11-010-XIB
Canadian Economic Observer
March 2007

Canada

The BC government tabled its 2007-2008 budget. Highlights include a 10% reduction over three years in personal income taxes, $375 million for social housing and a $3 billion increase in total debt over three years. Manitoba announced a $2,000 rebate for persons registering an energy-efficient hybrid vehicle between Nov. 15, 2006 and Nov. 15, 2008.

A 13-day strike by CN Rail workers, which caused a number of manufacturers to scale-back or halt production, was settled at month end. A fire at Imperial Oil’s Nanticoke refinery led to fuel shortages at gasoline stations in Ontario. Cameco deferred planned uranium sales from its flooded Cigar Lake mine for up to seven years.

Nexen and OPTI Canada will expand their joint oil sands projects, boosting output 50% to 360,000 barrels a day by 2020. TransCanada Corp received regulatory approval to use an existing natural gas pipeline in Saskatchewan and Manitoba as part of its $2.1 billion Keystone pipeline. Peace River Oil doubled its Bluesky Upgrader proposal into a $2.5 billion, 50,000 barrels-a-day project, including a gas and diesel refinery. TransAlta Corp and Epcon Utilities will proceed with building their $1.6 billion coal-fired Keephills 3 power project near Edmonton. EnCana reported 2006 profit of $6.4 billion, the highest annual corporate profit in Canadian history.

DaimlerChrysler AG announced a restructuring plan that slashes production by 400,000 vehicles annually in North America, closes several assembly plants and eliminates 11,000 hourly jobs over three years (2,000 in Canada), with buyouts and retirement incentives being offered to workers.

Toyota will build an $830 million (US) assembly plant in Mississippi, opening in 2009 with annual production capacity of 150,000.

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