Hiring climate said to be 'modest' in coming quarter

Canadian employers expect to hire cautiously in the next three months, with job seekers more likely to have success in Western Canada than in Ontario and Quebec, according to a new survey of hiring intentions.

The latest quarterly employment outlook survey from Manpower finds that employers are forecasting only a "modest" hiring climate in the April-to-June period, with new business growth at its weakest level in five months.

Manpower's survey of more than 1,900 employers across Canada found that 16 per cent were planning to increase staffing levels, while four per cent were planning to cut them back.  

The healthiest hiring climate is in the Western provinces, with the rosiest opportunities in the construction, transportation and public utilities sectors.

"However, job growth is expected to be slower in Ontario and Quebec, with limited advances in full-time work expected for the coming quarter," said Manpower Canada vice president Byrne Luft in a statement.

Manpower said hiring intentions nationally fell two percentage points from the previous quarter to nine per cent. That represents a three percentage point drop from the outlook's forecast of a year ago. 

The weakest prospects are among manufacturers of non-durable goods.

Employment figures released last week by Statistics Canada showed a net loss of 7,000 jobs in February, with Quebec shedding 25,500 jobs.

Only 95,000 net new jobs have been created in Canada in the last year — a growth rate that is considered weak by historical standards. Job growth in the last six months has been especially weak. 

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Luxembourg kills EU tax haven crackdown

The Associated Press Posted: Mar 12, 2014 1:40 PM ET Last Updated: Mar 12, 2014 1:40 PM ET

European Union finance ministers failed once again Tuesday to agree on a sweeping new policy to fight tax evasion because of resistance from Luxembourg, a tiny country that long has prospered from a secretive banking culture.

EU Taxation Commissioner Algirdas Semeta said their failure was disappointing because, if approved, the legislation proposing an EU-wide automatic exchange of data on bank deposits would allow governments to "identify and chase up tax evaders."

Luxembourg, a duchy of barely 500,000 people, was able to shelve the legislation for the 28-nation bloc and its 500 million citizens because the decision required unanimous approval at Tuesday's meeting in Brussels.

Luxembourg Finance Minister Pierre Gramegna said he could not vote in favour and pushed the decision to a summit of EU government leaders next week.

Luxembourg has insisted for years it would support the proposed law only if non-EU banking hubs within Europe, particularly Switzerland, also sign up.

But as the EU's negotiations with Switzerland, Liechtenstein and three other nations on signing the agreement have made progress, Luxembourg has responded with new reasons for opposition, chiefly the risk that banks outside Europe would draw deposits away if the continent's banking rules are tightened too much.

German Finance Minister Wolfgang Schaeuble said he was confident that Luxembourg would drop its opposition at next week's summit.

"We've been working on this for such a long time, whether we agree today or in four weeks, that doesn't kill me either," he said.

EU officials say tax fraud and companies' aggressive cross-border tax avoidance schemes cost the bloc's governments an estimated 1 trillion euros ($1.4 trillion) a year, money needed in an age of sluggish growth and high debt across Europe.

The finance ministers did achieve some progress Tuesday. They drafted compromise proposals designed to break a deadlock between EU governments and the European Parliament on how to set up an agency that could restructure or shut down failing banks, the EU's so-called "single resolution mechanism."

The agency is intended to help stabilize the financial system and reduce the risk that taxpayers would have to fund future bank bailouts. Greek Finance Minister Yannis Stournaras said the new proposals sought to address lawmakers' criticisms. He and other finance ministers declined to provide details.

The proposals are to be presented at negotiations with lawmakers Wednesday in Strasbourg, France.

To avoid significant delays in setting up the agency, an agreement between the EU's governments and European Parliament leaders must be reached by the end of March. That would leave time for the legislation to be voted on before the Parliament dissolves for May elections.

Lawmakers have complained that the EU's original proposals gave national governments and regulators too much influence over the rescue authority's decisions, leaving room to play politics and give advantage to their domestic banks.

The new bank-rescue fund would be financed by a levy on banks that would raise 55 billion euros ($75 billion) over 10 years by 2026. However before the fund would be tapped, a failing bank's creditors, including holders of large deposits, would be forced to take losses.

Mar 12, 2014 4:41 PM ET Mar 12, 2014 4:34 PM ET Mar 12, 2014 4:15 PM ET Mar 12, 2014 4:34 PM ET Mar 12, 2014 4:41 PM ET

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GM recall of 1.6M cars prompts lawmaker probe

General Motors faced more pressure over its handling of a deadly defect in certain compact cars Tuesday as word leaked of a criminal investigation and two congressional committees opened probes into the matter.

The Justice Department is investigating whether GM broke any laws with its slow response to a problem with ignition switches in compact cars from model years 2003 to 2007, according to a person briefed on the matter. The probe is being handled by the U.S. Attorney's Office in New York, said the person, who asked not to be identified because the investigation has not been made public.

Spokesmen for the Justice Department and GM would not comment. The investigation was first reported by Bloomberg News.

At issue is why GM waited until February to recall 1.6 million older-model compact cars worldwide (including in Canada), even though it admitted knowing about the problem for a decade. The faulty ignition switches have been linked to 31 crashes and 13 deaths. Committees in the House and Senate also want to know why the government's road safety watchdog, the National Highway Traffic Safety Administration, didn't take action sooner.

GM announced last month it will replace ignition switches that can shut off car motors unexpectedly. When that happens, drivers lose power-assisted steering and brakes and can lose control of the cars. The ignition can slip from the run position to accessory or off, due partly to heavy key chains dangling from the steering column.

Also, if the ignition switch isn't in the run position, air bags may not inflate if a crash occurs.

An Associated Press review of a NHTSA database found that drivers started submitting complaints about the problem in early 2005, shortly after the first Chevrolet Cobalt went on sale. The review of complaints about the Cobalt, GM's top-selling small car in the mid-2000s, found 173 instances of engine stalling or air bags failing to deploy, both symptoms of the ignition problem. Many drivers reported problems with keys sticking in the ignition in addition to the stalling.

Fred Upton of Western Michigan, the chairman of the House committee, said in a statement Monday that a hearing will be held in the coming weeks.

Marketing expert Ken Wong of Queen's University says the damage to GM's reputation is enormous. "[It's] catastrophic, not only because the incident occurred, but because there is substantial evidence that GM was aware of the incident long before it took any corrective action."   

Congress passed legislation in 2000 requiring automakers to report safety problems quickly to NHTSA. The laws came after an investigation into a series of Ford-Firestone tire problems.

Upton said the committee wants to know if GM or the agency missed something that could have flagged the problems sooner.

"If the answer is yes, we must learn how and why this happened, and then determine whether this system of reporting and analyzing complaints that Congress created to save lives is being implemented and working as the law intended," Upton said.

NHTSA has said the rate of problems in the GM cars was not significantly different from similar vehicles.

The prospect of congressional hearings means more bad publicity for GM, which is trying to distance itself from a reputation for building lousy cars. The company has said it's more focused on quality since emerging from bankruptcy protection in 2009.

"It's the old GM haunting the new GM," said Jake Fisher, director of auto testing at Consumer Reports magazine. "They have a lot of the old products still hanging around."

Fisher said GM's new cars and trucks will have to be better than the competition to lure back buyers who swore years ago to never again to buy a GM car.

NHTSA already has demanded information from GM about when it knew of the ignition problem. The agency could fine GM up to $35 million for a delayed response. Automakers must report safety problems to NHTSA within five days of learning about them.

GM said in a statement that it's co-operating with NHTSA and the House committee.

On Feb. 13, GM announced the recall of more than 780,000 Cobalts and Pontiac G5s (model years 2005-2007). Two weeks later it added 842,000 Saturn Ion compacts (2003-2007), and Chevrolet HHR SUVs and Pontiac Solstice and Saturn Sky sports cars (2006-2007).

GM said Monday that it has hired attorney Anton Valukas to investigate the company's actions before the recall. Valukas, who investigated the 2008 collapse of Lehman Brothers for a bankruptcy court. GM has promised an "unvarnished" investigation into the recall.

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