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Construction slowdown looms VIRGINIA GALT Globe and Mail Update August 7, 2008 at 6:22 PM EDT The head of construction powerhouse EllisDon said Thursday he is “very wary and very concerned” about where the Canadian economy is going. “I am worried right across the country that things are tightening up and that a year from now we are going to see a drop-off,” Geoff Smith, the company's president and chief executive officer said in an interview after Statistics Canada reported that the total value of building permits fell 5.3 per cent in June to $6.3-billion. Economists had projected a decline in the value of building permits issued in June, but not of the magnitude that Statistics Canada reported. The consensus had been for a 1 per cent drop Mr. Smith expressed concern for the construction industry as a whole Thursday, although EllisDon has not yet experienced a drop in demand for the heavy construction in which it specializes. “Over the short term, we [at EllisDon] are still seeing a reasonably healthy market. A lot of that is in public sector work and infrastructure rebuilding work,” he said. “But I certainly understand that once you get outside of that space, the big hospital and infrastructure spending, that things are quite tight in the industry,” Mr. Smith said. Statscan reported Thursday that the slowdown in the residential sector resulted in a month-to-month decline of 4.4 per cent to $3.6-billion in June. And in the non-residential sector, the value of permits decreased by 6.6 per cent to $2.8-billion, due to declines in industrial and commercial building intentions, Statscan reported. Mr. Smith said major commercial and industrial customers are being “more careful” about committing to new projects. However, the outlook is not nearly as bleak as in the 1990s, “where things just dried up very dramatically,” he said. The market is cooling, but new projects are still being planned, added Sandy McNair, president of Toronto-based Altus InSite, which conducts market research for governments, lenders, building managers and the heavy construction industry. “No-one's gone crazy and thinking they are going to start 30 new buildings tomorrow. But on the other hand, there is no sense that the sky is falling and our world is about to end either,” Mr. McNair said. Toronto-Dominion Bank economist Millan Mulraine said in a research note that the decline in the value of building permits was broad-based – and “on a city-by-city comparison, the report was fairly ugly.” The value of permits issued in Montreal was down 12.1 per cent, in Calgary down 15.2 per cent, in Vancouver down 13.4 per cent and in Saskatoon down 16.7 per cent, Mr. Mulraine wrote, adding that the overall value of building permits is now 9.1 per cent lower than in the corresponding period last year. Merrill Lynch economist David Wolf said in an economic report Thursday that Canada's housing market is entering a “sustained downturn” and he expects Canadian home builders to pull back “substantially” in response. Bank of Montreal economists had expected June building permits to decline 3.1 per cent, “as the housing market continues to cool and non-residential intentions retrace part of the prior month's massive gain,” the bank said in a research note. The steepest decline occurred in Ontario, where the value of building permits was down 7.9 per cent to $2.3-billion, due mainly to a 15.8 per cent decline in plans for non-residential buildings, Statscan said. The decline in Ontario's residential sector was 1.7 per cent. Alberta posted a 7.5 per cent decline, due to a 19.6 per cent drop in the residential sector. British Columbia and New Brunswick also experienced declines in both the residential and non-residential sectors, Statscan said. “In contrast, intentions rose 3.5 per cent in Quebec, with gains in both the residential and non-residential sectors.” Overall, there was a slight increase in the value of permits issued for single-family residences – up 1.8 per cent to $2.3-billion. But there was a sharp drop in the value of permits issued for multiple-family dwellings. “Municipalities issued $1.3-billion worth of permits for multi-family housing in June, down 13.8 per cent, a second consecutive monthly decrease. Most of these declines occurred in Ontario and Alberta,” Statscan said. “It is now becoming clear that the Canadian housing market is continuing to cool, as the level of activity moderates to more sustainable levels,” the TD Bank said in its research note. “And we expected this correction to continue at a measured and orderly pace.” Mr. McNair said the month-to-month data on non-residential building activity tends to be “lumpy” because these tend to be larger projects “and the decisions don't get made evenly spread out across the 12 months of the year.” There is “a reasonable level of activity going on across the country” right now, he said. “Edmonton has never had more construction activity in 20 years in terms of office building activity. Calgary is extremely active as well. Toronto has a healthy level of construction activity going on right now. Ottawa, even Montreal, have a healthy level of activity under way,” Mr. McNair said. “They have got their permits and they are building them out.” Mr. McNair said the residential sector appears to be stable as well, although construction activity is moderating from the rapid pace of the past few years. “It [residential] is moderating, but it's not going over a cliff the way it has in the United States,” he said. Comme si c`était surprenant que Montreal aille bien..... Globe and mail cr**

Canadian Commercial Paper Plan Likely to Be Approved By Joe Schneider June 3 (Bloomberg) -- A Canadian judge will probably approve a plan to convert C$32 billion ($31.8 billion) of frozen commercial paper to new notes by the end of the week, though court appeals may keep investors waiting months to get their money back. ``I will have a decision with reasons by Friday,'' Ontario Superior Court Judge Colin Campbell said at the end of a hearing in Toronto today. ``I'll approve,'' unless there's something in his notes that convinces him to change his mind, the judge said. Lawyers representing some of the noteholders have already indicated they plan to appeal Campbell's ruling once it comes out. Some investors object to the plan's limitations on lawsuits targeted at the banks and brokers that sold the paper, which hasn't traded since August. James Woods, who represents 18 companies that want to sue including pharmacy chain Jean Coutu Group Inc., said if the judge rules as he indicated, his group will likely file to the Court of Appeal. ``If we find fraud against banks that are not ABCP dealers, there is no recourse,'' Woods said, urging the judge to reject the proposal at today's hearing. ``It's inconceivable.'' New notes may be issued as early as the end of June if there are no appeals, said Purdy Crawford, a lawyer who led a group of foreign and Canadian banks and pension funds that drafted the proposal. All appeals must be exhausted before the notes are issued, he said. Quick Appeal ``We can't close until we get the sanction,'' Crawford told reporters. ``I am assured by our lawyers that the Court of Appeal will agree to an expedited hearing.'' The insolvent asset-backed paper hasn't traded since August, when investors shunned the debt on concerns about links to high-risk mortgage loans in the U.S. A group of foreign banks as well as Canadian lenders and pension funds led by Caisse de Depot et Placement du Quebec negotiated the so-called Montreal Proposal in August. The plan would convert the insolvent 30- to 90-day debt into new notes maturing within nine years. Banks agreed to provide funding to back the new notes on the condition that they be given immunity from any lawsuits stemming from the sale of the notes. Campbell said in a May 16 ruling he wasn't satisfied protection from lawsuits over potentially criminal conduct such as fraud was fair, and he delayed approval. The banks agreed to change the plan to allow limited suits under certain conditions within nine weeks following the plan's approval. Possible Fraud Campbell criticized the lawyers opposing the plan for failing to provide examples of potential outstanding fraud. ``So we defeat the plan on the off chance that there is something out there?'' Campbell asked. Once the new notes are issued, investors can hold them to maturity or try to trade them in the secondary market. Some clients of Canaccord Capital Inc. will be paid in full for their debt, under an agreement announced by the Vancouver-based brokerage in April. The case is Between the Investors Represented on the Pan- Canadian Investors Committee for Third-Party Structured Asset- Backed Commercial Paper and Metcalfe & Mansfield Alternative Investments II Corp., 08-CL-7740, Ontario Superior Court of Justice (Toronto). To contact the reporters on this story: Joe Schneider in Toronto at jschneider5@bloomberg.net. http://www.bloomberg.com/index.html?Intro=intro3

New broom sweeping Montreal clean INGRID PERITZ June 8, 2007 MONTREAL -- In Montreal this spring, a new army of enforcers is taking command of the streets and spreading fear in back alleys. They're tough, eagle-eyed - and armed with big brooms. The city in Canada best known for its insouciance and laissez-faire ways is suddenly aspiring to be Singapore on the St. Lawrence. This year, Montreal has declared war on trash. Besieged by criticism that downtown had become an open-air dump of litter and bulging trash bins, city hall made a clean sweep of it by adopting a bylaw on "civility, respect and cleanliness." Since last Friday, property owners downtown have become responsible for cleaning up in front of their homes and businesses. Fines start at $125 and reach $4,000 for repeat offenders. "This is probably the toughest bylaw of its kind in Canada, if not North America," said Benoît Labonté, mayor of Montreal's downtown borough. "There are no warnings, just tickets for violations. We mean business." Mr. Labonté has scheduled a news conference this morning to reveal the fruits of the new crackdown: In just seven days, the city's "trash troopers" issued about $70,000 in fines. Montreal was inspired by cities like New York and Paris, which turned around their notoriously unkempt appearance in a few years, Mr. Labonté said in an interview yesterday. "If it's good enough for New York and Paris, it's good enough for Montreal." Montreal has always had anti-trash rules on the books, but it put muscle this year into applying them: Ten more trash inspectors downtown, 189 young "cleanliness brigadiers," as well as 1,400 new garbage bins, 700 ashtrays and four solar-powered trash compactors valued at $4,700 apiece. Some people worry Montreal will get so clean it will be antiseptic. And the more cynical wonder if Mayor Gérald Tremblay isn't picking an easy target because it's a lot tougher to solve intractable problems like his woeful revenue sources. Still, many agree the city had let cleanliness slide in recent years, and civic pride with it. Complaints mounted about overflowing garbage cans, oozing back-alley dumpsters, and cigarette butts outside office buildings after no-smoking rules went into effect. "We'd let things go in the last few years, and it was visible," said Claude Rainville, head of a business development group in Montreal's Latin Quarter. "The industrial quantities of butts. The trash containers. It just wasn't welcoming." And the tough anti-litter talk isn't the only effort aimed at making Montrealers less unruly. Montreal police last year added 133 officers to its traffic squad to curb the notoriously bad habits of city drivers, cyclists and pedestrians. In the first four months of this year, police issued nearly 3,500 tickets for jaywalking, and plan to crack down on the habit through the summer, said Chief Inspector Réjean Toutant. "I understand that this is part of Montreal's culture. But that's no reason to let things go," he said. No smoking, no jaywalking, no littering - is Montreal losing its joie de vivre? Éric Montpetit, a political scientist at the University of Montreal, studied the city's litter problems and said the new efforts are long overdue. But the trash crackdown does appear to fit into a larger pattern. "Montrealers have long been the exception in Canada. We've been less disciplined and maybe a little less polite. But that wild side is also part of the city's charm," said Prof. Montpetit, who has lived in Ontario and Saskatchewan. Now, the efforts at behaviour reform may signal a shift. "Maybe," he said, "we're starting to Canadianize Montrealers."