Financial Update for Feb. 6,2009

Canada lost 129,000 jobs in January, the worst month of employment loss on record. The decline was far greater than anticipated and bumped the unemployment rate to 7.2

· TSX +167.89higher for a third straight session in a broad rally led by strength in the key energy and materials groups, which rose on higher commodity prices.
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Canada posts record monthly job lossThe Canadian economy lost a startling 129,000 jobs in January -– almost all full-time positions, Statistics Canada reported Friday, bringing the cumulative total for the last three months to 234,000 and pushing the unemployment rate to 7.2% from 6.6%.

The consensus among Bay Street economists was that roughly 40,000 jobs disappeared in the first month of 2009. The economy lost 71,000 jobs and 34,000 jobs, respectively, in November and December.

Statscan said the drop in employment was most pronounced in manufacturing, where the net loss totalled 101,000. There were declines in a number of other industries as well. The only industry with notable gains was health care and social assistance, where employment increased by 31,000.

Canada's three largest provinces accounted for the entire employment decrease in January. While just over half of employment losses were in Ontario, 71,000, there were also large declines in both British Columbia, 35,000, and Quebec, 26,000. Employment was little changed in all other provinces.

A report this week from the economics team at Toronto-Dominion Bank indicated that the country stands to lose 325,000 jobs in 2009 as major industries slash production in response to weaker demand, pushing the unemployment rate to 8.8%. Meanwhile, Bank of Nova Scotia forecasts job losses of 220,00 this year with the unemployment rate settling at 8%. The recent federal budget said the stimulus measures would create or maintain 190,000 jobs.

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Fraud hunting gets a boost in recession

John Shmuel, Financial Post "There's a direct correlation in the downturn of the economy and the increase of fraudulent activity," he says. "There's a number of reasons for that, not the least of which are desperate times call for desperate measures."

Mike Savage, head of Ernst & Young's fraud investigation and dispute services group, says it always comes down to opportunity. "Fraud is a human behaviour. At any point in time, an individual can feel the pressure to commit fraud -- they see the opportunity, and they can somehow rationalize it in their head that it's OK."

In 2007, according to Mr. Filliter, Canadian corporations lost an estimated $30-billion to fraud. That staggering sum has most likely increased for 2008, he says, and may explode in 2009 unless corporations take steps to protect themselves.