THE WEEK AHEAD
HBC reports its financial results, Trump faces a test and the world watches ‘Maple Leaf Economics.’
1. Diversify or die Friday’s Labour Force Survey, released by Statscan, may confirm a lesson from last month’s numbers about the blessings of a diversified economy. B.C. and Alberta, for instance, are a tale of two provinces: B.C., the only province with significant job creation in the latest period, boasts strength in exports, tourism, real estate and film production. By contrast, Alberta, whose February jobless rate jumped to 7.9 per cent (the national rate is 7.3 per cent), remains too single-suited a resource economy for thousands of laid-off oilpatch workers to find jobs elsewhere in the Wild Rose economy.
2. Will HBC ever become a money machine? You have to wonder. Since taking control of North America’s oldest retailer, the U.S. investor group running Hudson’s Bay Co., which reports earnings on Monday, has tacked onto HBC about half a dozen additional banners. Earlier this year, the ever-acquisitive HBC bought online retailer Gilt, which should ideally place HBC in the forefront of apparel e-commerce. Yet despite strongholds in North America (Saks Fifth Avenue, Lord & Taylor) and Europe (Germany’s Galleria Kaufhof; Galleria INNO, Belgium’s only department store group; and sportswear emporium Sportsarena), HBC’s profitability is meagre. The firm returned to profit last year, but with a net profit margin of just 0.04 per cent. And losses in 2013 and 2014 mean HBC has a net loss of $56 million to show for its past three years of acquisitiveness.
3. Our economy commands world interest While the world’s regions of stagnant or subpar economic growth are mostly in fiscal retreat or holding the line on government stimulus, Canada is a rare exception determinedly choosing the opposite course. In earlier times, that would have drawn scorn from the International Monetary Fund and other fiscal prudes. But that isn’t happening. Instead, even the Economist, ideologically fixated with balanced budgets, accepts that the new Trudeau govern- ment is trying to “maintain Canada’s commitment to globalization, but to give it a human face.” Well, yes. The popularity of today’s epidemic of demagogues, from Donald Trump to Scandinavia’s anti-immigrant Finn First Party, derives from family incomes that haven’t budged, in real terms, for more than three decades, even as tuition, prescription-drugs and other costs have soared. In a Toronto speech Friday on deficitfinanced support of the Canadian middle class, Bill Morneau, the federal finance minister, will make his case that deficit-financed economic stimulus today will translate into surpluses by decade’s end. “Maple Leaf Economics” will come into vogue if that’s indeed the outcome, in place of the shock austerity measures that have failed from Britain to Greece.
4. The Trump quandary One of the last key primaries in the current U.S. presidential election cycle will find Donald Trump’s support tested in Wisconsin. The keenest observers will be watching to see how Trump fares in the two Wisconsins, blue-collar Milwaukee and the dairyland that makes up the rest of the mid-sized state. If the cityslicker-mogul Trump brand goes over well in each, the GOP establishment will cast about even more feverishly for an anti-Trump to crown in July at a brokered Republican nominating convention — a first in modern history. Trouble is, the three most obvious anti-Trumps are in various ways wanting. It’s true that Mitt Romney, as Trump has said, is “a loser.” The young Wisconsinite Paul Ryan, Speaker of the U.S. House of Representatives and an Ayn Rand acolyte, would chase moderates in the November general election into the Hillary Clinton camp. And Michael Bloomberg, who has indicated an interest in the presidency, might have proved his merit as a business tycoon (far more than Trump has) and a competent big city mayor (Gotham, of course), but is too centrist for the rabble of Tea Partiers at the convention to countenance. What matters here for Canada is that, Democrat or Republican, to get elected to U.S. public office this year requires candidates to be anti-trade, a worrisome thing for the Mexicans and Canadians who are, respectively, America’s largest and second-largest trade partners. dolive@thestar.ca