By James Langton

(January 19 – 12:00 ET) – A global economic slowdown should hit in 2001, spilling over into Canada, says the National Bank in its latest fiscal report.

“For Canada, the U.S. slowdown will translate into a downturn in exports, but the strength of domestic engines, which have finally been given a boost by tangible tax relief, will ensure sustained economic growth over the next two years. More tax relief will nevertheless be essential.”

It laments the weak loonie as a real vulnerability for Canadian wealth creation and productivity. However, National is more sanguine on Quebec’s prospects. “For Quebec, the future looks bright. The economic and structural progress made in recent years has put the economy in an excellent position. The industrial base is the most diversified in the country and leading sectors are well represented.” Although it suggests that provincial taxes must fall too.

Despite a weakening economy and rocky equity markets, investment has remained relatively strong, says National. “The gloom surrounding the stock markets has so far had little impact on the investment decisions being made. Mutual funds and securities remain the most attractive investments for a growing number of investors. GICs with returns linked to the performance of financial markets have also been very successful with clients.”

“Canada’s vigorous economic growth and the optimistic outlook augur well for the further expansion of Canadian companies. The National Bank is well positioned to support these companies in achieving their growth potential by offering them the best financial solutions for their needs.”

National Bank has also filed its proxy, indicating a range of voting issues that will face its shareholders at the upcoming annual meeting.

National Bank will hold its annual meeting on March 7 at The Queen Elizabeth Hotel in Montreal. At that meeting, shareholders will be asked to consider adopting a shareholder rights plan in anticipation of new financial services legislation that would relax ownership restrictions on Canadian banks, and possibly place National in position to be acquired. The bank says that although the legislative process is uncertain its board has decided a rights plan makes sense.

The bank is also looking to amend its stock option plan to boost the maximum reserve from 8 million shares to almost 19 million shares.

Also noted in the proxy is the latest on the bank’s executive compensation regime. Like all the other banks, National pays brokers the best. At National, Lawrence Bloomberg and Pierre Brunet, co-heads of National Bank Financial, each picked up $200,000 in salary and $2.75 million in bonus last year. CEO Andre Berard picked up $680,000 in salary and $940,000 in bonus.