Skip to main content
top business

Some of the things that intrigued, pleased and horrified us in 2012:

Business news story of the year
The national angst over the housing market and swollen consumer debt has to top the list.

How many times did we hear Mark Carney and Jim Flaherty warn us that it has to stop? That interest rates will rise at some point? That another economic shock will lay waste to the family budget?

Still, the level of household credit market debt to disposable income now stands at a record 164.6 per cent. Credit growth may have slowed, but, as of the third quarter of the year, was still outpacing income growth.

After months of warnings, Mr. Carney and his colleagues at the Bank of Canada went so far as to warn they could raise interest rates from their emergency lows to try to tame the borrowing binge, citing debt levels as the biggest domestic threat to the Canadian economy.

Mr. Flaherty, concerned over debt, a frothy housing market, and a particularly bubbly Toronto condo scene, went as far as to bring in another round of mortgage restrictions in July.

By late in the year, the housing market had cooled markedly, amid projections it will slow down even more.

As of November, according to the Teranet-National Bank home price index, prices across the country were up by 3.3 per cent from a year earlier, but that marked the 12th consecutive month of slowing increases. And for November alone, prices were down 0.4 per cent from October. On the selling side, according to the Canadian Real Estate Association, sales were down almost 12 per cent in November from a year earlier.

What are we doing with all our borrowed money? Enjoying ourselves, apparently.

Economists Douglas Porter and Sal Guatieri at BMO Nesbitt Burns have found something of a "positive correlation" between consumer debt and happiness in developed countries.

Denmark, they note, has a debt-to-income ratio of 300 per cent, and, according to the United Nations, is the "happiest" country in the world.

The Danes aren't alone. According to BMO's findings from the UN World Happiness Report and debt measures, fellow borrowers in the Netherlands, Ireland, Switzerland and Norway are both deeper in debt and happier than we are.

(For BMO's research, see accompanying infographic or click here.)

Marriage of the year
Mark Zuckerberg married Priscilla Chan in mid-May, just a day after taking Facebook public on a Friday at $38 (U.S.) a share in a troubled launch. The shares actually gained all of 23 cents that first day, only to tumble on the Monday (after the wedding) in one of the most celebrated flops ever, costing Mr. Zuckerberg some $2-billion in losses. (Not tonight, dear.)

Surprise of the year
Why was Mark Carney's decision to quit the Bank of Canada for the Bank of England the year's biggest surprise? Because he said he'd never do it. Ever. Really.

Mr. Carney, it turns out, was being courted by the Liberal Party and the British government at just about the same time. By all accounts, he was stalked by George Osborne, Chancellor of the Exchequer, until he just couldn't say no.

In November, he announced his decision to quit as governor of the Bank of Canada before his term is up and jump to the Bank of England, an institution more than three centuries old.

Mr. Carney's star had been rising. Credited with leading Canada through the financial crisis and global recession, he was also named chief of the Financial Stability Board.

He's certain to bring a refreshing new approach to the Old Lady of Threadneedle, as the Bank of England is known.

Most fun story of the year whether or not it's true
Justin Bieber apparently wants to know why he's not as special as John Pierpont Morgan. According to the New York Post, the pop star and his entourage showed up at New York's SPiN, Susan Sarandon's ping pong club, one evening in late November. They got a private room, but the singer reportedly got all huffy when warned they'd have to get out later in the evening because J.P. Morgan had booked a private party. As the Post tells it, the young man wanted to know: "Why does he get the room and not us?"

(New York magazine later reported that a spokeswoman for JPMorgan Chase & Co. said the bank was sorry for the confusion and that "Justin is welcome to play ping pong with us anytime."

Longest-running story of the year
It was almost exactly one year ago that the 27 leaders of the European Union warned in a statement that "there are no quick fixes" but that "we must do more to get Europe out of the crisis."

Actually, this is going to be the longest-running story of the decade, but Europe did make big strides in 2012, bringing some stability to Greece and other countries, and agreeing to a new supervisory regime for the embattled region's banks.

Several of the countries in the 17-member monetary union are in recession, hobbled by high unemployment and widespread social unrest amid severe austerity measures, some of them tied to their international bailouts.

By late in the year, unemployment in the euro zone stood at 11.7 per cent, and in the broader EU at 10.7 per cent. Individual countries, notably Greece at 25 per cent and Spain at 26 per cent, fared far worse.

The straight numbers are troubling: In the EU, almost 26 million people can't find work, and almost 19 million of those are in the euro zone.

And in some countries, again notably Greece and Spain, unemployment is rampant among young people.

Greece, the focus of the debt crisis, has become a land of tears, with many struggling to make ends meet.

The forecasts aren't promising, either. The European Commission now projects that the EU will see economic growth of just 0.5 per cent in 2013, with no growth in the euro zone. Greece's economy is projected to shrink by a further 4.2 per cent, while Spain is forecast to slump by a further 1.9 per cent.

The other longest-running story of the year
It was almost exactly one year ago that Thorsten Heins became the new chief at Research In Motion Ltd., replacing the long-time duo of Jim Balsillie and Mike Lazaridis.

Now, he's headed toward what analysts see as the make-or-break launch of RIM's new BlackBerry 10 in late January.

RIM has had one of the most troubled years for a public company, its stock falling and rising on every analyst downgrade or upgrade and deteriorating earnings report, amid worrisome questions about the future of the Waterloo, Ont., smartphone manufacturer.

Its market share has slumped amid heated competition with the likes of the iPhone from Apple Inc., the Android system from Google Inc. and the offerings of Samsung.

RIM's stock is well down from the heady days of well over $100, when the BlackBerry ruled.

The new devices have been getting good reviews, and some analysts are seeing greater-than-expected support from carriers and a strong marketing effort. RIM even managed to beat the estimates of analysts with its latest quarterly results.

Terms of endearment of the year
1. Libor. Short for London Interbank Offered Rate. One of the world's key rates, it's really fun to play with.

2. Fifty Shades of Grey. It's actually mega-selling mommy porn, not the inside story of SNC-Lavalin Group.

3. Right to work. Or, as President Barack Obama defined it, the right to work for less money. Its full meaning is the right to work without being forced to pay union dues, and laws to this effect are now in force in several states, the latest being Michigan.

4. QE3. Short for the Fed's third round of the asset-buying scheme known as quantitative easing. AKA printing money.

5. Muppets. Oscar, Elmo, Kermit, Miss Piggy, those two old guys, and clients of Goldman Sachs.

6. Greece + possible exit from the euro zone = Grexit.

7. Britain + possible exit from the EU = Brexit.

8. Troika. The trio of the International Monetary Fund, EU and European Central Bank behind the bailout of Athens, whose inspectors have spent so much time going over its books that their eyes must be swollen.

9. Fiscal cliff. The term made popular by Fed chief Ben Bernanke in reference to a combination of tax hikes and spending cuts set to come into effect Jan. 1 unless a budget deal is reached among squabbling U.S. politicians.

10. London Whale. The JPMorgan Chase trader whose whacko bets cost the bank billions.

11. Forty-seven per cent. That portion of Americans who Mitt Romney deems worthless bums who wouldn't have voted for him anyway. Actually, his share of the popular vote was just about 47 per cent.

12. Bunga bunga. I'm still not sure exactly what it means. Wikipedia's a little unclear, too. But it has something to do with what Silvio Berlusconi was doing as Italy collapsed around him.

13. HELOC. Home equity line of credit, something that sends shivers up Jim Flaherty's spine.

14. Nein. Angela Merkel's favourite word whenever anyone else had a costly idea to save the euro zone.

The learn-to-be-nice lesson of the year
BCE Inc. really, really didn't like it when Canada's broadcast regulator rejected its $3-billion takeover of Astral Media Inc., appealing to the federal cabinet what it called an "appalling" decision in the fall.

It took a different approach when it came back for round two in November, making nice with the Canadian Radio-television and Telecommunications Commission, amid suggestions by sources that it could pull in its dominant horns and sell the bulk of Astral's English-language TV properties.

Not-the-smartest PR move of the year
Normally, beer marketing types would love to see a picture of someone holding their brew aloft in the media. But not when it's a man accused in a Montreal slaying. Like the one the Montreal Gazette published on its website in the summer, complete with a bottle of Labatt Blue. Labatt's answer? Make legal threats against the paper to replace the image. And spark a huge discussion over Facebook and Twitter that, presumably, didn't help.

Battle of the year
Rarely has the Canadian business establishment seen a fight the likes of the one Bill Ackman waged against Canadian Pacific Railway Ltd.

The activist chief of Pershing Square Capital Management, having become the railway's biggest shareholder, pressed the company for change, both operationally and at its helm, wanting to replace CEO Fred Green with Hunter Harrison, the former chief of rival Canadian National.

Mr. Ackman's proxy battle led to Mr. Green's departure and the installation of Mr. Harrison, who late in the year unveiled plans to slash 4,500 positions and dump unnecessary assets and businesses.

Mr. Green resigned just hours before the railway's mid-May annual meeting, and several directors chose not to try again for the board.

Sexist moment of the year
What do the four men who preceded Virginia Rometty as CEO of IBM all have in common? They got to be members of the Augusta National Golf Club, befitting the company's role as a major sponsor of the Masters. So what made the new CEO, Ms. Rometty, different from her four successors? There's a joke to be had about golf and balls, but for the serious nature of the April incident. IBM is known for diversity and equality, yet, as far we know, failed to press the point with the elite, male-only club.

Non-sexist moment of the year
The board of directors of Yahoo Inc. set a new standard, and struck a blow for women in the corner office, by naming Marissa Mayer as CEO in mid-July. When she was six months pregnant.

Takeover rules of the year
There was only one, and it was a long time coming: Hands off the oil sands.

Amid a controversy over foreign state-owned enterprises, the federal government decided to allow China's CNOOC Ltd. to buy Nexen Inc. for $15-billion, and Malaysia's Petronas to acquire Progress Energy Resources Corp.

But after the Nexen deal, Prime Minister Stephen Harper declared that so-called SOEs won't be allowed majority control of an oil sands player unless the circumstances are exceptional.

Mr. Harper said there are issues surrounding the intentions of SOEs beyond strictly commercial as he unveiled new thresholds.

The government stressed that Canada remains open to foreign money, and that such companies can still invest in the oil sands. They just can't take out a major player like Nexen.

(One wonders if General Motors is considered a state-owned enterprise.)

Ridiculous comment of the year
"Anyone looking at the record of approvals for certain major projects across Canada cannot help but come to the conclusion that many of these projects have been delayed too long. In many cases, these projects would create thousands upon thousands of jobs for Canadians, yet they can take years to get started due to the slow, complex and cumbersome regulatory process. For example, the Mackenzie Valley Gas Pipeline review took more than nine years to complete. In comparison, the western expansion of the nation-building Canadian Pacific Railway under Sir John A. Macdonald took four years."

So said Canada's Natural Resources Minister, Joe Oliver, in early January, referring to environmentalists and "other radical groups."

One wonders if Mr. Oliver remembered the words of his own prime minister, who, in June, 2006, apologized for what occurred during that nation-building effort with these words:

"Beginning in 1881, over 15,000 of these Chinese pioneers became involved in the most important nation-building enterprise in Canadian history – the construction of the Canadian Pacific Railway … The conditions under which these men worked were at best harsh, and at times impossible: tragically, some 1,000 Chinese labourers died building the CPR."

Smart move of the year
For Finance Minister Jim Flaherty, the penny dropped. In his March budget, Mr. Flaherty announced plans to kill the penny, and several well-known phrases with it. Pennies are useless and "take up too much space on our dressers at home," he declared.

"Due to inflation, the penny's purchasing power has eroded over the years," the government said. "Today it retains only about one-20th of its original purchasing power. Given its declining purchasing value, some Canadians consider the penny more of a nuisance than a useful coin. We often store them in jars, throw them away in water fountains, or refuse them as change."

In cash transactions, prices will be rounded up or down, though the cent still exists in other things like cheques and credit payments. And, of course, the GST and HST will be calculated to the penny and added to the price. Only the total gets rounded.

Whatever will Mr. Flaherty now call his penny-pinching colleague Tony Clement, the Treasury Board president charged with cutting government costs?

Most interesting cosmetic surgery offer of the year
Dr. Robert Sigal of the Austin-Weston Center for Cosmetic Surgery got some press time with his "FaceTime Facelift," designed to make you look your best with Apple's iPhone and iPad FaceTime function.

Winners of the year
1. The European Union. What do you get when you put 27 bickering leaders in a room? The Nobel Peace Prize.

2. Mark Carney, the Bank of Canada governor who jumped ship. Not only is he now at the helm of a 300-year-old institution, he's also going to get almost £1-million in total compensation when he takes the job next July. Mr. Carney gets £480,000 a year in annual salary, £160,000 in lieu of pension, and, because it ain't just Rockcliffe, a £250,000 housing allowance. The British press had some sport with Mr. Carney's pay package. As The Guardian put it, he's "laughing all the way to the Bank."

3. Justin Trudeau, who now doesn't have to go up against Mr. Carney for the Liberal leadership.

4. Justin Wolfers and Betsey Stevenson, the ultra-cool professors at the Wharton School. They're a couple, with a daughter, and are oft quoted and published. Mr. Wolfers is also one heck of a witty guy. He's the one who started the #FedValentines rage on Twitter in February and, in late December, had some fun with the Mayan Apocalypse, with tweets like this: #EndOfTheWorldEconfessions: Sometimes I make the implicit price deflator explicit.

5. Bill Ackman, who, like Bill Gates, now has his very own life-size Canadian railway.

6. The loonie. Everyone wants one, with the exception of the Icelanders. The Canadian currency, expected to run above parity with the U.S. dollar through next year, was recently added, along with the Aussie dollar, to a key IMF list of reserve currencies.

7. Jim Flaherty, as Canada easily held on to its triple-A credit rating, though he has taken to gloating publicly every time the IMF, S&P or Moody's says something nice.

8. Italy's Monte dei Paschi di Siena Bank. Formed in 1472 and said to be the world's oldest bank, it made it through the war between Volterra and Florence, the Italian Plague of 1629 and the 1703 Apennine earthquakes. And even in the face of the euro crisis, it's still standing.

9. Murray Edwards, chairman of Canadian Natural Resources Ltd. and part-owner of the Calgary Flames who got what he wanted when Prime Minister Stephen Harper put the fence around the oil sands. His influence was such that Forbes called Mr. Edwards "the most important billionaire in Canada."

Losers of the year
1. Here's what the world's lawyers must be thinking: Thank goodness for the bankers. From JPMorgan Chase's "London Whale" to the huge U.S. settlement on abusive mortgage practices to the still unfolding Libor scandal, global banks in 2012 just couldn't seem to rub off the stain that has persisted since the financial crisis.

2. Aaron Regent, replaced as CEO of Barrick Gold Corp. in early June amid a stagnant stock price.

3. Tye Burt, the Kinross Gold Corp. CEO whose departure followed two months later, also amid a slumping stock price.

4. Western Canada Select oil, which, because of pipeline promises is selling at a massive discount to the two benchmarks, West Texas Intermediate and Brent, costing Canada an estimated $2.5-billion a month.

5. Twinkie lovers.

6. Murray Edwards is actually on both lists. His Calgary Flames have been locked out since mid-September.

7. Vancouver homeowners. Many economists believe Canada's housing market is headed for a soft landing. That is, Canada's housing market when you exclude Vancouver.

8. Walt Disney's Rich Ross, who left the company after the disaster that was the film John Carter. Should have stuck to princesses and mermaids.

9. James Doak, the Megantic Asset Management money manager who tried to stop the NDP's successful campaign to tax Ontario's rich by likening it to "ethnic cleansing" in a column in the National Post. It happened to be published on the anniversary of the liberation of Auschwitz-Birkenau, the day recognized internationally to remember those murdered in the "ethnic cleansing" that was the Holocaust.

10. Australia's surfwear icon Billabong International. Haaaaaahhhhhhhhhh, wipeout.

Strategic asset of the year
Given that we lost Mark Carney, how about Rona Inc.? Quebec seems to think it needs to keep a hardware store chain out of foreign hands.

Best use of the Muppets. Ever.
'Muppet' took on a whole new meaning when Greg Smith quit as head of the Goldman Sachs equity derivatives business in Europe, Africa and the Middle East, with a scathing Op-Ed piece in The New York Times about the bank's culture. His resignation went viral – "I can honestly say that the environment now is as toxic and destructive as I have ever seen it" - particularly his comment of how some at Goldman referred to their clients as "muppets."

Most questionable use of a Muppet relative
Mitt Romney, in the Oct. 3 presidential debate, to moderator Jim Lehrer of PBS: "I'm going to stop the subsidy to PBS. I'm going to stop other things. I like PBS. I love Big Bird. I actually like you, too. But I'm not going to keep on spending money on things to borrow money from China to pay for it."

The you'll-be-sorry moment of the year
Some people in Iceland began calling for the adoption of the loonie, only to be shot down by the central bank, which studied a range of currencies and deemed the Canadian dollar a "poor choice."

Worst forecast of the year
If you're reading this ... the call on Mayan Apocalypse was way off consensus.

Report an editorial error

Report a technical issue

Editorial code of conduct

Tickers mentioned in this story

Study and track financial data on any traded entity: click to open the full quote page. Data updated as of 19/04/24 2:23pm EDT.

SymbolName% changeLast
BCE-T
BCE Inc
+0.92%44.75
CP-T
Canadian Pacific Kansas City Ltd
+0.43%116.09
ABX-T
Barrick Gold Corp
+0.47%23.49
K-T
Kinross Gold Corp
+4.01%9.33

Interact with The Globe