. "There is hope for the future. I’m always thinking, planning the strategy."

She’s been asking the Ontario Lottery Corporation for a terminal and might just get one this month. If she gets approved and there is a machine available, the security deposit runs from $2,000 to up to $6,000 for a full-scale Lotto Centre.

A key-cutting service, cellphone cards, movie rentals, maybe stamps although a store not far away already sells them and Canada Post picks its spots based on postal code. If she buys 60 DVD movies, a company will throw in another 1,000 but she needs a $100 Film Exchange Retail Licence to rent them. Her cut from the ATM machine is half the $1.50 service fee; if she buys it for $2,500, her cut is 85 per cent.

"I tried bread but I had to eat it myself. Perishables are a waste of time – people go to Price Chopper."

She tours the shelves, rating each item. "Bathroom goods are well-demanded. The house materials are really working well."

She brought a Zippo lighter display cabinet up from the basement and added cigarette cases to the stock because customers asked for them. If she gets the lottery machine, if she gets the cell phone card business (a $1,500 down payment, then $14 a month), if she can buy the ATM machine, if she can rent DVDs, if she builds up enough loyal customers, she might make it.

The store opens at 9 a.m., closes at midnight. "Sometimes, it can be like a prison." Then she smiles. "I didn’t marry, I tried to. Now I like not answering to someone."

Her sister and two brothers, one with a master’s in engineering and another with a degree in economics, wanted her to move to Germany to reunite the family, but she prefers Canada. After a refugee camp in Sudan, she had gone to England for surgery on her leg, gnarled with polio. A United Church in Ottawa sponsored her as a refugee.

"It is amazing. I never thought that I would live in Canada. We studied it in geography in school – lots of snow! – and now I’ve become a Canadian. I feel at home here. Everyone is from far away."

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TD Bank Financial Group has reported fourth-quarter net income of $1.01 billion, down from $1.09 billion a year ago, but stressed Thursday it is still providing ample credit to Canadians.

TD said revenue was $3.64 billion in the three months ended Oct. 31, up from $3.55 billion a year earlier but down from $4.04 billion in the third quarter of this year.

Adjusted earnings fell to $665 million, compared with $1.02 billion a year ago.

Earnings per share were $1.22, down by 19 per cent from $1.50 a year ago, and EPS adjusted for one-time items slumped 44 per cent to 79 cents.

The quarterly results "reflected solid earnings contributions from TDBFG’s retail businesses in both Canada and the United States, while illiquid and volatile markets affected the performance of wholesale banking," the bank stated.

TD benefited from non-recurring items during the quarter, including a positive adjustment of $323 million after tax as the bank reversed much of reserves previously set aside for Enron litigation, a gain of $118 million on changes in fair values of hedging derivatives, and a $59-million gain on credit default swaps. These were partly offset by $126 million in amortization of intangibles and $25 million in restructuring and integration items.

Provision for credit losses more than doubled to $288 million from $139 million fast cash advance.

Full-year revenue was $14.67 billion, up from $14.28 billion, with reported net income of $3.83 billion, down from just under $4 billion.

Return on equity for the year fell to 14.4 per cent from 19.3 per cent.

"On the whole, we’re proud of what we’ve accomplished in 2008," stated TD chief executive Ed Clark.

"Our retail businesses are performing very well and, even though TD Securities had a tough year and a particularly tough fourth quarter, we’re pleased that its strategic positioning has protected our investors from the worst of the current turmoil."

Clark added: "As the economy slows, understandably there’s concern from governments and the public that banks may restrict credit. What’s clear from our reporting today is that TD continues to supply credit to its customers and clients."

He said TD’s personal and commercial lending in Canada has continued to grow at an accelerating rate through 2008, despite a general slowdown in credit expansion.

"While the lack of visibility on the economic environment calls for caution, we have a strategy and competitive position that will help us weather the storm," he added.

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General Motors shook an already embattled auto industry Friday as it reported a huge quarterly loss that was much worse than expected and warned it is in danger of running out of cash in the coming months.

The nation’s largest automaker reported that it lost $4.2 billion, or $7.35 a share, excluding special items. That’s up from the loss $1.6 billion or $2.86 a share it reported a year earlier and was far worse than the forecast of analysts surveyed by earnings tracker Thomson Reuters, which had forecast a loss of $3.70 a share.

But the most shocking news came in its statements about its cash position. GM said it had burned through $6.9 billion during the quarter and warned that it "will approach the minimum amount necessary to operate its business" during the current quarter.

In addition, the company said that in the first half of next year its "estimated liquidity will fall significantly short" of what it needs to continue operating. It said the only thing that would save it would be a significant improvement in economic and automotive industry conditions, help from the federal government, better access to capital markets or some combination of those options.

The report was by far the most grim assessment by a company that has insisted it is not considering filing for bankruptcy court protection. While the release did not mention the threat of bankruptcy, the outlook appeared to raise the possibility of such a dramatic step.

In response to questions on a conference call after the report, CEO Rick Wagoner said he would not speculate on whether GM would need to file for bankruptcy protections.

"We’re convinced the consequences of bankruptcy would be dire and extend far beyond General Motors," Wagoner said. "We need to find a way to get through this and that’s our focus."

Shares of GM (GM, Fortune 500) fell 9% Friday to $4.36, a nearly 60-year low.

Industry experts said the incredibly weak October U.S. auto sales that GM and the rest of the industry reported Monday, coupled with Friday’s report, mean that bankruptcy for GM is a very real risk.

"I think we should be worried [about a bankruptcy] right now," said Robert Schulz, Standard & Poor’s senior auto credit analyst. "We were worried before and the relative level of worry is now heightened."

S&P cut GM’s credit rating deeper into junk bond status to a rating of CCC+ Friday afternoon, not far above the D rating that indicates default by a company.

Shelly Lombard, senior high yield analyst at Gimme Credit, an independent research firm, estimates that GM will need to get between $10 billion and $15 billion in federal assistance in order to avoid bankruptcy by 2010 and that the chance of bankruptcy without help is probably 80% to 90%.

"They didn’t want to speak the B word. It doesn’t sound like they have a lot of options if the government doesn’t step forward," she said, adding that aid for the auto industry that has already been approved by Congress amounted to "bringing a Band-Aid to a train wreck."

Both Schulz and Lombard also said that not even a federal bailout may be able to save either GM or Ford in the long-term considering the problems facing the industry.

"To the extent that they do receive some assistance, it’s more buying time rather than a fundamental solution," said Schulz.

Still, experts agreed Congress will need to take swift action to make any difference for the embattled industry.

"This is not something that can go on and be dealt with in the next year, it needs to be dealt with in the next few weeks," said Dave Cole, chairman of Michigan think-tank the Center for Automotive Research. "When your cash is gone, you’re gone."

One possible endgame scenario reported recently involved a corporate tie-up between GM and Chrysler. Wagoner, without mentioning Chrysler by name, said that GM had ended talks about a possible merger with a Detroit rival to concentrate on the cash crisis it now faces.

"While it’s fair to say we conclude this acquisition could have provided significant benefits, we’ve concluded at this particular time that it’s important we put 100% of our efforts on the immediate liquidity challenges," said Wagoner.

Chrysler issued a statement of its own after GM’s report. CEO Robert Nardelli didn’t comment about the merger talks but said Chrysler would keep looking at various options to end its ongoing losses cash advance loans.

"As an independent company, we will continue to explore multiple strategic alliances or partnerships as we investigate growth opportunities around the world that would aid in our return to profitability," he said.

GM announced a series of steps Friday designed to help it improve its cash reserves by $5 billion. Those steps included cutting another 10% of salaried employment costs, on top of the 20% cut in those costs already planned. In addition to expected staffing reductions, those white collar workers will not get their typical incentive pay next year.

The company will also cut capital spending plans by $2.4 billion in 2009, pushing back development plans for some new models. But it warned that even those steps would not be enough unless conditions improve. It did not announce any plans for additional plant closings or hourly staff cuts in its statement, however.

The company is clearly pinning much of its hopes of weathering the current downturn on an industry bailout from Washington.

"The company has engaged in discussions with various U.S. federal government agencies and congressional leaders about the … the need for immediate government funding support given the economic and credit crisis and its impact on the industry, including consumers, dealers, suppliers and manufacturers," according to a company announcement.

Wagoner joined the chief executives of Ford Motor (F, Fortune 500), privately-held Chrysler LLC, as well as the president of the United Auto Workers union Thursday afternoon in meetings with House Speaker Nancy Pelosi, D-Calif., and Senate Majority Leader Harry Reid, D-Nev., to seek support for a wide-ranging bailout package. Both congressional leaders voiced support for additional help for the sector following their meetings.

Among the topics discussed were a $25 billion loan to fund union-controlled trust funds that would be set up in the coming year to cover the health care costs of retirees and their family members. Shifting about $100 billion of those costs from the automakers’ balance sheet to the trust funds was a key concession the companies won from the UAW in the 2007 labor deals.

The discussions also touched on whether the government would allow the automakers to tap the $700 billion bailout of Wall Street firms and banks that was enacted last month. Treasury has so far rejected auto industry inquiries about accessing that pool of money.

The automakers also renewed their pre-election request to double the $25 billion low-interest loan program approved by Congress to help automakers convert operations to make more fuel-efficient vehicles and meet the demands of car buyers and new federal rules.

But Wagoner said just doubling the money available under that program won’t solve the immediate cash crisis facing the industry. And for the first time, he put a dollar amount on the cash that automakers are looking for from the federal government right now.

"In the meeting yesterday we talked near-term liquidity support for the industry in the range of $25 billion," he said. "No one said yes or no to that number."

The company’s problems have been building for many years. It has not made money on its core North American auto operations since 2004, and since that time it has run up $72 billion in net losses, including this latest period.

The company did see a one-time $1.7 billion gain from a change in accounting for its obligation to pay for health care for retirees and their family. That allowed it to post a net loss of $2.5 billion, or $4.45 a share, an improvement from the net loss of $42.5 billion, or $75.12 a share a year ago when it was hit by huge special charges.

Much of the net losses in recent years have been due to non-cash charges, such as the ones a year ago. But even excluding those kinds of special charges, GM’s core auto operations in North America have lost nearly $18 billion over the course of the last 15 quarters.

GM’s announcement came on the same day that Ford Motor reported a $3 billion loss in the period, excluding special items. Even Japanese rival Toyota Motor (TM), which has a much better cash position coming into this crisis, announced Thursday that its third quarter earnings had plunged nearly 70%, as it slashed its full fiscal-year outlook by 50%. 

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Canadian Satellite Radio Holdings Inc. reported its annual net loss narrowed and revenues rose as the Toronto company continued to grow its satellite radio business.

The company, known as XM Canada (TSX: XSR), said Thursday it lost $74.3 million or $1.55 a share for the year ended Aug. 31. That compared with a net loss of $84.6 million or $1.78 a share for fiscal 2007.

In fiscal 2006, XM Canada lost $102.7 million.

Annual revenues rose to $39.5 million from $21.2 million.

For the fiscal fourth quarter, total revenues rose by 72 per cent to $11.8 million.

While the company is still posting big losses, CEO Michael Moskowitz said its business strategy "is working and we are making great progress towards generating long-term sustainable growth and profitability."

“XM Canada had a very successful year capped by two consecutive quarters of positive cash and our first ever quarter of pre-marketing adjusted operating profit,” Moskowitz said in a statement cheapest cash advance.

“Revenue nearly doubled due to our strong import automotive sales, a significant improvement in automotive conversion and growth from both the retail and wireless sectors.

"Top line revenue growth, together with our sharp focus on maximizing the return on investment, has significantly strengthened our financial performance and cash position. We are confident we can operate our business without having to raise additional capital.”

In Thursday trading on the TSX, XM Canada shares fell 35 cents to $1.05, a drop of 25 per cent.

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General Motors’ October U.S. sales plunged 45 percent, and Ford’s and Chrysler’s weren’t far behind, as low consumer confidence and tight credit combined to bring the industry’s sales to an "unsustainably weak level" that is the worst in 25 years.

Automakers sold 838,156 vehicles in October, 32 percent fewer than in the same month last year and the worst performance since January 1991, according to Autodata Corp. and Ward’s AutoInfoBank. The seasonally adjusted annual sales rate of 10.6 million vehicles was the lowest since February 1983.

"It’s really an unsustainably weak level for all manufacturers," said Mike DiGiovanni, GM’s executive director of global market and industry analysis. "This is clearly a severe, severe recession for the U.S. automotive industry and something we really can’t sustain."

The annual sales rate in October 2007 was 16.1 million.

Chrysler’s sales tumbled 35 percent, and Ford’s dropped 30 percent. Toyota’s sales fell 23 percent despite its zero-percent financing offer, and Nissan and Honda posted 33 percent and 25 percent declines, respectively.

Overall, General Motors Corp. sold 168,719 vehicles in October, while Ford Motor Co., including its Volvo brand, sold 132,278 light vehicles and Chrysler LLC’s sales totaled 94,530 units.

If GM’s sales were adjusted for population growth, October would be the worst month of the post-World War II era, DiGiovanni said.

"Clearly, we’re in a very dire situation," he said. Detroit-based GM said its light truck sales tumbled 51 percent compared with the same month last year, while demand for passenger cars fell 34 percent.

Despite the steep drop, GM’s total was enough to keep it ahead of Toyota Motor Corp bad credit cash loans. for the No. 1 U.S. sales spot. Toyota, which rolled out an offer of zero-percent financing during the month, sold 152,101 vehicles. The Japanese company’s light truck sales fell 34 percent, while car sales dropped 15 percent.

Honda Motor Co.’s sales fell to 85,864 vehicles as truck sales fell 29 percent. But sales of cars from its Acura luxury division rose 6 percent.

Nissan Motor Co. sold 56,945 vehicles, and its truck sales dropped 52 percent.

Ford officials said on a conference call with reporters and industry analysts that as bad as October sales were, it’s probably not the bottom.

Emily Kolinski Morris, the Dearborn, Mich.-based company’s senior economist, said that because automobiles are more durable, people can wait without buying a new vehicle until they feel more confident in the economy.

"The answer to when we will start to come out of that trough lies in when the economy comes out of that trough," Kolinski Morris said.

Ford likely will announce car and crossover vehicle production cuts when it announces its third-quarter earnings on Friday, said George Pipas, Ford’s top sales analyst. Truck production cuts earlier in the year have kept inventories low, but car and crossover inventories need to be brought into line, he said.

The Associated Press reports unadjusted auto sales figures, calculating the percentage change in the total vehicles sold in one month compared with the same month a year earlier. Some automakers report percentages adjusted for sales days. There were 23 sales days last month, two less than in October 2007.

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ALBANY, N.Y. — Financially troubled American International Group, now supported by a federal bailout, has agreed to freeze millions of dollars in compensation and bonuses for former executives.

In a letter Wednesday to AIG’s new chairman, Edward Liddy, New York Attorney General Andrew Cuomo wrote that after his office’s review of company documents, the insurance and finance giant agreed to stop payments under former chief executive Martin Sullivan’s $19 million pay package.

AIG also confirmed that no payments will be made from the $600 million compensation and bonus pools of its Financial Products subsidiary, including $69 million the former head of the subsidiary, Joseph Casano, could have been paid and about $93 million that five other top executives might have been eligible to receive.

"The Financial Products subsidiary was largely responsible for AIG’s collapse, and Casano has been terminated," Cuomo wrote. Taxpayers’ financial interests should take priority over those managers, he said.

Company spokesman Joe Norton said Cuomo’s letter was consistent with AIG’s actions and discussions with the attorney general internet pay day loan. After a meeting last week, Liddy and Cuomo issued a joint statement that payments to outgoing chief financial officer Steven Bensinger were stopped and the company would help Cuomo recover any illegal expenditures.

Cuomo said Wednesday that the next step for his office will be investigating how to recoup executive bonuses paid previously, saying a fraud law could apply depending on timing, circumstances and contracts. Handling AIG’s case should be regarded as a template for other companies that require government help, he said.

"Taxpayers are, in many ways, now like shareholders of your company, and the new AIG has a responsibility to them in the first instance," Cuomo wrote Liddy, noting the $120 billion bailout will leave the U.S. Treasury with AIG stock.

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OTTAWA–Canadian inflation came off the boil last month and began what is expected to be a long slide that could see falling prices – rather than rising – become the next economic conundrum facing the country.

Statistics Canada reported Friday that annual inflation cooled by 0.1 point to 3.4 per cent in September, just off August's five-year high.

In Toronto, the rate was unchanged at 3.7 per cent.

Gasoline continued to power the headline rate, while core inflation, excluding volatile food and fuel items, remained tame at 1.7 per cent, below the Bank of Canada's two per cent target.

The central bank has predicted a year-long slowing of the rise in the cost of living toward one per cent rate in mid-2009. And Bank of Nova Scotia economist Derek Holt believes Canada could experience deflation – a rare phenomenon of declining general price levels – next year.

"With credit channels around the world impaired and with incomes and wealth facing a further hit, that's not an environment where prices are going to go up for many categories," Holt explained.

"The problem comes if people and companies expect prices to drop, they start to postpone consumption because those prices will be cheaper later … so that only makes the downside risk facing the economy a self-filling prophecy."

There is little doubt that price increases will slow further, commented Douglas Porter of BMO Capital Markets.

He estimates gasoline prices are on track to fall more than 15 per cent in October, largely taking the steam out of the consumer price index.

"Inflation is rapidly becoming the least of policymakers' concerns," Porter said.

"While this report doesn't make it obvious, Canadian inflation is poised to soon recede meaningfully, even with the recent steep sell-off in the loonie."

Krishen Rangasamy, an economist with CIBC World Markets, said Bank of Canada governor Mark Carney will feel little restraint from cutting interest rates further on Dec. 9. The central bank has already slashed the cost of short-term money by three-quarters of a point this month to stimulate the economy.

About one-third of September's inflation rate was attributable to a 10-cent-a-litre spike in gasoline prices blamed on hurricane Ike hitting Gulf Coast refineries http://full-free-credit-report.com. That left gasoline 26.5 per cent more expensive than in September 2007, Statistics Canada said.

Excluding gasoline, prices would have risen only 2.2 per cent last month on an annual basis, Statistics Canada said.

While fuel costs now are easing with the dramatic decline in global oil prices, some inflationary pressures remain, the Statistics Canada data indicated.

The food index was up 5.6 per cent from a year earlier in September, accelerating from a 4.5 per cent August increase as prices for baked goods and cereal products ballooned 15.5 per cent year-over-year.

"Just as Canadians finally get to enjoy cheaper gasoline, they get slapped with higher food prices," CIBC's Rangasamy commented.

"After initially bucking global trends, Canada's food CPI has soared over the last six months, with an annualized increase of nearly 10 per cent over the period. With the loonie currently flying low, food imports will likely cost more over the coming months, countering for price declines on other consumer products."

Shelter costs also continued to increase in September, up 4.5 per cent, mostly as a result of higher mortgage interest costs. But Canadians saw the impact of the cooling housing market as homeowner replacement costs declined 1.8 per cent on falling house prices.

And while students paid four per cent more for tuition this year, there was some relief from continued price declines for computers, video equipment and other electronic items.

Canadians also found more bargains in car dealerships as the cost of buying or leasing a vehicle was down 9.3 per cent from a year ago, the largest drop since February 1956.

Meanwhile, prices for clothing and footwear slipped 1.3 per cent.

On a month-to-month basis, the all-items consumer price index rose a seasonally adjusted 0.2 per cent from August.

The cost of living varied considerably last month from one part of Canada to the other, with annualized price increases as low as 2.4 per cent in New Brunswick and as high as 5.5 per cent in Prince Edward Island.

Prices in Alberta, previously a hotbed of inflation, registered their smallest increase since December 2005, up 2.8 per cent from September 2007.

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Boeing Co (BA.N: Quote, Profile, Research, Stock Buzz) said delivery of its new 787 Dreamliner to China probably would be delayed, but the ongoing strike made it impossible to say when passengers would be able to ride in the ultra modern plane.

The company’s latest quarterly profit fell 38 percent as a seven-week strike by its jetliner assembly workers wiped out almost a month of production at its Seattle-area plants.

Boeing has orders for nearly 900 of the fuel-efficient Dreamliner, 60 of which are from Chinese airlines. The planes were to have been delivered to the Chinese airlines starting in the third quarter of next year.

“Because of the strike that is ongoing at Boeing there will probably be some delay to that,” John Bruns, a vice president of China operations, told Reuters in an interview.

“But, we just don’t know the impact yet,” he said check cash advance.

Industry analysts had expected another delay to the plane, which is already at least 16 months behind schedule.

Boeing and union officials were scheduled to resume talks with the help of a federal mediator on Thursday, but they have so far struggled to find common ground on the key issue of outsourcing.

China is a focus for Boeing and rival EADS’ (EAD.PA: Quote, Profile, Research, Stock Buzz) Airbus unit as its booming economy is expected to require another 3,400 long-haul planes over the next 20 years, and as a base of production for key parts such as rudders, fairing panels and other composite parts. 

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The Canadian dollar suffered its biggest weekly decline in at least 38 years against its U.S. counterpart this week as the passage by Congress of the $700 billion (U.S.) rescue package failed to persuade investors that the worst of the financial crisis was over.

Canadian bond prices rose and yields fell as fears of a global recession had many in the market betting that central banks would soon be cutting interest rates to spur growth.

The loonie closed at $1.0815 to the U.S. dollar, or 92.46, (U.S.) down from $1.0799 to the greenback, or 92.60 at Thursday’s close.

Canada’s currency ended the week down 4.5 per cent against the U.S. dollar, its biggest one-week drop since at least 1970. Early in the session it touched a 13-month low, but regained some ground after the passage of the rescue package for the besieged U.S. financial sector.

As financial institutions in the United States and Europe have collapsed in response to bursting real estate bubbles and murky assets, lenders have responded by hoarding cash and U.S. dollars have become scarce, driving up their value.

Once the U.S. economic rescue package was passed, traders focused their attention back on world economies.

"We’re getting economic numbers in the U.S. which are dismal, and that, I think, removes any debate about whether there will be a recession in the U.S … and there’s a significant risk of a global recession," said David Watt, senior currency strategist at RBC Capital Markets.

U.S. payrolls plunged in September at the steepest rate in five years as employers cut 159,000 non-farm jobs from their payrolls, the U.S. Labor Department said yesterday. Analysts had expected a loss of 100,000 jobs.

Weakening commodity prices have also weighed heavily on Canada’s dollar, with around half of Canadian exports made up of natural resources (instant payday loans).

"Commodity price measures are not just back to levels of a year ago, but all the way back to levels prevailing in late 2005, and the sell-off is taking no prisoners," said Doug Porter, deputy chief economist at BMO Capital Markets. "

"A darkening global growth outlook and a rejuvenated U.S. dollar – which had its best week in years – have both pounded on resource prices."

Carlos Leitao, chief economist at Laurentian Bank of Canada, said the market expects central banks, the U.S. Federal Reserve and the Bank of Canada included, will start cutting rates in the near term to try to spur growth. Bond yields, which move inversely to prices, fell to reflect those expectations of lower rates.

Early in the session, the Bank of Canada moved to increase confidence in the Canadian markets by upping the amount it plans to inject into markets through Purchase and Resale Agreements to $20 billion from a previously announced $8 billion to help improve liquidity in the financial system.

The two-year bond rose 20 cents to $100.52 (Canadian) to yield 2.500 per cent. The 10-year bond gained 50 cents to $105.40 to yield 3.582 per cent.

The yield spread between the two-year and the 10-year bond rose to 115 basis points from 105 basis points. The 30-year bond added 85 cents to $115.15 for a yield of 4.095 per cent. In the United States, the 30-year Treasury yielded 4.094 per cent

Reuters News Agency

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