Canadian Pacific, HudBay Minerals, Magna: Canada Equity Preview

The following is a list of companies whose shares may have unusual price changes in Canadian markets today. This preview includes news that broke after markets closed on May 11. Symbols are in parentheses after company names and prices are from the last close.

The Standard & Poor's/TSX Composite Index on May 11 rose 150.69, or 1.1 percent, to a record 14,003.82 in Toronto.

Canadian Pacific Railway Ltd. (CP CN): The nation's second- biggest railroad said that its maintenance workers are poised to walk off the job on Wednesday. The Calgary-based company is deploying managers to maintain services during the strike, according to a statement released on the CNS news wire. The shares gained C$1.20, or 1.7 percent, to C$74.09

HudBay Minerals Inc. (HBM CN): The zinc miner was downgraded to ``neutral'' from ``buy'' by analyst Tony Lesiak at UBS. The shares lost 42 cents, or 1.6 percent, to C$25.55.

Magna International Inc. (MG/A CN): Canada's biggest car- parts maker was unsuccessful in its bid with partner Onex Corp. (OCX CN) for DaimlerChrysler AG's money-losing Chrysler unit. Private-equity firm Cerberus Capital Management LP will buy 80.1 percent of Chrysler for $7.4 billion, DaimlerChrysler said today in a statement.

Magna shares fell 15 cents, or 0.2 percent, to C$93.50. Onex gained C$1.16, or 3 percent, to C$40.01.

To contact the reporter on this story: John Kipphoff in Toronto at
.

Canada Firms Unexpectedly Shed 5,200 Workers in April (Update3)

Canadian employers unexpectedly shed 5,200 jobs in April, the first drop in eight months, led by manufacturers and financial-services companies.

The jobless rate stayed at a three-decade low of 6.1 percent as people left the workforce, Statistics Canada said today in Ottawa. Economists predicted 19,000 new jobs for April and a 6.1 percent jobless rate, based on the median of 25 and 26 estimates in Bloomberg News survey.

The drop marks a pause in the longest succession of job gains since a 15-month streak during 2002-2003. Bank of Canada Governor David Dodge, who has kept the country's main lending rate at 4.25 percent for almost a year, said last month that domestic demand will be the economy's ``primary engine of growth'' this year.

``Our hunch was right that after six months of unsustainably strong job growth, we would see a bit of a payback,'' said Ted Carmichael, chief economist at J.P. Morgan Securities in Toronto. Carmichael made the closest forecast, predicting no change in employment, and said doesn't see a negative trend developing. ``I don't think it changes the picture that the economy is doing well,'' he said.

Previous job gains, including 54,900 in March and 88,900 in January, led Canadians with new paychecks to drive home prices to record highs and offset a narrowing international trade surplus.

The Canadian dollar was little changed at 4:10 p.m. in Toronto, from 90 cents late yesterday.

The yield on the banker's acceptance contract due in September fell 3 basis points to 4.41 percent on the Montreal Exchange today, suggesting fewer investors speculate the central bank will raise its benchmark rate by then.

Central Bank

J.P. Morgan's Carmichael said he expects the central bank to raise rates in September and that today's report didn't alter his views.

Companies shed 14,900 full-time workers and added 9,700 part-time jobs in April. No economist surveyed by Bloomberg News had predicted a decline in overall employment.

Workers aged 15 to 24 suffered most from the drop, with 10,100 losing their jobs. The unemployment rate for that group rose to 11.5 percent, from 11 percent in March.

Wage Growth

Average hourly wages rose 2.9 percent from a year earlier, faster than March's 2.2 percent pace, Statistics Canada said. Wage growth accelerated as companies hired 12,100 workers in the oil-rich western province of Alberta, where an energy boom has led to labor shortages.

Canada's core inflation rate, which excludes eight volatile items and some taxes, slowed to 2.3 percent in March from a year earlier, after reaching a four-year high of 2.4 percent in February, Statistics Canada said April 19. Overall inflation accelerated to 2.3 percent from 2 percent.

Quebec, the central Canadian province where many of the country's struggling manufacturers and lumber exporters are based, added 10,900 jobs, pushing its unemployment rate to a 33-year low of 7.2 percent.

Canada has added about 1.9 million jobs since 2001, in a country of 32.8 million people, as companies earn record profits from exports of commodities such as energy and metals. The job growth has stoked record homebuilding and consumer spending.

U.S. Jobs

Job growth in the U.S. fell to its lowest level in more than two years in April, as payroll losses spread from struggling homebuilders and factories to retailers. The month's 88,000 new jobs followed a gain of 177,000 in March that was smaller than first estimated, the Labor Department said May 4 in Washington. The U.S. jobless rate rose to 4.5 percent from 4.4 percent, which matched a five-year low, and wage growth slowed.

Canadian factories shed 18,600 workers in April and financial firms such as banks and insurers fired 17,200 employees, the statistics agency said.

Still, retailers and wholesalers added 20,100 jobs in April, while utilities hired 11,200 people and hospitals put 11,800 new workers on their payrolls.

The labor force shrank by 2,600 in April, pushing the participation rate down to 67.6 percent, from 67.7 percent in March.

To contact the reporter on this story: Alexandre Deslongchamps in Ottawa at
.

Bernier Will Wait for Ministry's Advice on Alcan Bid (Update1)

Canadian Industry Minister Maxime
Bernier said he'll wait for recommendations from his ministry
before determining whether to allow Alcoa Inc.'s acquisition of
Montreal-based Alcan Inc.

Bernier can block the bid, which would be the country's
biggest takeover ever, if he determines it wouldn't provide
``net benefits'' to Canada's economy, such as more productivity
and research and development. Under current law, the department
has as many as 45 days to review the proposed transaction,
unless the government and Alcoa agree to extend the period.

``We want to be sure that each investment we have in this
country must be at the net benefit for this country,'' Bernier
told reporters today in Ottawa. ``I'm going to receive a
recommendation by my department on that, so we'll see.''

The Alcoa offer came amid growing concern among
politicians and some investors that too many firms in Canada
are being acquired by foreign competitors. The bid for Alcan
brings to almost 600 the number of announced foreign takeovers
in the past 16 months, worth a combined $156 billion, according
to Bloomberg data. That compares with just $43 billion in 2005.

While Quebec Industry Minister Raymond Bachand said
earlier this week that Alcoa may lose subsidies if jobs are
lost, Bernier hasn't commented on the bid, citing the
investment law's ``confidentiality provisions.''

Bernier also declined comment when asked today whether he
has any problems with foreign acquisitions in general.

Primary Metals

Alcoa promised May 7 to invest $5 billion in facilities
across Quebec, establish headquarters for the company's primary
metals unit in Montreal, and move some research and development
operations to the province.

The company, whose Canadian unit already has about 5,000
employees in Quebec and posted $3 billion in revenue last year,
said it would keep head offices in New York and Montreal, and
would list its shares on the Toronto Stock Exchange.

Alcoa, the world's largest aluminum producer, said May 7
that it will offer $26.9 billion in cash and stock for Alcan to
become more competitive against rivals around the world. Alcoa
received financing commitments for $30 billion of loans for the
purchase, according to a regulatory filing.

To contact the reporter on this story:
Theophilos Argitis in Ottawa at
;
Alexandre Deslongchamps in Ottawa at
.

Canada's Dollar Reaches 8-Month High as Commodity Prices Rise

The Canadian dollar rose to an eight-
month high as the prices of some of the nation's commodities
exports climbed.

The Canadian currency also gained on speculation
international investors will purchase Canadian companies,
boosting demand for the currency. Bank of Canada Governor David
Dodge suggested this week that the central bank won't use
interest rates to slow the currency's appreciation after it
gained 5.5 percent against the U.S. dollar this year.

``Oil prices have stabilized, supporting the Canadian
dollar,'' said Matthew Strauss, a currency strategist at RBC
Capital Markets in Toronto. ``Speculation of several sizable
acquisition deals also pushed the Canadian dollar even higher.''

The Canadian dollar traded at 90.61 U.S. cents at 8:36 a.m.
in Toronto, from 90.28 U.S. cents yesterday, and reached the
highest since Sept. 1. One U.S. dollar buys C$1.1036.

To contact the reporter on this story:
Ye Xie in New York at

Canada's Dollar Rises on Manufacturing Expectations, U.S. GDP

Canada's dollar approached a seven-
month high, after a government survey showed factories expect
increased production in the second quarter and the U.S. gross
domestic product started the year below economists'
expectations.

Canada's currency is headed for its sixth straight weekly
gain after a quarterly survey of 3,000 managers by Statistics
Canada in Ottawa showed 22 percent of manufacturers predicted
higher output, a 4 percentage point rise from January.

``That report was a positive for the Canadian dollar,''
said Sal Guatieri, senior economist at BMO Capital Markets in
Toronto.

The Canadian dollar has gained 0.7 percent this week, to
89.65 U.S. cents at 12:11 p.m. in Toronto, rising from 89.15
U.S. cents yesterday. Earlier today, the dollar reached 89.85,
the highest since Sept. 29. One U.S. dollar buys C$1.1155.

The Canadian dollar strengthened against all 16 most
actively traded currencies.

The production report added to speculation the Bank of
Canada may need to raise its benchmark lending rate between
banks later this year to curb inflation. It has stood at 4.25
percent since May 24.

The central bank said in a statement earlier this week that
inflation will peak at about 2.8 percent in the fourth quarter,
barely within its 1 percent to 3 percent target band.

A separate report released this morning from Washington
showed U.S. gross domestic product, the sum of all goods and
services produced, grew at an annual rate of 1.3 percent from
January through March, slower than the 2.5 pace in the previous
Quarter, the Commerce Department reported. Economists surveyed
by Bloomberg expected a 1.8 percent increase. Canada ships 80
percent of its exports to the U.S.

Fed Speculation

The report pushed the U.S. dollar to a record low against
the euro and boosted its Canadian counterpart on speculation
that the Federal Reserve may cut interest rates to stimulate the
world's largest economy.

``Odds are tilting towards lower rates in the U.S. and
higher rates in Canada,'' said Marc Levesque, chief fixed income
and foreign exchange strategist at TD Securities in Toronto.
``The rate convergence story is overwhelmingly Canada
positive.''

Bank of Canada policy makers on April 24 kept the benchmark
lending rate unchanged for the seventh time, while the Fed has
held its target rate for overnight lending between banks at 5.25
percent since June.

Narrowing Yield Gap

The yield advantage of 10-year U.S. Treasury notes over
similar-maturity Canadian bonds was 47 basis points, down from
50 basis points yesterday. A narrowing yield gap boosts the
allure of Canadian dollar-denominated assets.

``The sense of the market is the next move for the Fed is
down, that's a positive for the Canadian dollar,'' Guatieri
said.

The currency also got a boost earlier today after Statoil
ASA, Norway's biggest oil company, agreed to buy North American
Oil Sands Corp., an Alberta-based oil-sands developer, for $2
billion. Higher commodities prices have made Canadian resource-
based companies attractive for buyers. Crude oil prices have
increased more than 30 percent since their recent low of $49.90
per barrel on Jan. 18.

More Mergers

The announcement ``could increase speculation of more M&A
deals involving Canadian oil companies in coming months,''
Matthew Strauss, a currency strategist in Toronto at RBC Capital
Markets, wrote in a report today. He called the acquisition
``bullish'' for the currency.

The Canadian currency has gained more than 3 percent this
month against the U.S. dollar on evidence of economic strength
and on gains in commodities, which account for 54 percent of the
nation's exports.

The yield on Canada's government benchmark 10-year bond
rose nearly 3 basis points, or 0.03 percentage point, to 4.22
percent. The price of the 4 percent security maturing in June
2016 fell 23 cents to $C98.33. Prices move inversely to yields.

To contact the reporter on this story:
Annie Pinkert in New York at