Oil, TSX, loonie plunge
Oil prices plunged more than 5 per cent Monday taking equities and the Canadian dollar with them.
Markets weighed the continued refusal of the OPEC member nations to cut output along with the likely slowdown in demand during 2016. West Texas Crude hit levels not seen since 2009.
The main index of the Toronto Stock Exchange closed more than 2 per cent lower and the loonie fell more than 1 per cent against the dollar.
Elsewhere, Wall Street also fell, although far less than the TSX; Asian markets had closed before oil’s dramatic fall and closed mixed. European markets which are less exposed to oil prices than North America closed largely higher.
The S&P/TSX Composite Index closed down 315.9 (2.37 per cent)
The Dow Jones closed down 117.1 (0.66 per cent)
Oil is trending lower (Brent $40.77, WTI $37.73 at 4.10pm)
Gold is trending lower (1072.30 at 4.10pm)
The loonie is valued at U$0.7399
Finance Minister sets out tax changes
The federal finance minister spoke Monday to set out the government’s plans on proposed tax changes. The Liberals made an election pledge to cut middle-earners’ taxes and add more of the burden on high earners. Bill Morneau told the Commons that the changes will take effect on Jan 1 2016 and will mean those earning between $45,282 and $90,563 will pay tax at a 20.5 per cent rate rather than the current 22 per cent. Those who make more than $200,000 a year will face a new 33 per cent tax rate.
Staples, Office Depot cannot merge say regulators
A proposed merger between office supply firms Staples and Office Depot owner Grand & Toy may not be possible after regulators in Canada and the US blocked a deal. The combined firm would have more than 80 per cent of the Canadian market according to The Competition Bureau. US regulators have also blocked the merger south of the border. The firms say they will challenge the regulators’ decisions in a bid to proceed with the $6.3 billion merger announced in February.
Canada can impose tariffs on US meat
A World Trade Organisation panel says that Canada and Mexico can impose tariffs on US meat imports. Canadian meat producers want the US to repeal rules meaning that meat must be labelled with the country of origin. If the US does not, then Canada can now impose $1 billion in tariffs on US imports. It is about a third of the amount that than the panel was asked to approve and may not be required if the US Senate approves the repeal which passed a vote in the House of Representatives.
CP could opt for higher offer for Norfolk Southern
Canadian Pacific will hold a conference call Tuesday with chief executive Hunter Harrison being joined by activist investor Bill Ackman, a signal that the rail firm may be planning to increase its offer for Norfolk Southern. The US firm rejected CP’s $28 billion offer as too low when it was offered last month.