Soaring fuel bills are blamed as Canada's national airline eliminates 2,000 jobs and auto plants are hit by continuing cutbacks.
There's a prospect of fewer flights, longer lines and higher fares as Air Canada will reduce its workforce by 8 percent Nov. 1.
With the airline's fuel bill up about $1-billion over last year, it has to fly fewer trips and consider even further cutbacks, said president and CEO Montie Brewer.
Rival airline WestJet said it has no plans at this time to cut capacity or lay off workers.
Meanwhile, General Motors said it will not change its plan to close a truck plant and eliminate 2,600 jobs next year in Oshawa, near Toronto.
Executives of the Canadian Auto Workers have been negotiating with GM over the closing since the company received a court order that ended a 13-day union protest at its Canadian headquarters.
GM truck frame supplier Magna International Inc. announced the first-ever layoff of workers at its Formet Industries plant in St. Thomas, Ontario.
About 400 workers will lose their jobs Sept. 8 at the 1,600-worker facility because of reduced demand for full-sized, gas-guzzling trucks.
McCain seeks support north of the border
The United States doesn't intend to retreat "behind protectionist walls" by re-opening the North American Free Trade Agreement, Republican presidential candidate John McCain assured Canadians.
In a "hot-ticket" speech to business executives at the Economic Club of Canada in Ottawa on Friday, McCain called for stronger trade ties. Harmonized energy policies would also benefit Canada and the United States, he said.
Latest figures from the U.S. Energy Information Administration show that the United States imports more oil from Canada than anywhere else.
U.S. crude oil imports for April were 1.95-million barrels a day from Canada, 1.45-million barrels daily from Saudi Arabia and 1.26-million barrels from Mexico.
Free trade has resulted in stronger growth and employment in both countries while more work has to be done, including smoother border-crossing procedures, McCain said as he portrayed his Democratic opponent, Sen. Barack Obama, as a protectionist.
"What a blessing it is for the United States to have in Canada a neighbor we fear only on ice rinks and baseball diamonds," he said.
News in brief
• Virtually all 16- and 17-year-olds in Canada have used the Internet either for doing school work, sending text messages, playing video games or listening to music, according to a study by Statistics Canada. Overall, 73 percent of Canadians age 16 and older, or 19.2-million people, used the Internet mostly for e-mail and browsing, it found.
• Ontario Premier Dalton McGuinty made an unexpected stop in Las Vegas on Friday while returning from a trade mission to California when his Air Canada jet lost cabin pressure. The plane circled above the desert for more than two hours to burn off fuel before landing safely.
Facts and figures
Statistics Canada said shoppers returned to the stores in April, pushing sales 0.6 percent higher after a dismally flat first quarter.
Indicators suggest the second quarter will be better and keep the economy out of a recession.
Canada's dollar is higher at 98.11 cents U.S while the U.S. greenback returns $1.0193 Canadian, before bank exchanges fees.
The Bank of Canada's key interest rate is steady at 3 percent while the prime lending rate is 4.75 percent.
Stock markets moved lower on Friday, with the Toronto composite index at 14,666 points and the TSX Venture Exchange at 2,614 points.
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• The Mounties have arrested eight people in a debit card cloning scam that netted about $1-million. The gang switched debit card terminals in stores with their devices that transmitted credit and debit card information to them to make cloned cards. About 1,000 people were victimized, but police said they were able to recover their money from financial institutions.
• Residents near Lake Minnewank in Alberta's Banff National Park are being warned to be on the lookout for cougars. Some of the big cats were spotted in the area in the past week, but there have been no reports of them showing aggression toward humans, said Michelle Macullo of Parks Canada.
• Nova Scotia lobster fishermen held a demonstration to draw attention to what they say is a problem with scallop fishermen. About 50 fishermen gathered on the Cape Sable Island Causeway to complain that scallop draggers from Digby are damaging their lobsters and called on the federal Department of Fisheries and Oceans to investigate.
Jim Fox can be reached at email@example.com.