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Bankruptcies to rise
Personal bankruptcies among Canadians are expected to begin rising again this year after falling from the peak of the recession, though the toll will be much milder, Canadian Imperial Bank of Commerce said today.

"The likelihood is that the share of low-paying jobs in the Canadian economy will rise during the course of the year," said Benjamin Tal of CIBC World Markets.

"The soft economic environment suggests that growth rates in forced self-employment and part-time jobs are likely to accelerate in the coming quarters," he said in a new report.

"As well, a projected net decline in public sector employment in 2012 and a much weaker hiring pace in the construction sector will act as a negative for overall income growth in the economy. Accordingly, we project that the insolvency rate in Canada will start trending upward, if only mildly, over the course of the year."

Differentiating between bankruptcies and so-called proposals, a means by which debtors negotiate new terms with their creditors, Mr. Tal noted the decline in personal bankruptcies, based on the latest data. Indeed, the rate of bankruptcy, estimated at 2.8 per 1,000 people, is at its lowest since 1993.

"However, the speed of the decline in the bankruptcy rate since its peak of 2009 exaggerates the real progress in household credit performance," he said.

"Note that in recent years, the number of proposals ... has risen dramatically, with the proposal rate reaching an all-time high in 2011. That's largely due to changes to the Bankruptcy Insolvency Act (BIA) in 2008 with the most significant being the increase in the limit of the size of non-mortgage debt for qualifying for a proposal from $75,000 to $250,000 - making proposals more attractive relative to the bankruptcy route."

The overall insolvency rate, which includes both bankruptcies and proposals, has improved markedly since the slump, but remains a bit above the pre-recession level.

It's not unemployment so much, he said, but rather "the ongoing increase in the share of low-paying jobs" that's a better indicator.

U.S. banks in foreclosure deal
The U.S. government and 49 states announced today what they called the biggest federal-state civil settlement ever, a $25-billion (U.S.) deal "with the nation's five largest mortgage servicers to address mortgage home servicing and foreclosure abuses."

The agreement will see principals reduced and other loans refinanced, and will go some way to correcting the housing market. But for many who lost their homes, an estimated 750,000 of them, according to reports, the amount they're expected to get is about $2,000.

At least $10-billion will go toward cutting principal on mortgages that are either delinquent or at threat of default. Another $3-billion is earmarked for refinancing loans to borrowers who are underwater. Further, $1.5-billion will be put into a fund for people who lost their homes from 2008 through 2011 and who meet certain criteria.

Some $7-billion will go to other forms of relief, and some will go to the governments involved.

Greek leaders strike deal
Greek politicians today agreed to yet another round of austerity measures aimed at securing a further €130-billion in bailout money as it heads toward a crucial March bond redemption.

The agreement struck by the politicians today is reported to include pension cutbacks, a 22-per-cent reduction in the minimum wage and another €3-billion or so in government cost reduction.

There are still questions over details and whether the Greek agreement actually flies, but consider the cost so far.

Already the country has been beset by strikes and protests against previous rounds of austerity meant to try to bring its deficits into line and ease a debt crisis that has raged for two years now, and unions promise more demonstrations. Greece has just entered its fifth year of recession, and unemployment has spiked to almost 21 per cent.

Some observers, though, still see bankruptcy as unavoidable at some point.

"I think it's inevitable that a default will come - whether it's now or later makes no difference," said CMC Markets analyst Michael Hewson.

"Come April and the elections the political landscape could well change radically as incumbent Greek politicians continue to lose support," he told me today. "It's wishful thinking if the Troika think that further spending cuts will put Greece on a sustainable path. The economic data seen this week and this morning shows that the Greek economy is imploding and the appetite for austerity is fast dissipating."

Europeans hold rates
Both the European Central Bank and the Bank of England held their benchmark rates steady today, though the latter boosted its asset-buying program by £50-billion.

The ECB held its key rate at 1 per cent, and said it's seeing tentative signs of stabilization.

Some had expected the central bank to cut interest rates, given the deepening economic troubles in Europe, notably in regions such as Greece and Spain, where unemployment is above 20 per cent.

"While the ECB made no policy changes this month, Draghi didn’t rule out further moves," said senior economist Benjamin Reitzes of BMO Nesbitt Burns.

"However, with economic downside risks no longer 'substantial,'" it looks as though the economic data will need to weaken markedly before any further easing will be considered. The incoming data will be watched closely over the next couple of months, to ensure the recent signs of stabilization are durable."

ISPs not bound by broadcast rules
Canada's Internet service providers aren't bound by the country's broadcast regulations, the Supreme Court of Canada ruled today.

Cultural groups had argued that companies such as BCE Inc. BCE-T and Rogers Communications Inc. RCI.B-T that provide Internet connections to their customers should be considered broadcasters, because they distribute content, The Globe and Mail's Steve Ladurantaye reports.

Manulife swings to loss
Not the best day for Canada's Manulife Financial Corp. MFC-T.

The insurer sank to a fourth-quarter loss of $69-million or 5 cents a share, from a profit of $1.8-billion or $1 a year earlier, taking a $665-million goodwill charge related to the impact of low interest rates on its U.S. business, The Globe and Mail's Tara Perkins reports.

The company also announced that its chief financial officer, Michael Bell, will be leaving. Mr. Bell, who has been with the insurer since the summer of 2009, will be returning to Philadelphia, where he worked before taking the job in Manulife’s Toronto head office, the company said.

Canaccord strikes deal
One of Canada’s biggest investment banks is teaming with a Chinese bank to create a $1-billion (U.S.) fund to invest in Canadian resources companies, an initiative unveiled as part of Prime Minister Stephen Harper’s visit to China, Globe and Mail Streetwise columnist Boyd Erman reports.

Canaccord Financial Inc. CF-T and Import Export Bank of China will create what they call the “Canada-China Natural Resource Fund.” Senior executives from the companies were scheduled signed a memorandum of understanding on the plan with Mr. Harper and Chinese Vice-Premier Li Keqiang present.

BCE boosts profit
BCE Inc. BCE-T, Canada's telecommunications giant, posted a sharply higher fourth-quarter profit of $486-million, boosted by smartphones and last year's takeover of CTV.

The 62 cent-a-share profit was up 53 per cent from a year earlier, though still shy of analysts' forecasts, The Globe and Mail's Simon Avery reports.

Bell Canada’s mobile unit delivered a strong performance in the holiday season, adding 132,000 post-paid customers, who sign contracts for multiple years. Mobile revenue rose 6 per cent, as customers spent 32 per cent more to send more video, images, texts and other data over the airwaves.

BCE also said it expects profit to be flat to slightly higher this year.

"Overall, the results show that competitive pressures in the market are accelerating," said analyst Maher Yaghi of Desjardins. "We view revenue and EBITDA growth in 2012 to be supportive of continued dividend growth."

Shoppers hikes dividend
Canada's Shoppers Drug Mart Corp. SC-T boosted its quarter dividend by 6 per cent today, to 26.5 cents, as it reported gains in fourth-quarter profit, revenue and same-store sales despite feeling the hit from new generic drug rules.

Shoppers profit climbed to $176-million or 82 cents a share from $169-million or 78 cents a year earlier, The Globe and Mail's Marina Strauss reports. Sales climbed 43.3 per cent to $2.6-billion, and presciption sales by 2.8 per cent to just shy of $1.2-billion. Same store-sales, a key measure in the retail industry, rose 3.4 per cent.

"Considering the many challenges that we faced as a Company this past year, I am encouraged by our operating and financial performance," said chief executive officer Domenic Pilla.

Kodak ditches digital cameras
The company that brought the world a camera you could hold in your hand is getting out of the business.

The announcement today by Eastman Kodak Co., which is operating under bankruptcy protection, is one of those moments (no pun intended) given how it succumbed in the digital era.

Kodak said it would phase out its digital camera, pocket video camera and digital picture frame businesses in the first half of the year, to focus instead on brand licencing and printing.

"For some time, Kodak’s strategy has been to improve margins in the capture device business by narrowing our participation in terms of product portfolio, geographies and retail outlets," said chief marketing officer Pradeep Jotwani. "Today’s announcement is the logical extension of that process, given our analysis of the industry trends."

After the restructuring, it said, it expects annual savings of more than $100-million (U.S.).

Air Canada posts loss
Higher fuel costs helped drive Canada's biggest airline to a fourth-quarter loss.

Air Canada AC.B-T today posted a loss of $60-million or 22 cents a share, compared to a profit of $89-million or 27 cents a year earlier. Revenue climbed more than 3 per cent to $2.7-billion as fuel costs surged to more than $800-million.

Separately, The Globe and Mail's Brent Jang reports, the Air Canada Pilots Association today called a strike vote, saying contract talks covering 3,000 pilots have stalled amid management demands for concessions.

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Personal bankruptcies set to start rising again, CIBC says