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(October 30, 2007) If the financial industry needs more proof that the country needs a single regulator, then it should take a close look at a new study by the Queen’s School of Business. The report reveals that many publicly traded Canadian firms aren’t disclosing the results of “evaluations that assess the design of their own financial safeguards against fraud.”

The damning report says the Canadian regulatory system “severely lags” behind that of the U.S. in enforcing compliance efficiently and on a regular basis.

According to the study, companies on the Canadian Venture Exchange are “far more” likely to “withhold voluntary disclosures and ignore basic reporting requirements than those listed on the Toronto Stock Exchange.”

“While we are not advocates of mimicking the American system of over-detailed regulation, legalistic enforcement and a tick box mentality, we have consistently advocated a strong, principled made-in-Canada system,” says professor Steve Salterio, who led the research at Queen’s School of Business. “Unfortunately, what we have is a made-in-Canada mess.”

The study looked at 158 Canadian firms that are listed on both U.S. and Canadian exchanges and 199 Canadian companies that are only listed on either the TSX or the Venture Exchange. The results show that only a minority of businesses are voluntarily disclosing results of a mandatory evaluation on the design effectiveness of their own internal controls. In the States, companies are required to disclose the evaluation.

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Higher wages expected in the west

(October 30, 2007) Non-unionized Canadians can expect a wage increase in 2008, according to the Conference Board of Canada’s 26th annual survey of Canadian organizations.

The report says paycheques should increase by 3.9% next year, with the highest increases going to employees in the west, particularly labour-strapped Alberta.

“The shortage of workers in Alberta is creating a ripple effect, putting upward pressure on wages across the country,” said Prem Benimadhu, vice-president, governance and human resources management, for the Conference Board. “As a consequence, attracting and retaining talent is the number one priority for compensation and human resource leaders.”

In Alberta, wages are expected to rise, on average, 5.2%, while workers in Saskatchewan and Manitoba will see their pay jump by 4.6%. B.C. employees should expect a 4.2% increase.

The story in the east is far different, with Quebec, Ontario and the Atlantic provinces expecting increases below the national average.

In terms of what industry will fork up the most cash for wage increases, oil and gas take that prize. The Conference Board is projecting increases of 5.7% in 2008.

Above-average wage hikes are also expected in construction, natural resources and the transportation and utilities sectors.

It’s expected that the communications and services sectors will see the lowest average increase at 3.1%.

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Net worth on the rise for wealthy

(October 30, 2007) The net worth of Canada’s middle-class and upper-income earners has shot higher over the past four years, according to a survey by MoneySense magazine.

In the All-Canadian Wealth Report in this month’s MoneySense, Canadians have been divided into five groups of equal population, according to their net worth. In November 2003 — the last time the magazine did the study — the middle 20% of Canadians had a net worth of between $65,900 and $169,000. This year, the group ranges from $92,400 to $244,300.

The entry point for the top 20% has risen from $380,600 in 2003 to $656,700 in 2007.

But while the wealthiest Canadians have enjoyed a surge in their net worth, the poorest are racking up huge piles of debt. On average, families under the age of 35 owe $39 for every $100 in assets. The average debt level for all families is 14% of assets. The good news is that families over the age of 65 owe just $2 per $100 in assets.

The study also found that the median annual paycheque in Canada is $26,300, while the top 20% earn at least $56,500.

(10/30/07)