Briefly:

(December 12, 2003) The Ontario Securities Commission (OSC) has received the final report of its Regulatory Burden Task Force (RBTF), which was launched in October 2001. The RBTF reports that the OSC has raised the level of satisfaction among its stakeholders from its 2000 rating of “B to B plus” in 2000 to an “A minus” in 2001.

The survey brought forward numerous suggestions, some of which have already been addressed.

“Keeping in mind that the interviews were completed in September 2002, we have already had time to act on some of the comments received by the task force,” said David Brown, chair of the OSC. “In fact, we have addressed over 20% of the comments to date and are well on our way to addressing a further 25%. A good majority of the remaining recommendations need further study before we can decide how or if we will implement them.”

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Goodale named federal finance minister

(December 12, 2003) As predicted by many, new Prime Minister Paul Martin has named Saskatchewan’s Ralph Goodale as his finance minister. The 54-year-old Goodale has a reputation as a fiscal conservative.

Goodale replaces John Manley in the key post at a time when the economy is struggling to recover from several external shocks. While Canada had been leading GDP growth in the G-7, the country is now lagging.

Other key economic cabinet postings announced today include Jim Peterson as trade and investment minister, Denis Paradis as minister of state for financial institutions and Lucienne Robillard as industry minister.

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Canadian consumer confidence grows

(December 11, 2003) Consumer confidence has hit a record high in Canada, according to a survey by Decima Research. The Decima-Investors Group Index of Canadian Consumer Confidence hit 93.4, up 7.9 points since August.

“This optimism about personal financial well-being cuts across all age groups and suggests growing confidence sparked by the number of jobs in the economy and the strong performance of the stock market,” said Charles Feaver, vice-president of research for Investors Group.

The index is designed to match the University of Michigan’s Index of Consumer Sentiment, which measures optimism in the U.S. That index rose 4.4 points to 93.7 in November.

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Canadians ‘scared’ of their debt

(December 10, 2003) While many Canadians say the thought of carrying debt scares them, the average consumer in this country has taken on 18% more debt since 1999, according to a survey by Ipsos-Reid for Scotiabank.

The report says 71% of Canadians will try to pay down some of their debt in 2003, but that they would have a hard time making debt payments if one person in the household lost their job.

“My advice to Canadians would be to recognize that, while low interest rates create an opportunity to borrow at a lower cost, it is advisable to manage your debt during these times,” said Alberta Cefis, executive vice-president of retail lending services for Scotiabank.

The survey found the average household debt has risen from $56,700 in 1999 to $66,900 in 2003.

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Mystery shoppers study banks

(December 10, 2003) The Financial Consumer Agency of Canada (FCAC) has released the results of its “mystery shopper” examination of over 1,600 financial institutions. The program was initiated to study how well clients are informed by their institutions.

The FCAC mystery shoppers found 95% of branches they examined supplied information on cashing government cheques free of charge, but only 42.3% supplied information on interest rates and frequency of interest payments.

“Mystery shopping is a tool we use to get a sense of what information is available to consumers when they go into a bank branch,” explains FCAC commissioner Bill Knight. “The more information consumers have, the better financial decisions they will make.”

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BMO: GICs a good hedge against inflation

(December 10, 2003) The Bank of Montreal has released the results of a study which it says proves GICs protect investors from inflation. Conventional wisdom has held that such products pay interest at rates too low to compensate for the erosion of purchasing power.

“Based on BMO Economics’ comprehensive study, which analyzed 32 years of data on GIC returns, the common myth regarding the lack of inflation protection offered by GICs has been put to bed,” said Julie Sheen, vice-president of BMO term investments. “Consumers should look to GICs as an excellent, secure and reliable way to beat inflation and bolster purchasing power.”

The study claimed interest rates posted since 1971 made up for inflation more than three-quarters of the years surveyed and 100% of the time since 1996.

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MFDA transforms board

(December 9, 2003) The MFDA has completed the enhancements to its corporate governance structure required to be recognized as a self-regulatory organization (SRO) by the securities commissions in Alberta, B.C., Ontario, Saskatchewan and Nova Scotia.

Included in these modifications, the MFDA now has the required board of 13 directors, with six members from the industry and six public members. Also required was that four directors come from regions outside of Ontario and Quebec, and that five of the six industry directors be officers of MFDA member firms.

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Fed leaves rates unchanged

(December 9, 2003) The U.S. Federal Reserve has announced it will leave the trend setting federal funds rate unchanged, following the December meeting of the Federal Open Market Committee.

A statement issued by the committee read, “The committee continues to believe that an accommodative stance of monetary policy, coupled with robust underlying growth in productivity, is providing important ongoing support to economic activity.”

The committee characterized upside and downside risks as “roughly equal,” indicating that neither inflation nor disinflation posed a dominant threat to the U.S. economy.

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SEC probes Sun Life unit

(December 8, 2003) The ever-widening mutual fund scandal in the United States has hit a subsidiary of Canada’s Sun Life Financial.

The insurance giant issued a press release today, stating that its U.S. mutual fund arm, Massachusetts Financial Services, (MFS) is the subject of a U.S. Securities and Exchange Commission (SEC) “enforcement action.” Sun Life holds a 93% stake in MFS.

The SEC is alleging that the disclosure in certain MFS prospectuses concerning market timing was “false, misleading and a breach of fiduciary duty,” Sun Life said.

“The SEC notice contains no allegations that any MFS employee was knowingly involved in either late trading or inappropriate personal trading in MFS funds,” the statement concluded.

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Canadian economy poised for solid growth, says Dodge

(December 8, 2003) The Canadian economy is picking up steam as 2003 draws to a close, says the governor of the Bank of Canada. Dodge expects the economy to grow at annualized rate of at least 4% in the fourth quarter.

“Remember that the U.S. economy grew at an annualized rate of about 8% in the third quarter, and Canadian exporters should see some benefit from this and from the continuing strong growth expected in the U.S. economy over the months ahead,” Dodge said in a speech today in London, Ontario.

However, Dodge stressed that the soaring loonie remains a source of “major uncertainty” for the economy.

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IPC Financial reports 2003 losses

(December 8, 2003) IPC Financial Network is reporting lower profits and revenues for fiscal 2003. IPC lost $16.8 million in 2003, compared to a $12 million loss in 2002, and 2003 revenues fell to $86 million from $88 million the previous year.

“Fiscal 2003 was undoubtedly a difficult and challenging year,” IPC said in a release, citing the sluggish U.S. economy and the soaring Canadian dollar.

“Closer to home, the company was distracted for almost two-thirds of its fiscal year as it tried to close a publicly announced strategic transaction with Dundee Wealth Management,” IPC said. That deal was terminated in May.

IPC spent the remainder of fiscal 2003 restructuring and CEO Steve Meehan says those efforts are paying off. “We are seeing strong positive gains in all aspects of our business,” he said. “Revenues, EBITDA and net earnings are all recording strong positive growth and management believes this trend will continue throughout fiscal 2004.”

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(12/08/03)