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(February 21, 2007) Lower oil prices will reduce profits in Canada’s oil-extraction industry by almost 30%, according to the Conference Board’s Canadian Industrial Outlook report on the industry.

Despite this substantial reduction in profits, the Conference Board of Canada said that oil industry profits will still remain high, just nowhere near the record levels they were at in 2006.

The report said that oil-extraction industry profits grew by 26.4% in 2006 to reach a record high of $15 billion. The Conference Board predicts that with lower oil prices, profits will drop to around $10.6 billion this year, but it stresses that this is still a very robust profit when put into historical context.

“Rapid production growth and record-high prices led to soaring profits last year,” said Michael Burt, a senior economist with the Conference Board. “But with oil prices down from their 2006 peak, industry profits are expected to weaken this year, before growing again beginning in 2008.”

The report also predicts that oil production in Canada will rise by about 10% in 2007 and remain strong in coming years due to oil sands resources.

The Conference Board does warn that this rate of growth could be stunted by labour and material shortages in Alberta, since fierce competition for both increased the costs of extracting crude oil by 10.4% in 2006.

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Canada’s actuaries get another watchdog group

(February 21, 2007) The Actuarial Standards Oversight Council, which came into existence on January 1, 2007, has officially taken on the role arbiter of that industry’s standards in Canada.

Established by the Canadian Institute of Actuaries, the ASOC adds another check and balance to the industry since it will keep an eye on the activities of the Actuarial Standards Board, which is responsible for the adoption of actuarial standards of practice in Canada.

In a press release, ASOC said that this new model of oversight was designed as a proactive step in response to increased public expectations of accountability and transparency, a reality of the new business environment.

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Canadian Bankers Association names new CEO

(February 21, 2007) The Canadian Bankers Association announced Wednesday the appointment of Nancy Hughes Anthony as president and CEO, effective May 28, 2007. Hughes Anthony will succeed Raymond Protti, who announced his retirement in September 2006, after serving over 10 years in the role.

Hughes Anthony is currently the CEO of the Canadian Chamber of Commerce. Prior to her arrival at the Canadian Chamber in 1998, Hughes Anthony gained senior experience in the federal and provincial governments, as well as in the private sector, having served as a federal deputy minister, a senior advisor to the government of Prince Edward Island and as a corporate vice-president.

“We are extremely pleased that Nancy Hughes Anthony has accepted our offer to lead the Canadian Bankers Association,” said Fred Tomczyk, chair of the CBA’s executive council. “She brings a wealth of experience and an impressive array of dynamic skills and strategic insight. Nancy has exceptional leadership qualities, is familiar with our issues and will be a strong voice for the industry.”

Hughes Anthony said she is honoured to have been asked to take on a role of great national importance. “Canada has a highly competitive and vibrant banking sector,” she said. “Without question, its strength and health is critical to the success of our economy and to the financial goals of Canadians.”

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Advocis chair responds to proposed CSA regulations

(February 21, 2007) Roger McMillan, chair of Advocis, briefly responded on Tuesday to the release of the Canadian Securities Administrators’ proposed National Instrument 31-103 Registration Requirements.

National Instrument 31-103 is designed to create a national framework of security regulations that all of the CSA’s jurisdictions in Canada would be required to follow.

McMillan didn’t comment on the merit of the proposals but, rather, suggested what sort of regulatory framework his organization would like to see.

“At Advocis, we think consumers are best served by professional advisors who adhere to the highest principles of professional and ethical standards,” he said. “A professional platform of designations, supported by codes of conduct, appropriate practice standards, advisor E&O insurance and meaningful continuing education collectively is the consumers’ best guarantee that the individual offering him- or herself out as a financial advisor is a true professional.”

McMillan said the best way to do this is to work with regulatory bodies to develop a “principles-based” system. “Just as we did with the insurance industry, we hope to work with securities commissions and self-regulating organizations toward building a principles-based professional platform that ensures the consumer comes first.”

Advocis said it will continue to examine the proposal and, in consultation with members, issue a detailed response in the near future.

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(02/21/07)