Hello, hello. Shari Kulha here, today marking Statistics Canada’s 100th birthday. StatCan (its proper abbreviation) actually came into being in 1971, but the agency had begun in 1918 as the Dominion Bureau of Statistics (DomStat?), responsible for censuses. Some numbers from then: the population was 8.6 million; the top industries were mining, manufacturing, agriculture and forest products (118 million pounds of copper and 189 million bushels of wheat were produced); the average monthly salary for a telegraph operator was $70, a loaf of bread cost a dime, and a dozen eggs sold for 35 cents. I raise my cup of $5 coffee to you, StatCan.
TAKE YOUR TAKEOVER
The Chinese takeover of Aecon was blocked yesterday on security grounds, prompting China’s ambassador to Canada to say Ottawa was being too “sensitive” about Chinese capital flows. Jesse Snyder reports that the $1.5B proposal by China Communications Construction to buy the Canadian construction firm last year led Canada to investigate whether a takeover would impact our defence capabilities or create the potential for proprietary technologies to be transferred outside of Canada.
NO LONGER A VOLKS WAGEN
The price of Tesla’s Model 3 — pitched as US$35,000 car for the masses — has ballooned to US$78,000 because Elon Musk had to add luxury features to raise badly needed cash. Shipping a minimum-cost Model 3 now “would cause Tesla to lose money and die,” Musk said. The new dual-motor, all-wheel-drive performance Model 3 version will have a top speed of 155mph, a 310-mile range and acceleration from standstill to 60 mph in 3.5 seconds.
Markets establish an equilibrium between demand and supply, William Watson writes, and where prices stay far higher than costs, supply is being restricted. In the Canadian housing market, a new house costs a shocking 50% more than the cost to build it — thanks to government restrictions on supply, in the form of zoning laws, greenbelts, development charges and delay-causing permitting. This means markets are not responding the way they should.
When — if — Saudi Aramco’s IPO finally happens, Canadian oil investors may be in for a painful correction, David Dias writes. The IPO could burst the very bubble it’s helping create (Brent crude has risen 20% in two months) — putting newly viable oilsands projects in jeopardy. Aramco may be worth US$1.5 trillion; the Saudis may sell up to 5% of its equity, worth about US$75 billion, which would easily make it the biggest IPO in history.
BUT NOT FOREVER
Brent crude got all the attention after spot prices hit US$80 a barrel last week. But it’s important to watch the unheralded five-year forward price; some investors are betting the “lower for longer” price mantra is all but over. So forget about oil at US$80. Here’s the real measure of where crude prices are going.