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These are stories Report on Business is following Thursday, Feb. 12, 2015.

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Slump hits hard
Canada's oil patch is under attack.

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Canadian energy companies are cutting their budgets and slashing jobs, while the provincial government in Alberta digs in for a long siege.

Today, Cenovus Energy Inc. said it would cut 15 per cent of its work force, or about 800 jobs, as it posted a swelling loss sparked by the rout in the oil market.

At the same time, Precision Drilling Inc. and Husky Energy Inc. also cited the hit from the collapse in crude prices.

"The decline in oil prices over the past eight months has been severe and swift and the energy industry is rapidly adjusting to a lower oil price environment," said Kevin Neveu, Precision's chief executive officer.

"The clearest picture of this adjustment is in the reported North America industry rig count declines, which we expect will continue in the near term," he added, warning that 2015 is "likely to be the most challenging year our industry has experienced this decade."

As The Globe and Mail's Justin Giovannetti reports, this came just a day after the government of Alberta Premier Jim Prentice announced a 9-per-cent cut to programs.

Cenovus, which twice now has cut its spending plans as crude continued to slump, posted a loss of $472-million, or 62 cents a share, compared to the loss of $58-million or 8 cents a year earlier.

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Excluding one-time hits, its profit rose to $590-million or 78 cents from $212-million or 28 cents.

"These are challenging times for the oil and gas industry," said chief executive officer Brian Ferguson.

"Cenovus is taking steps to ensure we remain strong during this market downturn," he added as he announced plans to cut jobs, largely from its contract work force.

Pay hikes have been "suspended for 2015" while Cenovus also cuts "discretionary spending, including spending on travel, conferences, offsite meetings and information technology upgrades," the company said.

Precision Drilling, in turn, lost $114-million in its fourth quarter, or 39 cents a share, tumbling from a profit of $68-million or 24 cents a year earlier.

"Industry downturns are difficult for all, but they affect our rig crews more than anybody else," said Precision's Mr. Neveu.

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"Each one of our active rigs is crewed by 20 or 25 skilled and trained Precision field hands and at this time last year we had nearly 250 rigs running and today we have less than 200."

Husky, meanwhile, cut its spending plans today, trimming its budget to about $3-billion from $3.4-billion "primarily related to the rescheduling of discretionary activities in Western Canada and other initiatives."

Husky also tumbled to a quarterly loss of $603-million, or 65 cents a share, diluted, from a profit of $177-million or 18 cents a year earlier.

Excluding one-time hits, profit was $147-million.

"In addition, about $400-600 million in operating cost efficiencies has been targeted, in large part through procurement and contract savings to be realized over the course of the year," Husky said.

"This will include more effective partnering with suppliers, consolidation and standardization in services."

It doesn't stop there.

Genworth MI Canada Inc., the country's biggest private mortgage insurer, warned today that it expects to see increasing losses on its Alberta mortgages.

And as The Globe and Mail's Tamsin McMahon reports, it's looking more closely at new applications.

Economists have cut their forecasts for economic growth in Alberta, once Canada's leader, home sales have plunged, and some see a recession looming with a spike in unemployment, possibly as high as 6.8 per cent. And according to one calculation, each direct oil job in Canada indirectly supports to three others.

Bombardier moves forcefully
A dramatic overhaul is under way at Canada's Bombardier Inc.

As The Globe and Mail's Bertrand Marotte reports today, the global plane and train maker today unveiled a series of executive, corporate and financial moves as it reported a huge fourth-quarter loss amid delays and rising costs for its C Series jet.

First off, Pierre Beaudoin is stepping down as chief executive officer as his father, Laurent, retires as chairman. Taking over is Alain Bellemare, a former executive at United Technologies Corp.

There's also the potential for the sale of some business operations, the company said.

Bombardier also cut its dividend and announced plans to tap debt markets for up to $1.5-billion (U.S.), at the same time issuing some $600-million in equity.

The company lost $1.6-billion, or 92 cents a share, in the fourth quarter, compared to a profit of $97-million or 5 cents a year earlier.

Earnings flood in
From mining to phones, Canadian corporate earnings are rolling out fast today.

Sweden cuts
It's getting increasingly 'negative' out there.

Sweden's Riksbank today became the latest central bank to go negative, moving its benchmark rate to -0.1 per cent from zero and launching a quantitative easing program.

"The recovery in the world as a whole is expected to continue in the years immediately ahead, although at a slow rate," the central bank said.

"Oil prices have fallen, which is positive for global growth but it also leads to low global inflation," it added.

"Economic activity also differs from region to region. This is reflected in increased differences in monetary policy between, for example, the United States and the euro area, and in significant fluctuations on the foreign-exchange markets. Recent developments in Greece also contribute to the uncertainty."

Prices up
Canadian home prices are rising, but at a slower pace.

Prices rose 0.2 per cent in January from December, according to the Teranet-National Bank home price index released today.

That also cancelled out December's decline but, the statement noted, prices rose in just five of 11 markets measured.

Not only that, but the year-over-year increase of 4.7 per cent marked the third month in a row of slower gains.

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About the Author
Report on Business News Editor

Michael Babad is a Report on Business editor and co-author of three business books. He has been with Report on Business for several years, and has also been a reporter and editor at The Toronto Star, The Financial Post and United Press International. His articles have appeared in major newspapers around the world. More

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