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First, the good news. Canada’s economy will accelerate in 2014 — clocking in at a pace of 2.25%, easily overtaking this year’s modest growth of nearly half that, according to the world’s largest lending organization. But the not-so-good news from the International Monetary Fund is that household debt — fed by near-record low borrowing costs — continues to cloud Canada’s near-term outlook, given that cheap credit is likely be around for another year or more, reports the Financial Post’s Gordon Isfeld. Next year’s economic pick-up — from estimated growth of 1.6% this year —will be powered mainly by a stronger U.S. recovery that will boost Canadian exports and nudge companies to begin spending more on expansion, the IMF said Wednesday. “Private consumption growth [in 2013] has remained robust thanks to an increase in household wealth and still easy financial conditions, but business investment and exports made no contribution to growth,” But that’s expected to begin changing next year.
Related: OECD warns pension safety net fraying as poverty among seniors rises in Canada –Financial Post
Aviation vets seek to launch ultra-low cost airline for Western Canada
A group of aviation veterans is looking to launch a new ultra-low cost carrier in Vancouver next fall that carries the potential of significantly cutting the cost of travel in Western Canada, reports the Financial Post‘s Scott Deveau. Canada Jetlines Ltd. will fly under the moniker “Jetlines.” It is being launched by aviation veterans Jim Scott and David Solloway as well as Dix Lawson and has garnered the support of the provincial government in B.C. Mr. Solloway, who will serve as Jetlines’ chief commercial officer, said the trio believes there is room in the Canadian market for an ultra-low cost carrier and their plans have been met with overwhelming support from potential investors. “We think there’s a vacuum,” Mr. Solloway said in an interview. “We think we can fill it as a British Columbia-based airline.” “There isn’t an [ultra-low cost] model in Canada,” he added. The airline will be modeled after successful ultra-low cost carriers like Ireland’s Ryanair, Allegiant Air and Spirit Airlines in the U.S., and Air Asia and Scoot Airlines in Asia, offering no-frills service for lower prices than its competitors.
Related: WestJet announces first solo flight to Europe — Financial Post
A world without the CMHC
Imagine a world without Canada Mortgage and Housing Corp., writes the Financial Post‘s Garry Marr. What happens next if the government is no longer behind that mortgage, making sure the people loaning the money or the investors buying that loan get paid, should you not make your payments? For starters, you might gently be shown the door because nobody wants your credit risk or you might be told the risk is so high you can forget about interest calculated at 3.25% for the next five years — the rate you can still get in part because of Ottawa’s backing. The International Monetary Fund waded into Canada’s housing market Wednesday and while it didn’t come right out and suggest that the CMHC should be abolished and the government get out of backing loans, the institution is calling for changes. “Over the long run, the need for extensive government-backed mortgage insurance should be re-examined,” said the IMF, in its statement. Today you can walk into a financial institution and try to borrow money for a home with only 5% of the purchase price, provided there’s an agreement between you and the bank that you’ll buy mortgage default insurance.
Bitcoin surpasses US$1,000
The price of Bitcoins surpassed US$1,000 on the Mt. Gox online exchange on Wednesday, fuelled by speculators snapping up the virtual currency as it gains wider acceptance. Bitcoins, which exist as software and aren’t regulated by any country or banking authority, surged to a record US$1,030 today, up more than 80-fold from a year earlier. The currency has rallied on growing interest from investors in China and the U.S., while merchants are starting to accept Bitcoins for everything from Gummi bears to tuition fees. The closing in October of the Silk Road Hidden Website, where people could obtain drugs, guns and other illicit goods using Bitcoins, also generated interest in the currency. The U.S. Senate held hearings on virtual currencies this month. Lawmakers were told by law enforcement and securities agencies that while Bitcoins could be used for fraud — just like any financial instrument — the digital money could also be a legitimate means of exchange.
Related: Winklevoss twins plan bitcoin ETF – Bloomberg
Bet against the loonie: Goldman
The Canadian dollar touched the weakest level against its U.S. counterpart since July, as one of the most influential investment banks advised its clients to bet against the loonie in 2014. The currency weakened as futures of crude oil fell 1.4% to US$92.39 per barrel in New York. So-called commodity currencies, which include Canada’s and the Australian and New Zealand dollars also declined. Yields on Treasury 10-year notes have increased to 19 basis points more than Canadian debt, from negative nine basis points in January, amid speculation that U.S. policy makers will reduce monetary stimulus earlier than Canadian officials. The market thinks “the Bank of Canada will lag the Fed in taking away the easier policy,” Ken Dickson, an Edinburgh-based director for foreign exchange at Standard Life Investments Ltd., which oversees about $291 billion, said in a phone interview. “On that relative basis, we think that will favor the dollar against the Canadian dollar through 2014.”
Related: Loonie’s true value is under 88 cents US, index says – Canadian Press
Law Society seizes Toronto lawyer’s practice after $3-million goes missing
The Law Society of Upper Canada has seized control of the legal practice of Javad Heydary, alleging the high profile Toronto litigator has left the country while some $3-million appears to be missing from his firm trust account, reports Legal Post editor Drew Hasselback. In an ex parte court order obtained Nov. 25, the Law Society took control of the lawyer’s client files, records and trust accounts, and those of several professional corporations affiliated with him. Most recently, Mr. Heydary had been representing condo owners in a dispute with the Trump Tower. He is also the man behind the Red Seal Notary business in downtown Toronto.
Less finger-lickin’, more salsa dippin’
Colonel Sanders may evoke visions of deep fried chicken in a bucket, but as the Financial Post‘s Hollie Shaw reports, KFC is hoping his brand clout will help woo a younger, burrito-loving crowd to an entirely new restaurant concept from KFC Canada. The purveyor of the fat-engorged Double Down sandwich will debut its new banner, KFC Select, next month in Toronto, aimed at consumers drawn to fresher fast food fare from Subway and so-called “fast casual” chains like Mucho Burrito and Chipotle Mexican Grill. With a menu featuring $5.99 rice bowls and grilled chicken burritos with cilantro rice and mango salsa, KFC Select is a stretch from KFC’s chicken, fries and day-glo coleslaw. “We are exploring how to move forward with the brand, especially here in Canada,” said Nicolas Burquier, who joined KFC Canada as general manager last year after transforming KFC France beginning in the mid-2000s, quadrupling its size during his tenure and grossing the highest unit volumes of KFC worldwide.
Related: Why Canadians are growing hungry for ‘gourmet’ burger chains – Financial Post
You’ll flip your wig over this one
Google has come up with a pair of wearable computer glasses. Now Sony Corp. has come up with a wearable computer wig. Sony, which popularized portable music players with the Walkman, is seeking a U.S. patent for “SmartWig” hairpieces that could help navigate roads, check blood pressure or flip through slides in a presentation, reports Bloomberg News. The wig would communicate wirelessly with another device and include tactile feedback, Sony said in the filing with the U.S. Patent & Trademark Office. Depending on the model, the hairpiece may include a camera, laser pointer or global positioning system sensor, it said. The development of wearable technology such as eyeglasses, watches and earpieces is expanding as consumers seek new ways to integrate computers into everyday life. The race to gain a foothold in a market that Juniper Research estimates will jump about 14-fold in five years to US$19 billion is luring companies including Sony, Google Inc. and Samsung Electronics Co.
Related: Will Samsung’s smartwatch vision be a hard sell? – Financial Post
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