Winnipeg Free Press

Winnipeg Free Press (Newspaper) - January 27, 2015, Winnipeg, Manitoba C M Y K PAGE B6 BUSINESS CITY EDITOR: SHANE MINKIN 204- 697- 7292 I CITY. DESK@ FREEPRESS. MB. CA I MARKET DETAILS B7 I WINNIPEGFREEPRESS. COM TUESDAY, JANUARY 27, 2015 B 6 OTTAWA - The squeeze of the oil slump is prompting one of Canada's biggest banks to slash its 2015 forecast for the country's economy and warn another interest- rate cut could be on the way. TD Bank said Monday it now expects the Canadian economy to grow by just two per cent this year, down from its December projection of 2.3 per cent. It foresees Canadian growth creeping back up to 2.2 per cent in 2016, said a TD report to clients. The big bank's economists also predicted the Bank of Canada will trim its trendsetting interest rate in March by another quarter of a percentage point, to 0.50 per cent. From there, it expects the key rate to remain on hold until the second half of 2016. Last week, the central bank stunned financial markets and observers when it lowered its overnight- rate target by a quarter of a percentage point to 0.75 per cent. Economists had expected the Bank of Canada to hold the rate at one per cent, where it had been since September 2010. But in defending his decision, governor Stephen Poloz pointed a finger at the threat of low oil prices, which he called " unambiguously negative" for the Canadian economy. Poloz indicated the goal of the central bank's rate drop was to provide " insurance" against the risks cheaper oil poses to Canada's inflation and financial stability. " Those who hoped to return to greater market calm after the holidays have been sorely disappointed," said the TD report. " The drop in the prices of oil has gone further and been more protracted than anyone predicted only a few short months ago." The price of oil, which has been trading in the neighbourhood of US$ 45 per barrel, is less than half of where it was last summer, a change blamed on oversupply and a slowdown in the global economy. TD expects the U. S. benchmark price - West Texas Intermediate - will average US$ 47 this year before climbing back up to US$ 65 in 2016. Only a month ago, the bank forecast WTI to average US$ 68 in 2015 and US$ 80 next year. The weaker outlook for oil prices has also " dimmed" the bank's prediction for the Canadian dollar, trading Monday at just over 80 cents US. TD now expects the loonie to continue its fall into 2016, hitting a low of 75 cents US early in the year before starting to move back up. The report also underlined other impacts of low oil prices, which it says will save the average Canadian household nearly $ 900 at the gas pumps this year. Additional consequences include job losses in the country's oil- producing regions, where housing markets are also expected to suffer a blow. On top of that, TD predicted government revenues in these energy- rich provinces - Alberta, Saskatchewan and Newfoundland and Labrador - to feel the pain of lower crude. TD projected Alberta's 2015 real gross domestic product to grow by 0.5 per cent compared with its December forecast of 2.3 per cent, while Saskatchewan is expected to grow by 1.3 per cent compared with an earlier forecast of 1.7 per cent. Newfoundland's economy is forecast to shrink by 1.2 per cent compared with growth of 0.3 per cent. In the span of a month, the bank dropped Alberta from its third- place ranking, in terms of expected growth among the provinces, to ninth. On the other hand, the bank increased its projections for non- oil- producing regions. For example, Ontario's 2015 outlook rose to 2.8 from 2.6 per cent. At the federal level, Ottawa has also been bracing itself for lower revenues as a result of lower oil prices. The Harper government recently made the unusual decision of postponing the federal budget until at least April. - The Canadian Press T HE body of its biggest competitor is barely cold, but Walmart Canada isn't holding back on its expansion plans in Winnipeg. The world's largest retailer is preparing to open the doors to its newest ' Supercentre,' a 160,000- square- foot location that will feature both general merchandise and groceries. When the ribbon is cut Thursday, it will be the first tenant in the Grant Park Pavilions development, a 24- hectare site bordered by Taylor Avenue, Pembina Highway and the CN railway tracks. " They're stocking the shelves right now," said John Pearson, a broker at Shindico Realty Inc./ IC& I Properties, which owns the Grant Park Pavilions. The store is just a few hundred metres away from the soon- to- be liquidating Target store at Grant Park Shopping Centre. " Coincidentally, it happens to be excellent timing from Walmart's perspective with Target closing. Walmart is opening with a brand- new fresh store where Target was converting stores to what they thought would work," he said. " Walmart is very entrenched in Canada with a well- seasoned store and distribution system." Shindico is also a co- developer on the land where Target's Polo Park store will soon be mothballed. Open for just three months, it's the shortest length of time a retailer has operated out of a new building in Winnipeg, he said. No announcements on what retailer will take over the space are imminent, he said. " We are pursuing alternative replacement occupants," he said. It will take several years until the $ 200- million, mixed- use development at Grant Park Pavilions is fully occupied, but when it is, Pearson said, it will include large- format retail, smaller retail, restaurants, office space, apartments and possibly seniors housing. He said he doesn't have a timetable for when its second tenant will open its doors. " We have various things in play. It will be as soon as possible," he said. There will also be 18 pathways for bikes and pedestrians and buses can also be accommodated. " You can live, work and play, all on the same site," Pearson said. geoff. kirbyson@ freepress. mb. ca TORONTO - Cineplex Entertainment is looking beyond Hollywood with a new concept that combines arcade games and live performances. The country's biggest movie theatre chain said Monday it plans to launch the Rec Room later this year in Edmonton as part of a pilot project that will ramp up to a bigger expansion. Each location will have space for a restaurant and bar as well as an array of entertainment options, such as an arcade and an auditorium for comedians and live music. The company is also considering other games such as bowling, billiards and ping pong. The idea is in the vein of restaurant and arcade chains in the United States such as Latitude 360 and Dave and Buster's. " When you look at Canada, we really don't have a location- based social environment where people can game, have a meal, watch ( sports), all of those kinds of things that create a destination," chief executive Ellis Jacob said in an interview. " It allows us to capitalize on our strength, from our infrastructure to the assets we've built up." The first Rec Room will open late this year adjacent to an existing Cineplex theatre at the South Edmonton Common shopping centre. Another 10 to 15 locations will follow in major cities across the country over the next several years, though they won't necessarily be next to a movie theatre, Jacob said. Cineplex already operates 18 Xscape Entertainment Centres with popular arcade games and billiards. Some of the locations also have lounges with liquor licences. What makes the Rec Room different is the broader game and food selection and the large digital screens, Jacob said. He hopes Cineplex can tap into the rising popularity of video game tournaments on the big screen, where audiences gather to battle each other playing Xbox 360 and PlayStation 4 games. Cineplex also owns an advertising business and premium- priced movie theatres. The company has been focused on diversifying its business to lessen the impact of the volatile movie industry, which thrives on blockbuster hits but falters when a big movie tanks. - The Canadian Press Oil slump fuelling slashed forecast TD Bank warns of further rate hike By Andy Blatchford By David Friend Cineplex ups the entertainment ante with Rec Room PHIL HOSSACK / WINNIPEG FREE PRESS Workers are putting the finishing touches on the Walmart Supercentre on Taylor Avenue. The store opens Thursday. LOWE'S CANADA is the most likely candidate to snap up some of Target's Winnipeg locations when the U. S. retail giant withdraws from the Canadian market within the next four to five months, one industry observer said Monday. " That's my gut ( feeling)," Field Agent Canada general manager Jeff Doucette said in an interview Monday after the firm released a business analysis of which big- box chains might be interested in Target's 133 retail locations. Among the chains it looked at were Lowe's, Walmart, Costco, Canadian Tire and Loblaws/ Real Canadian Superstore. " Of any of those, they ( Lowe's) are really the ones who are best positioned to take the biggest chunk ( of Target stores)," Doucette said. He noted Lowe's already has stores in the other three western provinces and in Ontario, but none in Manitoba. " So Winnipeg is sort of along the way, and they already have the supply chain set up. So it's not a big stretch, I don't think, that maybe one of two of those ( Winnipeg) properties could go to Lowe's." Target rocked the Canadian retail sector on Jan. 15 when it announced it would be closing down its money- losing operations in Canada less than two years after entering the market by acquiring the bulk of the Zellers locations in the country. Since then, there has been plenty of speculation, but little concrete evidence, of who might be interested in taking over the Target sites here and elsewhere. Target's four Winnipeg stores are in the Kildonan Place, Grant Park, and Southdale shopping centres, and in the Plaza at Polo Park retail/ office development under construction on the former football stadium site at Polo Park. It also has a store in the Shoppers Mall in Brandon. A Lowe's Canada spokeswoman confirmed in an interview the 37- store chain plans to open 25 new stores over the next three years. But she wouldn't say if any of them are likely to be in Manitoba. " Until we have a real estate deal in place, which applies to any location we plan on opening in, we're not able to speak to these sites," Sandy Indig said. " But we have our growth plan in place and have the markets we are looking to open in, and once there is a deal in place... we will be in a position where we will be able to share that information." Doucette wondered if one of Lowe's competitors in Canada - Rona Inc. - also might be interested in some Target locations here and elsewhere in Canada. He noted Rona has said it wants to open some more stores this year in Canada. However, a Rona spokesman was also being coy Monday about whether the company is interested in any Target sites here. " Like any other retailer, probably, we are looking at that ( Target locations across Canada) as an opportunity..." the spokesman said. " But I can't confirm anything more at this point in time... and I can't specify geographically which ones are on our radar." murray. mcneill@ freepress. mb. ca One door closes, another opens New Walmart set to welcome customers By Geoff Kirbyson Big- box chain Lowe's could replace Targets here By Murray McNeill JOE BRYKSA / WINNIPEG FREE PRESS FILES The Plaza at Polo Park Target opened in October. ' The drop in the prices of oil has gone further and been more protracted than anyone predicted only a few short months ago' ' It's not a big stretch, I don't think, that maybe one of two of those ( Winnipeg) properties could go to Lowe's' B_ 06_ Jan- 27- 15_ FP_ 01. indd B6 1/ 26/ 15 8: 31: 19 PM ;