11-010-XIB
Canadian Economic Observer
March 2006

Canada

The BC government tabled its fiscal budget for 2006-07 with forecast revenues of $35.4 billion and expenditures of $33.9 billion. Spending was increased for children’s services and education, along with a $6 billion initiative for new contracts with unionized government workers.

Ontario announced $220 million in aid over three years for the forestry sector to help defray stumpage fees. This is in addition to a $330 million five-year assistance package introduced in September.

GM will spend $227 million to retool its Oshawa truck plant, causing a month-long shutdown in September idling 3,500 workers. Toyota is expanding its investment in an assembly plant being constructed near Woodstock to $1.1 billion.

Enbridge proposed a $1.8 billion expansion of its main pipeline to ship an extra 400,000 barrels per day of crude oil from Alberta to Wisconsin. Enbridge is also spending $1.2 billion to increase the size of its Southern Access pipeline which will double its capacity to 800,000 barrels a day. Nexen and OPTI increased their $3.5 billion spending plans by 10% to add reliability to their Long Lake project and to cut operating costs. EnCana, however, plans an $800 million (US) cut in its capital spending plans (mostly in the US), partly out of concern about shortages. North West Upgrading filed plans to build a ‘merchant’ upgrader near Edmonton that can be hired by oilsands companies that need its services. Husky Energy announced it will open two ethanol production plants over the next year that will consume 700,000 tonnes of feed-quality wheat a year at full capacity.

World

Japanese Toshiba bought nuclear reactor-maker Westinghouse Electric for $5.4 billion (US).

Volkswagen announced restructuring plans which will cut 20,000 jobs in west Germany over three years.