What’s Canadian for “recession”? Recession is the answer, two consecutive quarters of negative growth in GDP — it’s a measure that many don’t like, but it can be political dynamite, as Canadian PM Stephen Harper is about to find in something of a warning for Tony Hockey and Joe Abbott next year with the weak Australian economy. Conservatives have already been turfed out of Parliament in the Canadian province of Alberta because of the oil price collapse, and now that places Harper in danger of being turfed out in the Canadian national elections in October.

The country’s central bank, the Bank of Canada overnight stunned markets by admitting it now sees the economy dropping into a mild recession. After the 0.6% fall in the March quarter (thanks to the bitter winter in Canada and the US), the central bank had forecast a return to growth in its April outlook. But the economy has slowed in the three months to June with an estimated 0.5% drop in GDP. And while it forecasts a rebound in the next two quarters, no one believes it. The reasons for the slide are familiar to Australians — the fall in commodity prices led by oil (iron ore in Australia), weak investment (ditto) and weak exports (ditto). Canada’s economy its also hitched to China, like Australia’s, but also has close links to the US where exports have not recovered. Canada also has rising household debt because of a housing boom in one or two markets (led by Toronto), which is a very familiar story here. The Canadian dollar fell to a six-year low overnight, as did the Australian dollar. — Glenn Dyer

BHP’s little big trim. For years resource companies have been whingeing about the impact of cost over-runs, labour costs and government red tape on their projects around the country and overseas, and for years they have been moaning about the added costs these burdens imposed on their businesses. And for years these companies have been writing off billions of dollars a year in asset values and other costs because they spent too much money buying/developing the assets, or the market has changed — such as iron ore and coal where prices have fallen (didn’t see that coming!), or demand has changed (oops, that’s another one we missed).

Rio Tinto is a flagrant offender, and leads the way in this country. BG Group, a UK gas company is another moaner. And then there’s BHP. Not in Rio’s class as a moaner and groaner, but with an almost genetic ability to overpay and rue the day. Whether it be US copper in the 1990s, WA nickel in the noughties or, currently, US gas, BHP has managed to write the cheque and then sober. It paid around US$20 billion to get a leg into the US shale-gas industry — just before prices started plunging because there was too much gas — so a write-down of US$2.8 billion was taken in 2012 against the assets. BHP then moved into shale-oil production, which proved to be very wise because, as we know, that lead to a lot of oil being produced until the price collapsed 13 months ago and hasn’t looked healthy since. So a US$300 million write-down was taken in February against some of the gas and oil assets. And then yesterday, a further US$2.8 billion in write-downs were announced, most against gas, but some were against oil-producing assets.

And remember these write-downs cost taxpayers because these companies get a tax benefit, so they overpay and we taxpayers pay for that overpay, if you get my drift. These losses are all much bigger than anything those nasty trade unions are doing, so why not a royal commission into corporate incompetence? — Glenn Dyer

US coal’s dying. Tony Abbott reckons coal is good for humanity, or some such inanity. Don’t tell that to American investors, because coal is proving to be near-fatal for the companies and those who bought their shares and bonds, and those employed in it. Thanks to the shale-gas boom in the US, coal is being driven out of markets, especially the huge US electricity sector.

In April of this year, coal was responsible for supply 30% of America’s electricity. Natural gas (from various sources) was responsible for 31%. US coal production will fall 7.5% this year, according to the Energy Information Administration. Last week it forecast a 75-million-ton fall in production this year because of “lower coal demand for domestic consumption and exports … Coal production is expected to decline in all coal-producing regions, and coal production is projected to remain near 2015 levels in 2016.” The EIA said that falling demand for coal from the power sector had effected a 40-million-ton jump in coal stocks at power companies, which are now preferring to burn gas than coal (for pollution control reasons as well as cost). Naturally, that has damaged the sharemarket standing of coal companies. One of the biggest losers is Peabody Energy, whose shares have plunged 98% in the past four years. It’s a disaster. What was that you were saying about coal, Tony? — Glenn Dyer