Section 2: Economic events

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Canada

Nova Scotia tabled its budget with a projected deficit of $222 million, a two percentage point increase in the provincial portion of its HST to 15% and cuts to the civil service.

A surge in lumber prices resulted in a reduction in the softwood lumber tax effective May 1 from 15% to 10%. International Forest Products announced it will reopen one of its BC sawmills due to improved demand.

GM announced the repayment of $8.1 billion (US) of US and Canadian government loans five years ahead of schedule. GM will invest almost $900 million (US) in five North American plants to produce a more fuel-efficient engine.

New mortgage rules came into effect requiring homeowners to meet the standards of a five-year, fixed-rate loan even if they choose a variable-rate mortgage or a shorter-term arrangement. Refinancing is limited to 90% of the value of the home, down from 95%, and a 20% down payment is required for non-owner occupied properties to qualify for government-backed insurance.

Athabasca Oil Sands raised $1.35 billion in equity to fund energy exploration. Chinese-owned Sinopec paid $4.65 billion (US) for ConocoPhillip’s nine percent stake in Syncrude. Suncor began production at its $1.2 billion Elba natural gas plant in Syria. Talisman sold $1.9 billion of its Canadian oil and gas assets. Irving Oil confirmed it is considering building a biodiesel plant in Saint John, NB.

Ontario announced an $8 billion plan to create more renewable energy which will increase monthly electricity bills by $5 by 2012. Ontario Power Generation announced it was applying to raise rates by 9.6% in January.

World

The sovereign credit ratings of Spain, Portugal and Greece were downgraded by Standard & Poor.

An ash cloud from an Icelandic volcano halted air traffic across Europe, cancelling over 100,000 flights.

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