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SHANGHAI — The Organisation for Economic Cooperation and Development (OECD) called on Friday around the world’s 20 biggest economies to step up the slowing pace of reforms to enhance economic growth amid sluggish trade and weak investment.

‘Flashing warning signs’: Canadian markets bracing for ‘dramatic’ Bank of Canada action – and a recession

Recent moves in Canadian financial markets claim that investors see increased likelihood of a recession this season and the possibility of “dramatic action” in the Bank of Canada.

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Finance ministers and central bank governors of the 20 biggest economies, the G20, are meeting in Shanghai over the past weekend to address the weaker global growth outlook.

“Global growth prospects remain clouded soon, with emerging-market economies losing steam, world trade slowing down and also the recovery in advanced economies being dragged down by persistently weak investment,” the OECD said.

“The situation for structural reforms, combined with supporting demand policies, remains strong to sustainably lift productivity and also the job creation,” said the OECD report, prepared for the G20 meeting.

The organization has a task of monitoring reforms within the G20 to help the group deliver on its pledge from 2014 that they’ll increase global economic growth by 2 percentage points by 2018 through a number of coordinated structural alterations in their economies.

At the time, all G20 countries together pledged to deliver some 800 reforms as a whole, however their implementation is lacking, the top from the OECD Angel Gurria told a news conference on the sidelines from the G20 meeting.

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“Just at the time whenever we require it more, when we need to accelerate reform, there’s a deceleration of reform,” Gurria said. “Now you ask , how do we obtain the appetite, the conviction for the reform process going.”

“The problem is it is not happening, even that 2 per cent we agreed on is not happening,” Gurria said. “That is something we’re very worried about.”

The OECD said that the interest rate of reform was generally higher in Southern European countries like Italy and Spain, than among Northern Countries in europe. Outside Europe, the reform leaders were Japan, China, India and Mexico.



The slower-than-expected growth, specially in the world’s second-biggest economy China, has added to uncertainty and volatility on financial markets, as ultra low or even negative rates of interest haven’t provided the expected growth stimulus yet, but have previously reduced returns on investment.

“Finance industry is increasingly volatile as capital looks for both yield and safety,” the OECD said.

“Getting back to healthy and inclusive growth requires urgent policy response, drawing on monetary, fiscal, and structural policies cooperating,” the report said.

G20 financial leaders will discuss on Friday and Saturday how to better coordinate their policy response by trying to identify which policy areas and which countries still had room for maneuver to do more.

“This 2016 Opting for Growth report underscores the significance of synergies among policies in designing policy packages,” the OECD said.

Germany, having a fiscal surplus, an enormous current account surplus in excess of 8 percent of GDP and relatively low investment, is likely to be asked to step up spending, G20 officials said.

? Thomson Reuters 2016

Canada’s oilsands have been battered badly by low oil prices, adverse government policies and transportation constraints, but production is continuing and growth looks unstoppable until the end from the decade, based on two new reports.

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Saudi oil minister Ali Al-Naimi issued a stark warning to global oil executives gathered in Houston, many of them North American producers: Decrease your costs or ‘get out’. Read on

The message to oilsands supporters, opponents and competitors: Get accustomed to it.

An analysis by RBC Capital Markets says oilsands production is on target to grow by a further 760,000 barrels a day in the next four years, from 2.4 million barrels each day right now to peak at 3.A million barrels each day in 2020 – a surprising trajectory given today’s depressed oil prices.

The flood of new oil is originating from a handful of megaprojects already built or under development: three mining projects (Kearl, Fort Hills and Horizon), and five in-situ projects (Foster Creek, Christina Lake, Kirby, Surmont and Sunrise).

As impressive as the growth is, RBC says it is still 235,000 barrels each day short of previous expectations due to deferrals and cancellations over the past year.

The oilsands’ long-time horizon, which was once their great attribute, might be a hindrance inside a more volatile future

Oilsands growth means Canada’s overall oil production will climb to 4.6 million barrels a day by 2020. That’s 40 per cent lower than previously expected, but still a remarkable leap from the 2 million barrels each day produced in 2000, confirming Canada as one of the world’s oil producing powerhouses.

One from the interesting facets of the oilsands growth trend is it is fueled largely by Canadian operators Suncor Energy Inc., Canadian Natural Resources Ltd. and Cenovus Energy Inc., while international companies that had previously rushed to the deposits such as Statoil ASA and PetroChina are sitting on the sidelines.

The picture gets foggy after 2020, when oilsands production could plateau. No growth plans have been announced beyond this decade, as oil prices and policies remain uncertain, particularly Alberta’s intends to cap oilsands greenhouse gas emissions at 100 megatonnes annually. Details of the controversial plan remain a mystery 3 months after its announcement by Alberta’s NDP government.

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In contrast to U.S. tight oil, which may be throttled up or down within months, oilsands projects aren’t well-suited to quick course corrections simply because they require long-lead times – four or five years from design to production for in-situ operations, and at least seven to eight years for mining operations, according to the report by RBC oil analysts, including co-head of worldwide energy research Greg Pardy.

Long lead times also mean the oilsands sector may be not able to make the most of potentially favourable market conditions post 2020, when oil prices might have recovered, resulting in the industry peaking well below its potential, previously pegged at around 6 000 0000 barrels a day.

Another report, by Peters & Co., re-enforces that oilsands operations that use steam-assisted gravity drainage (SAGD) technology are unlikely to shut in production and can instead ride the low oil price cycle.

The SAGD market is in its infancy and has no operational knowledge about widespread steaming and production shut-ins for extended periods, the Calgary-based dealer said.

One of the finest risks is reservoir damage from an influx water, Peters said within the report.

“Shutting in SAGD wells on the widespread basis remains a serious concern for operators, with substantial risks to the reservoir, well-bores, surface facilities and efficiency of the project,” the dealer said.

Peters concludes that oil prices would have to decline below US$20 a barrel for operators to check out shutting in production. Operating costs for the better projects have been in the $15 to $20 a barrel, split between variable costs like power and gas, and fixed costs like maintenance and staff.

The bottom line is the oilsands have limited flexibility to respond to today’s new realities other than by cutting costs, that is already happening overall, and that their long-time horizon, which was once their great attribute, could be a hindrance inside a more volatile future.

ccattaneo@nationalpost.com

Twitter.com/cattaneooutwest

Peak-oil theorists – they’re those who predicted $300-a-barrel oil, because new discoveries wouldn’t materialize – were fundamentally immediately after all. So they say.

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No, not about the $300 price tag. Oil has become around US$30 a barrel and may stay there indefinitely, but that detail, they explain, only helps prove their point. And no, not about the failure to find new oil: The good thing about their theory, modestly revised, is it doesn’t depend on ever-diminishing supplies. On the contrary, peak-oil theorists first got it right, kind of. Oil will still peak and individuals will still abandon oil, simply not because we run out. On the contrary, the oil industry’s doom is going to be its everlasting supply.

For those who have trouble understanding this horror scenario, here is a short course from instructors for example Bloomberg Business and Thinkprogress’s Joe Romm, crowned Hero of the Environment by Time magazine. If you don’t have US$41 billion worth of savvy, as Bloomberg Business’s owner does, or a PhD from MIT as Romm does, you might need to read this explanation twice.

The peak-oil theory applies, they explain, if peak oil is thought in terms of demand, not supply. As the supply of oil won’t peak, demand for oil will, and shortly, since no one really wants oil. The proof is abundant and obvious – everything’s trending that way – once you consider it. Go ahead and take automobile.

The oil industry’s doom will be its everlasting supply

Electric vehicles now account for a mere one-tenth of one percent from the world’s one-billion cars and, according to OPEC, is only going to account for one per cent in 2040. But that estimate might be way off, Bloomberg Business announced this week in “Sooner Than You Think,” its series that “examines a few of the biggest transformations in human history that haven’t happened quite yet.”

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“By 2020, some electric cars and SUVs will be faster, safer, cheaper, and much more convenient than their gasoline counterparts,” leading people to abandon gas vehicles in droves. A Bloomberg New Energy Finance chart shows world oil demand peaking about 2025 due to this “transport transformation.”

Even earlier, by 2023, electric cars could displace two-million barrels of oil each day, developing a glut that will cripple the oil industry in the same manner the arrival of shale oil resulted in a crippling glut of two-million barrels of oil a day. (Still beside me?)



But it gets better (or worse, if you’re rooting for the oil industry) because more and more barrels get displaced as the electric car takes over from the gasoline vehicle, in the same manner colour TV took control of from monochrome. By 2030, eight-million barrels a day get displaced; by 2040, when half the earth’s cars are electrified, 18 million barrels. If you feel the oil industry is on the ropes now, imagine it after 2030. How many black-and-white TVs do you see at Best to buy?

The imminent demise of the gasoline vehicle joins other trends that make peak oil inevitable, peak-oil enthusiasts note, like Millennials’ rejection from the car culture and the imminence of the breakthrough in car batteries that will let them propel vehicles 200-300 miles on one charge.

Absolutely key to all this was the Paris global warming meetings, explains Romm, where world leaders promised to leave the majority of the world’s fossil fuels in the ground. As evidence that they will succeed, he cites that exemplar of environmental responsibility: China. “China understands the near future is low-carbon after which zero-carbon – so it intends to end up being the world leader both in the development and employ of battery electric vehicles, just like it already has both in solar and wind power power.” Besides, global governmental action “is inevitable within the 2020s because the reality of skyrocketing global warming becomes increasingly obvious.”

Put each one of these imminences and inevitabilities together and something else becomes inevitable – the embrace by environmentalists of the new Peak Oil Theory.

Lawrence Solomon is executive director of one’s Probe, a Toronto-based environmental group. LawrenceSolomon@nextcity.com.

OTTAWA – Finance Minister Bill Morneau will use this week’s meeting of commercial nations to promote Canada’s economic blueprint as a possible path for improving growth and financial stability in other states.

Morneau will join his G20 counterparts on the global stage throughout a two-day summit beginning Friday in Shanghai – a conference which comes in a critical here we are at economies now facing renewed threats to growth and financial stability.

While there is general agreement among the G20 that the world is facing a major challenge to reverse a slowdown among the richest economies, there’s less common ground on which to complete about this.

As head from the G20 this season, host China intends to push for movement on overall economic structural reforms and infrastructure investment, as well as encourage more focus on reforming financial regulations and improving oversight on international tax regimes.

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But issues surrounding monetary and fiscal policies are likely to hold the spotlight – plus a slowdown in China’s own economy and domestic market volatility, along with the outlook for oil prices and their impact on global growth.

Canada’s finance minister is expected to create towards the table the requirement for actions like the new Liberal government’s intends to pump billions of dollars into this country’s economy – targeted on infrastructure spending and tax breaks for middle-class families – to advertise long-term growth.

“I is going to be proud to reconfirm Canada’s approach to economic growth as I use my fellow G20 finance ministers to strengthen the worldwide economy and help create prosperity for all of our citizens, particularly the middle-class and also the most vulnerable people in our societies,” Morneau said inside a statement.

“Our government believes that smart investments throughout the economy, including investments in research and innovation, produce the conditions necessary for a good standard of living, a safe and secure retirement, and prospects for future generations.”



Morneau will push the Liberal intend to target tax breaks for that middle-class, support for additional needy Canadians and investments in infrastructure – all of which the government says will ensure the benefits of a long-term growth strategy are spread over the economy, a senior Finance official said in a background briefing for reporters on Thursday.

That could be a try to sell you for some of Canada’s G20 partners.

“Negative rates of interest are proving insufficient to get back to full employment globally, and fiscal policy will be a more powerful tool,” said Avery Shenfeld, chief economist at CIBC World Markets.

“But it’s hard to see the eurozone backing fiscal stimulus and larger deficits in their region, given Germany’s political bent, and Japan seems dedicated to higher sales taxes,” he added. “China has room to ramp up deficits and cut rates of interest further and will also be encouraged through the G20 to do this.” 

The International Monetary Fund has already highlighted the gulf between what is accomplished and what might be achieved by the G20. 

With the collapse in global oil prices, any proceed to help restructure weaker economies might be compromised by disappointing growth in leading countries, including in Canada where the plunge in crude has pushed Alberta and Newfoundland and Labrador into recession, and may now perform the same nationally – just months after a mini-recession in the first half of 2015.

In a study released Wednesday, the IMF said the G20 “must plan now for co-ordinated demand support using available fiscal space to boost public investment.”

For Canada’s Liberals, elected inside a federal vote in October, the continuing deterioration from the global economy, with few signs of a sustained rebound in oil prices, has forced the federal government to drastically revise its deficit outlook with this fiscal year – now likely to be more than $18 billion, while many economists express it could reach $30 billion.

The final tally is going to be contained in Morneau’s 2016-17 budget, to be sold March 22.

“There is definitely an increasing view around the world that government should be considering stimulating growth a little more around the fiscal side,” said Emanuella Enenajor, senior economist at Bank of America Merrill Lynch in Ny.

“The fact that Canada is actively doing that, or is dedicated to doing that, I believe makes a large amount of sense given the fiscal room that the government has,” she said.

“I think Canada is in a unique position among the G20 so that you can do this. Of course, we have to recognize that government spending is merely a Band-Aid solution. Greater spending by Ottawa will temporarily support growth. It cannot be trusted to be a sustainable growth driver, and it will need an ending point.”

gisfeld@nationalpost.com

Twitter.com.gisfeld

 

Nissan Motor Co. disabled a mobile application for controlling its Leaf electric car following a security researcher demonstrated how hackers could access temperature controls and other functions from across continents.

Japan’s second-largest automaker made the app unavailable after Australian researcher Troy Hunt demonstrated an ability to compromise into a friend’s Leaf in the U.K. and access information about the battery status and climate controls. Hunt wrote the car’s vehicle identification number, that is visible through the car’s windshield, was the only piece of information needed to undermine the app’s insecure programming.

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U.S. regulators have called for carmakers to boost safety measures after Fiat Chrysler Automobiles NV this past year recalled 1.4 million vehicles that hackers could access remotely and control the steering, brakes and engine. Mark Rosekind, administrator for that National Highway Traffic Safety Administration, in January called for specific actions the government may take within the next year to speed the adoption of technologies that would make autos less vulnerable.

Nissan apologized on its Facebook page after disabling the electric car’s app and said it’s focusing on an updated version. The only functions that could be controlled remotely through the app could be operated manually, based on an e-mailed statement.



Bloomberg News

It’s merely a small step but there’s finally what’s promising out of Dundee Corp., the holding company that has interests inside a slew of industries including investment advisory, corporate finance, energy, resources, property and infrastructure.

The great news: a good investment Dundee made in a recently formed unit more than four years back seems set to visit public using a reverse takeover with a Gulfstream Acquisition 1 Corp., a capital pool company whose shares are on the TSX-Venture Exchange.

This week Gulfstream announced it had signed a non-binding letter of intent with Blue Goose Capital Corp. (Dundee acquired a majority stake in Blue Goose in 2011, right after creating Dundee Agricultural.) Plans demand that intent to be turned into a definitive agreement.

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For Gulfstream the proposed acquisition is going to be its qualifying transaction considering that it is buying Blue Goose. Once the merger is finished, Blue Goose will end up a public company and Dundee will have monetized one of its investments.

Blue Goose, whose net assets in Dundee’s last annual report (March 2015) were listed at $86.13 million, is focused “on the production, distribution and sale of organic and natural beef, chicken and fish.” Dundee has an 87 percent curiosity about Blue Goose, that has operations across Canada: It’s organic beef cattle operations along with a hay-making business in B.C.; as well as an organic and natural poultry business in addition to a fish farming business in Ontario.



Blue Goose, which has been around since 1992, was formed “with one man’s need to feed his family neat and nutritious protein, and also the belief that should you take care of your land and animals, they will look after you.” In each from the last financial years Blue Goose has posted a loss.

For the qualifying transaction to proceed, numerous steps need to be taken: Blue Goose has to raise $20 million; the two sides have to complete their due diligence; the shareholders of Blue Goose need to approve the deal; and also the TSX-Venture needs to sign off.

TASEKO BATTLE

The proxy battle being fought by Raging River, a shareholder and bond holder at Taseko Mines – is similar to many others that have occurred over the years: The dissident wants change in the company mainly because of either management’s poor performance or governance issues; the organization typically resists; and the fight continues until its clear that one side is set for victory.

Along the way there’s lot of mud slinging. Thursday wasn’t any exception. In the morning Taseko issued an argument saying Raging River had failed to disclose a corporate bankruptcy of 1 of “its proposed nominees for Taseko’s Board.” (Within the afternoon Taseko made a second release announcing the resignation of 1 of their directors “effective immediately.”)

In its first release, Taseko said Raging River “explicitly denied” the involvement of their four director nominees with any bankruptcies within the previous Ten years, a requirement under Canadian law. In that release, Taseko included an attachment detailing the bankruptcy settlement agreement with one of Raging River’s nominees.

By the afternoon, Raging River indicated it’s “commencing a defamation lawsuit with the aim of elevating the tenor of the debate to focus on the actual issues of Taseko.”

Given that the meeting date is May 10, there are many time for more arrows to become fired by each side.

bcritchley@nationalpost.com

A minority shareholder has become claiming that Corus Entertainment Inc. is paying up to $858 million more than it ought to to acquire related company Shaw Media Inc. and it has proposed some new terms that it says it would be willing to accept. 

Corus minority shareholder urges regulators to examine ‘serious’ disclosure concerns in Shaw Media deal

Two market regulators have been urged to review whether enough information about Corus Entertainment Inc.’s proposed $2.65-billion acquisition of Shaw Media Inc. continues to be publicly disclosed to allow minority shareholders to make an educated decision

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In a presentation released Thursday, Catalyst Capital Group Inc. said that Corus could increase the need for its minority shares by between 23 and 107 percent, or up to $10.50 a share, whether it decided to renegotiate the relation to its proposed $2.65-billion transaction, which is for $1.85 billion in cash and $800 million in stock.

Catalyst had initially calculated that Corus was overpaying for Shaw Media by as much as $600 million, including synergies, in a presentation it made to Corus management on Feb. 16. In the new valuation, the private equity firm employs a lower adjusted multiple to measure Shaw Media’s enterprise value.

Corus disputed the $600-million you’ll need Tuesday and pointed out that Catalyst had originally asserted Corus overpaid by as much as $200 million. “Catalyst’s internal calculations on the fair value for Shaw Media seem to be based on flawed and ill-informed assumptions which are simply not credible,” it declared.

In an e-mail Thursday, Corus spokeswoman Sally Tindal said the Shaw Media deal was heavily negotiated over a period of 4 months using special committees, adding that two separate fairness opinions were considered. Both deemed the purchase price of $2.65 billion to become fair.

In a study note published Wednesday, analysts at Canaccord Genuity questioned the claims being produced by Catalyst and wondered whether they would have any affect on the shareholder vote.

“We are unclear of Catalyst’s motive at this time and wonder if its arguments will hold much sway with Corus’ public shareholders,” the note stated. They wrote that Corus paying “a modest premium valuation” for Shaw Media “appears justified” since Shaw Media is posting flat-to-modest declines in organic earnings before certain costs (EBITDA), whereas Corus’ results have been falling within the mid-to-high single digits.

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Catalyst, a private equity finance firm that focuses on distressed situations, is also taking problem with how Corus intends to finance the offer, and it is suggesting that the company issue fewer shares to reduce dilution and declare a unique dividend, among other requests.

Catalyst is asking that Corus reschedule the Mar. 9 special meeting and publish a revised circular that contains “full and clear disclosure of all material facts that have not been provided in the present circular so they can make an educated decision,” the company said in a statement.

While this is usually a good deal for that Shaw family, it’s a bad deal for every Corus minority shareholder.

The bulk from the voting shares of Corus and Shaw are controlled by JR Shaw through the Shaw Family Living Trust. Since this deal is between related parties, Corus requires the approval of at least half of the votes cast by its minority shareholders. Last week, Catalyst urged two securities regulators to examine whether enough information had been disclosed to investors, especially that it believes the Shaw family stands to gain a minimum of $50 million as a result of its controlling interest in both companies.



“Although this may be a good deal for that Shaw family, it’s a bad deal for every Corus minority shareholder,” said Gabriel de Alba, Catalyst’s md and partner. “Catalyst has asked Corus simple questions on behalf of all shareholders, simply to be met with secrecy and a good flow of misleading information.”

De Alba said that “the rate where they’re trying to push through this transaction” is reason to be concerned. This deal was announced close to a month after Shaw decided to acquire Wind Mobile Corp. for $1.6 billion.

Corus also said Thursday that it’s postponing its proposed high-yield debt offering “until market conditions improve.” Corus planned to raise as much as $300 million in bonds to exchange some of the other committed credit facilities associated with the transaction, which still remain in place. Sources state that the bond market was demanding terms for this offering that exceeded the amount Corus was prepared to pay. 

Class B shares of Corus fell 0.7 percent Thursday to $9.87. Since Corus announced the acquisition on Jan. 13, its stock has plunged 16 per cent and today trades at a 56 per cent discount to the 52-week high it reached last February. Its quarterly dividend of nine cents per share is yielding a lot more than 11 percent.

TORONTO – The OMERS pension fund is reporting a 6.7 percent net return last year around the investments it manages for municipal along with other public-sector workers across Ontario.

OMERS says its assets grew by $5 billion last year after expenses to around $77 billion, with 52 percent in public investments and 48 percent in private investments.

Returns for its private investments – including shares of non-public companies, infrastructure and real estate – outperformed public investments last year.

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OMERS says its public investments earned 0.7 percent as the private investments gained 14.5 percent in 2015.

It also received $3.8 billion in contributions from plan members and employers, and paid out $3.4 billion in benefits.

The fund administrator says the outcomes exceeded its long-term funding requirement for a 6.5 per cent annual return. Its funded status improved to 91.5 percent from 90.8 percent in 2014.

OMERS invests and administers pensions for Ontario municipalities, school boards, emergency services and native agencies.

WINNIPEG/CALGARY – Canadian farmers are cashing in around the highest vegetable prices in years, helped through the country’s weak currency and soaring costs of U.S. imports which have renedered them unexpected winners inside a bearish commodity world.

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Soft wheat and canola prices may diminish Canadian farm incomes by 9 percent this year. But it is the very best of times for carrot and beet growers, a part of a distinct segment industry best-known for stocking farmers’ markets.

“Per acre, there’s nothing that can compare with it right now,” said Sam Hofer, who grows carrots at Dinsmore, Saskatchewan. “You can make good pocket money off 50 acres (20 hectares) of land.”

At Emile Marquette’s farm near Perigord, Saskatchewan, his 20 acres of beets would bring 10 times more net gain per acre than canola. That’s due to beets’ higher output per acre in addition to sky-rocketing prices.

The year ahead looks to have “huge potential,” Marquette said.

Fresh vegetable and fruit prices jumped 18 and 13 per cent respectively in January annually, statistically Canada.

The price of imported U.S. produce has spiked because the Canadian dollar, now trading around 74 U.S. cents, fell 16 percent this past year. Excessive rain in some U.S. regions has added costs.

Marquette is part of a grower group that sells vegetables to Saskatchewan-based Federated Co-operatives Limited. The growers and co-op set price increases for 2016 of five to 10 % on local produce that already fetches a premium.

It is a modest top-up, given store prices, but Marquette said farmers want to nurture demand.

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Marquette is expanding beet plantings by one-third, or five acres, claiming much more of his canola field.

Vegetable plantings in Saskatchewan may grow by up to 10 per cent this season, said Bob Purton, president of Saskatchewan Vegetable Growers’ Association.

Purton sells his tomatoes and cucumbers to farmers’ markets and expects the best prices of his 15 years growing vegetables.

In Alberta, carrots’ value topped $5.4 million last year, the highest since 1997.



In Ontario, demand should increase for Canadian apples, peaches and berries from retailers including Loblaw Companies Ltd, Sobeys Inc, Wal Mart Stores Inc and Metro Inc, said John Kelly, executive vice-president of Ontario Vegetable and fruit Growers Association.

The low Canadian dollar could also spur fruit exports to the Usa, he explained.

Federated Co-op has steadily bought more from Saskatchewan farmers in recent years. However the dollar’s slump has added to the urgency, said Mike Furi, manager of procurement and pricing at Federated’s subsidiary, The Grocery People.

Canada’s second-largest grocery chain Sobeys said it can also be buying more from Canadian farmers. Sobeys is hiring four “local developers” in Alberta and British Columbia, whose mission is to find local farmers and vendors.

High grocery prices have ebbed, but another shock might be available, Furi said.

Excessive rains and fluctuating temperatures in California and Florida may tighten supplies of celery, cauliflower and cabbage in March and April, spurring more interest in Canadian produce, Furi said.

“As much as they can grow, we can take.”

? Thomson Reuters 2017

Goldcorp Inc. slashed its dividend and lowered its production guidance for the following 3 years on Thursday as the company tries to maintain a strong balance sheet and faces unexpected problems in an Ontario project.

The stock dropped 13 per cent on Friday in reaction towards the news, closing at $18.73 in Toronto. It had been the worst performer among people in the Bloomberg Americas Mining Index.

The Vancouver-based mining giant moved from a monthly dividend of 2 US cents a share to a quarterly dividend in the same level, effectively reducing the annual payout by two thirds. Goldcorp said this lowered dividend still offers a “competitive” yield, while allowing the organization to invest in its growth projects.

One of these growth projects has already been facing major challenges. Goldcorp removed the Cochenour project from the production guidance for the next 3 years and said the project is re-entering the “advanced exploration” phase.

Cochenour, in Ontario’s Red Lake camp, was supposed to start producing gold last year. But Goldcorp ran into unexpected geologic issues underground that delayed development. By moving the troubled project all the way back to the exploration stage, Goldcorp effectively told the market that there’s still lots of try to do.

Another negative surprise was the Los Filos mine in Mexico, where Goldcorp shrunk the mine life because it moved 5.3 million ounces of low-grade material from its reserves.

With Cochenour out of production guidance, it was not surprising the overall forecast dropped. Goldcorp said it expects to produce between 2.8 and three.A million ounces of gold a year in every of the next 3 years. Previously, the company forecast as much as 3.Six million ounces in 2016, as much as 3.7 million in 2017, and up to 3.4 million in 2018.

“As the new production guidance is disappointing, to all of us it appears grounded in reality,” TD Securities analyst Greg Barnes said in a note.

For the fourth quarter, Goldcorp reported an adjusted loss US$128 million, or US15 cents a share, along with a monster net loss of US$4.3 billion because of impairments. However, the company said it generated free cash flow of US$239 million in Q4 as it produced 909,400 ounces of gold at all-in sustaining costs of US$867 an ounce (excluding inventory impairments).

“In annually marked by continued metal price volatility, we achieved three successive quarters of free income generation as a result of continued focus on lower costs and better margins,” chief executive Chuck Jeannes said inside a statement.

Going forward, Goldcorp hopes to boost production through brownfield expansions at a number of of their mines. The company said these expansions are low risk and provide high rates of return. Barrick Gold Corp. is undertaking a similar strategy.

Gold prices have rallied so far in 2016, and Goldcorp’s stock price is up nearly 35 per cent. Jeannes said the company is “encouraged” by the rally and is “well positioned for future success.”

This was the last quarterly earnings report Jeannes will oversee as CEO. He’s retiring and passing the reins to David Garofalo, who joined the organization from HudBay Minerals Inc. Garofalo gets control as CEO on Monday.

pkoven@postmedia.com

Twitter.com/peterkoven

WASHINGTON – U.S. economic growth slowed in the fourth quarter, but not as sharply as initially thought, with businesses less aggressive in their efforts to reduce unwanted inventory, which could hurt output within the first 3 months of 2016.

Gross domestic product increased at a 1.0 percent annual rate rather than the previously reported 0.7 per cent pace, the Commerce Department said on Friday in its second GDP estimate.

Economists polled by Reuters had expected that fourth-quarter GDP growth could be revised down to a 0.4 per cent pace. The economy grew at a rate of 2.0 percent in the third quarter and expanded 2.4 percent in 2015.

U.S. stock index futures extended gains after the data, while prices of Treasuries fell. The dollar added to gains against a basket of currencies.

Businesses accumulated US$81.7 billion worth of inventory within the fourth quarter as opposed to the US$68.6 billion reported last month. The largest contributors towards the upward revision to inventory investment were retail trade and mining, utilities and construction.

As an effect, inventories subtracted only 0.14 percentage point from GDP growth rather than the previously reported 0.45 percentage point.

The bigger inventory build is bad news for first-quarter GDP growth because it means businesses will have little incentive to place new orders, which will continue to hold down production.

“The weaker drag from inventories within the fourth quarter means that any rebound within the first quarter could be a little more modest than we previously expected,” said Paul Ashworth, chief U.S. economist at Capital Economics in Toronto.

“Nevertheless, it still appears that first-quarter GDP growth is on track to rebound to some very healthy 2.5 per cent annualized or more, that ought to dampen any concerns a good imminent recession.”

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DOWNSIDE RISKS

First-quarter GDP growth estimates are as high as a couple.5 percent rate, however the risks are tilted towards the downside amid slowing world economies, a powerful dollar and a recent global stock market sell-off that has tightened financial market conditions.

Cheap oil has also been a continue the profits of oil field companies for example Schlumberger and Halliburton, prompting them to slash capital expenditure budgets.

The upward revision to fourth-quarter GDP growth also reflected a smaller trade deficit than initially thought as imports contracted. The trade deficit subtracted 0.25 percentage point from GDP growth instead of the 0.47 percentage point reported recently.

Business paying for equipment contracted in a less steep 1.8 percent rate last quarter, when compared to previously reported 2.5 percent rate.

There was a small downward revision to consumer spending, which accounts for a lot more than two thirds of U.S. business activities. Consumer spending rose in a 2.0 percent pace as opposed to the 2.2 per cent rate reported recently.

Unusually mild weather hurt sales of winter apparel in December and undermined demand for heating. But you will find signs consumption acquired in January with the return to more normal winter temperatures.

With gasoline prices around US$2 per gallon, a tightening labor market gradually lifting wages and house prices boosting household wealth, the basic principles for consumer spending remain quite strong.

Business paying for nonresidential structures contracted in a 6.6 percent rate as opposed to the 5.3 percent pace reported recently. Government spending contracted at a 0.1 per cent rate rather than rising in a 0.7 per cent rate.

? Thomson Reuters 2016

A consortium led by Ontario Teachers’ Pension Plan Board and Borealis Infrastructure won antique dealer war to purchase London City Airport for about 2 billion pounds (US$2.8 billion), based on people acquainted with the problem.

The group beat an adversary bid from China’s HNA Group to get the facility from Global Infrastructure Partners, the person said, asking not to be recognized as the deal isn’t public. Cheung Kong Infrastructure Holdings Ltd. had also been thinking about bidding, people acquainted with the problem said Wednesday.

Representatives for GIP and Teachers’ declined to comment, while a representative for Borealis didn’t react to a request comment. An official for HNA Group couldn’t be reached for comment beyond regular business hours.

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The winning bid was reported earlier by the Financial Times.

The airport, located about 6 miles (10 kilometres) from London’s financial district and opened later, was acquired by American International Group Inc. and GIP in 2006. At the time, news reports said the businesses agreed to pay 750 million pounds ($1.04 billion), though terms weren’t disclosed. Two years later, American International sold its stake to GIP and Highstar Capital, which now owns 25 %.

The Canadian-led group will have to be prepared for a political conflict that stands in the way of a planned expansion that will help City serve 6.5 million passengers annually by 2023. London Mayor Boris Johnson vetoed a 250 million-pound plan to add aircraft stands, an arrivals terminal and taxiway last year.

London City Airport handled a record 4.32 million passengers in 2015, 18 percent at least a year earlier, despite the size of aircraft limited by its short runway and noise- curtailment rules requiring steep takeoffs and landings. London Heathrow, Europe’s busiest airport, moved 75 million travelers.
Bloomberg.com