What you need to know about today’s economic news

April 21: Federal budget day — plus ... an earnings bonanza, an anti-trust marathon, and the future of Coca-Cola

MORNING-PLAYBOOK-STORYIt’s the day you’ve been waiting for! (Probably.)

At last, at long last, it is finally federal budget day. Let the debate—over everything from unemployment, to tax-free savings, to child care benefits, to stimulus—begin (and then we can hash it all over again tomorrow morning). Wholesale trade numbers will also be out for Canada today.

It’s also a busy week in company news, as second-quarter-earnings season picks up. Yesterday, Rogers (which owns Maclean’s) reported quarterly earnings, coming in under expectations at $225 million, and down 17 per cent from the same period last year—even as overall revenue was slightly up. The company blamed some of the losses on the CRTC’s regulatory changes. The long-running hearings on the Canadian telecommunications industry, Let’s Talk TV, have highlighted Canadians’ changing relationships with their TVs (and phones). In other company news, yesterday, Guy Laliberté confirmed that Cirque du Soleil will be sold for $1.5 billion to an American company and a Chinese conglomerate, which would allow the circus to expand further into Asia. The Montreal-based company had struggled to keep its elaborate performances in high demand amid a global expansion.

Canadian National Railway also reported yesterday, sending shares of both CN and Canadian Pacific, which reports today, up, helping the TSX/S&P Composite to clock a 50-point gain. The Vancouver-based mining company Teck Resources will report today, and the battle for changing fast-food tastes also picks up. Chipotle, McDonald’s new-era rival, goes head-to-head with the company that owns Taco Bell and KFC, and Credit Suisse and Yahoo! are up as well.

There are a couple of other nuggets of news from my two favourite subjects (Chinese debt and Greek debt, in case you were wondering): a major Chinese real estate developer has defaulted, and Alexis Tsipras is ordering local governments to pool their funds in order for the central government to pay its bills. The government will meet again with European creditors in Riga on Friday, as the Greek cash crunch looks increasingly dire. In the Chinese case, it’s a question of whether this is one company’s default, or a sign of ominous things to come for the Chinese real estate market, often called a massive, turbo-powered bubble. Now—back to the budget!

It’s budget day! At long last, the delayed federal budget arrives today. Who’s excited?? We’re excited! To get you primed, Maclean’s has a whole basket of coverage. The budget itself will be presented this afternoon in Ottawa.

In his column, Kevin Milligan at Maclean’s provides three things to watch for in today’s budget. (Plus, should we trust pre-budget leaks? His answer: no.) First, the projection for the GDP deflator, which offers a measure of prices in an economy and, therefore, the impact on how much the government expects in taxes, the second the direction for expanding the limit for the Tax Free Savings Account and, finally, spending projections—most notably, signs the last budget was underspent. (Have a look at Kevin’s whole column here.) Plus, Aaron Wherry has an interview with MP Nathan Cullen, the NDP’s finance critic, who says the biggest issue for the budget should be job growth. And Kevin Carmichael weighs the IMF’s Christine Lagarde’s advice to governments, noting the finance minister won’t like what he hears. “He has made clear that the budget he presents in Parliament on Tuesday will be written in black ink,” writes Kevin. “By doing so, he will be condemning Canada to economic mediocrity.” Much has been made of the government’s decision to postpone the budget due to volatile oil prices, so look back on “how the oil shock tore up the federal budget” here. Want an overview of what’s going on in the economy at large as we head into the budget? At the end of last year, Maclean’s asked 35 economists for the most important economic charts for 2015, and their answers touched on everything from a housing bubble to an economic reliance on immigrants to the story of youth unemployment.

The EU’s anti-trust marathon. First they took Google, now it’s Gazprom’s turn; the European Commission’s anti-trust office has been taking on some big foes. Last week, Margrethe Vestager, the EU commissioner for competition, announced charges against the search giant for allegedly privileging its own services on its search engines, after a five-year investigation. (In an interesting detail, Google will launch a new algorithm this week that prioritizes mobile-friendly websites, which the Commission’s is not.) The charges against Gazprom are over accusations that the Russian state oil company abuses its position and pushes up gas prices in central and eastern Europe. The investigation is long-running, but was put on hold when the war in Ukraine began—not that the situation with Russia has really calmed down since. Vestager is expected to announce the charges today, the FT says. She has insisted that the issue of pursuing anti-trust charges against Gazprom is a commercial issue, not a political one, although it’s doubtful anyone, anywhere, will see it that way. (Meanwhile, the WSJ reports that Greece is asking Gazprom for a deal on gas.) Who is this Margrethe Vestager, you may be wondering? The New York Times has a profile of the former Danish economic and interior minister and, among references to her reputation for being a tough-minded operator, it includes a couple of great details. These include her hobby of knitting toy elephants, and her coffee-table decoration: a hand presenting its middle finger, given to her as a gift after she cut unemployment benefits in her native Denmark.

Coca-Cola battles the costs of changing tastes. The big names of fast eating have been waging a high-profile war to keep Americans chowing down, even as changing preferences have tilted tastes away from the deep-fried and toward seemingly “fresher” brands such as Chipotle. (Although a word to the wise: Chipotle is not as “healthy” as it seems; burritos are bad for you!) Today will present a classic battle between the old and the new of fast-food eating, as both Chipotle and YUM! Brands (which owns KFC, Pizza Hut and Taco Bell) get ready to report their second-quarter earnings today. In the meantime, the Financial Times has a great read on the waning fortunes of the company behind the Great American Drink, which will report tomorrow, and its efforts to cut costs. From 2012 to 2014, the brand’s revenues have fallen by four per cent, and net profits by 21 per cent, as appetite for carbonated drinks—still 70 per cent of the brand’s profits—falls. What’s their strategy? Smaller bottles, for one, and also diversifying, although the scale of products they produce is already pretty dizzying, with 3,500 varieties across 500 brands, including those “healthy” drinks you may have turned down a Coke for, including Vitaminwater, and coconut water.

Need to know:
TSX: 15,412.60 (+52.05), Monday
Loonie: 81.77 (-0.01), Monday
Oil (WTI): $55.96, Tuesday (4 a.m.)