By Tamsin McMahon - Thursday, December 6, 2012 - 0 Comments
Many happy returns to some familiar faces
J.K. Rowling may be the most commercially successful author in recent memory, but in the lead-up to her first adult novel, The Casual Vacancy, skeptics questioned her writing chops. It’s one thing to earn a billion dollars charming children with teenage wizards. It’s quite another to penetrate the cloistered world of the literary elite. The fuss turned out to be for naught. The Casual Vacancy has been a critical success: the Guardian declared Rowling a storyteller “on a par with R.L. Stevenson, Conan Doyle and P.D. James.” Any 10-year-old could have told you that.
Putting the Sheen on cable TV
Writers for CBS’s Two and A Half Men made sure Charlie Sheen would never return when his character was hit by a train, and his body “exploded like a balloon full of meat.” Leave it to cable TV to see the potential in Sheen’s penchant for drug-fuelled rants and rehab stints. Sheen’s Anger Management debuted on FX in June. Ratings were respectable enough for the network to commit to a further 90 episodes. Let’s hope they left some downtime in Sheen’s schedule for a possible relapse. Maybe Ashton Kutcher will be free.
An inauspicious homecoming
Visit a prison and you’ll find inmates who claim to be wrongly convicted. But few can proclaim their innocence quite like Conrad Black. Since his release from a Florida prison in May he has made the rounds of British and Canadian media to declare himself the victim of the “fascistic conveyor belt of the corrupt prison system.” If there is one decision Black seems to regret, it’s the one to renounce his Canadian citizenship for a British life peerage. Eleven years after he termed his exit from Canada as his “last and most consistent act of dissent,” Black is back home on a one-year visa and fighting to keep his membership in Order of Canada. Missing Tim Hortons coffee, m’lord? Continue…
By Tamsin Mcmahon with Anthony A. Davis - Sunday, December 2, 2012 at 7:10 AM - 0 Comments
Nearly $2 billion lost. As many as 20 troubled or bankrupt companies. Tamsin McMahon looks at how Alberta regulators failed to guard against the biggest losses
For “Maria,” the gnawing doubt began shortly after she signed papers handing over her life savings to a real estate developer in Alberta. She attended a seminar in Ottawa in 2009 touting the benefits of investing in real estate, which promised better returns than the tumultuous stock market. Among the investments on offer was a company called CBI Group, run by Red Deer brothers Ron and Travis Cadman, which promised a chance to invest in an array of projects they were developing around Alberta—a luxury vacation property in the resort community of Sylvan Lake, a condo project in Red Deer that listed a movie theatre and a resident chef among its amenities—as well as a chance to invest in foreclosed properties in Arizona.
Maria (who spoke on the condition her real name wouldn’t be used) signed on to invest $100,000 in two CBI investments, half in Arizona and half in Alberta. Almost immediately, she says, she grew concerned about her investment in Arizona since it wasn’t one she could easily sell on short notice. She pulled out and got a full refund. But she stuck with her $50,000 Alberta investment, which promised 11 per cent annual interest, paid quarterly until 2012. Real estate in Alberta was booming, the salesman told her, and it was about the safest bet you could make. “I remember thinking, ‘Well, yeah, I am investing in bricks and mortar and Alberta is hot right now.’ ” Continue…
By Tamsin McMahon - Monday, November 26, 2012 at 6:17 PM - 0 Comments
Tamsin McMahon rounds up the news of the day
It was an act of well-timed pathos that embattled Toronto Mayor Rob Ford’s first public appearance after being ordered out of office was to continue with a scheduled photo-op for the mayor’s annual Christmas Toy Drive, handing out toys to needy children at the City Hall daycare.
It was, after all, another charitable cause supporting needy children — the mayor’s beloved Rob Ford Football Foundation — that became the seeds of Ford’s political undoing.
In a 24-page ruling delivered Monday morning by fax, Ontario Superior Court Justice Charles T Hackland found that Ford had broken municipal conflict of interest laws when he solicited $3,150 in donations to his football charity from city lobbyists and their clients while he was still a councilor, had repeatedly refused to repay the money despite an order from the city’s Integrity Commissioner — and later insisted on casting a vote in council clearing himself of wrongdoing.
Far from a simple error in judgment, Judge Hackland ruled that Ford’s conduct amounted to “a stubborn sense of entitlement (concerning his football foundation) and a dismissive and confrontational attitude,” toward his fellow councilors and the law.
“In my opinion,” the judge wrote, Ford’s “actions were characterized by ignorance of the law and a lack of diligence in securing professional advice, amounting to willful blindness.”
Just hours after the bombshell ruling ordering him to clear out his office in the next two weeks, Ford seemed to remain in a state of willful blindness, heading down to the foyer at City Hall in business-as-usual fashion for his Christmas press conference to polite, if perplexed, applause from the gathering crowd.
Minutes earlier, he had dismissed the decision as political maneuvring by his left-wing opponents and vowed to keep his job, court judgment or no court judgment.
“The left wing wants me out of here and they’ll do anything in their power,” he said. “I’m going to fight tooth and nail to hold onto that job and if they do, for some reason get me out, I’ll be running right back at them.”
Whether he does get to keep his job, however, is not exactly up to Ford. The soon-to-be-ex mayor says he plans to appeal the decision in the next 30 days and ask for the judgment against him to be “stayed,” or suspended, allowing him to stay on as mayor until his appeal can be heard.
If an appellate court rejects his request, city council can appoint an interim mayor or call a byelection. If it’s a byelection, Ford pledged that his name will be “the first on the ballot.”
Ford’s opponents, both legal and political, did their best to contain their glee at having successfully removed the controversial mayor from office. “While we’re pleased to have won this case, we’re also saddened by it,” said Clayton Ruby, the high-profile civil rights lawyer who took the lawsuit on pro bono on behalf of Toronto resident named Paul Magder. “It is tragic that the elected mayor of a great city should bring himself to this. I use that language advisedly: Rob Ford did this to Rob Ford.”
While Ford foes took to Twitter to cheer the ruling, within the corridors of City Hall councilors seemed shocked that a court had actually turfed a duly elected mayor over a few thousands dollars worth of sports equipment that, according to Ford, ended up not in his own pocket, but in the hands of underprivileged children.
“I just thought that there might be some consequences for the mayor but I didn’t think it would be this,” a visibly shaken Deputy Mayor Doug Holyday said.
“All he had to do was pay back the money,” added Councillor Paula Fletcher. “When he chose not to do that, he chose a different path.”
Councillor Adam Vaughan, one of Ford’s most outspoken critics and long thought to be planning his own run at the mayor’s office, said the mayor-less council now had the task of leading the city away from the fractured partisan politics that defined Ford’s tenure.
“What I know is that we’ve been dealt this situation as a result of [Ford’s] behaviour and as a finding of the judge,” Vaughan said. “I’m not sure the city has got what it deserved, but it’s now incumbent upon us who have been elected to move this city forward, with or without Rob Ford on council in the mayor’s chair.”
While Ford’s political future may be in doubt, his high-school football prospects seem much more assured. Ford will be busy as usual on Tuesday night coaching his Don Bosco Eagles against the Huron Heights Warriors for the Metro Bowl, local high school football’s version of the Super Bowl.
Indeed, Ford’s brother, Councillor Doug Ford, urged the mayor’s fans to come to the playoff as a way of showing their support. “This is a man that cares, a man that is the most honest politician I have ever seen in this country,” Doug Ford said. “You want to support Rob? Come to the [game] tomorrow.” If only winning a football championship were enough to save the day.
By Tamsin McMahon - Monday, November 26, 2012 at 7:44 AM - 0 Comments
‘Sometimes you win, sometimes you lose,’ Ford says after ruling
Toronto Mayor Rob Ford has been removed from office and has 14 days to vacate his seat, after a judgment from Ontario Superior Court Judge Charles Hackland Monday morning.
Hackland, the same judge who famously tossed out former MP Helena Guergis’ lawsuit against Prime Minister Stephen Harper, had been deliberating on a case that revolved around Ford’s decision in February to vote during a council meeting on whether he should be forced to repay money he solicited from city lobbyists and businesses for his personal football charity in 2010, while he was still a city councillor.
The decision gives Ford 14 days to leave office, but it does not bar him from running for office again, as Hackland wrote that he will “decline to impose any further disqualification.”
“In view of the respondent’s leadership role in ensuring integrity in the municipal government, it is difficult to accept an error-in-judgment defence based essentially on a stubborn sense of entitlement (concerning his football foundation) and a dismissing and confrontational attitude to the integrity commissioner and the code of conduct,” Hackland wrote in his judgment. “In my opinion, the respondents’ actions were characterized by ignorance of the law and a lack of diligence in securing professional advice, amounting to willful blindness.”
By Tamsin McMahon - Wednesday, November 21, 2012 at 9:50 AM - 0 Comments
Cambrian College is offering financial incentives to prospective students, starting in kindergarten
Bursaries and scholarships are great when students have already made up their minds to go to college or university. The challenge for Sudbury’s Cambrian College, which serves remote and rural populations in northern Ontario, is how to get students to consider going to college in the first place.
Three years ago, the school launched something called a learning account, aimed at the students least likely to attend college: Aboriginals, those with disabilities and those whose parents didn’t have a post-secondary education. The program offers students credits toward future tuition costs in exchange for attending a series of workshops. Students can earn $70 in “Cambrian Bucks” for attending a conference on coping with learning disabilities, $20 for a science workshop and $320 for a four-day program aimed at Aboriginal pupils. The college also gives $120 to parents who attend a two-day program to learn how to help set career goals for their children. So far, 410 students have signed up with an average of $250 in tuition credits, although they can earn as much as $3,000.
The tuition credits act like a bursary, but with a long-term goal of getting the kids to start working toward college while still in elementary school. “For most of these underrepresented populations, getting them to post-secondary is a long process,” says France Quirion, Cambrian’s associate vice-president of student services. “They don’t live and breathe post-secondary. It’s just a foreign concept. Continue…
By Tamsin McMahon - Wednesday, November 21, 2012 at 8:20 AM - 0 Comments
Despite big investments to spruce up stores and expand menus, once-thriving restaurant chains are suddenly struggling to get ahead
Analysts were understandably skeptical this month when Tim Hortons interim CEO Paul House blamed the company’s disappointing third-quarter financial results partly on “capacity issues” at some of its restaurants. Canada’s iconic coffee-and-doughnut chain reported that it’s on track to miss its annual growth target in part because lineups at some of its stores were simply too long. “In some ways, it is not good news, but in other ways, it is good news in the sense that . . . we’ve got lots of business,” House told a conference call last week.
It’s a remarkably positive spin on what has been an off year for the ubiquitous coffee chain. Sales growth at existing Tim Hortons stores has been below two per cent for the past two quarters, while growth of 2.3 per cent at U.S. stores fell well below its target of five per cent. What growth the company has seen has been from customers spending more at each visit, even as traffic to its stores declined. The report wasn’t all bad news. The chain did manage a $105.7-million profit for the quarter, up two per cent from a year ago. Continue…
By Tamsin McMahon - Wednesday, November 21, 2012 at 8:00 AM - 0 Comments
Alabama’s immigration laws are embarrassing the state, and costing it money
When Alabama passed America’s most aggressive immigration law last year, legislators heralded the bill as a cure for the state’s high unemployment.
Under the new law, virtually all interactions with any government official would become a test of an immigrant’s status—from roadside stops by police, to enrolling children in public school, to paying a utility bill.
The idea was to make it so difficult for illegal immigrants to live and work in the United States that they would simply pack up and leave, freeing up thousands of jobs for out-of-work Americans.
Leave they did. Officials say Alabama’s illegal alien population fell by 75,000 in the three months following the bill’s passage. But when it came to putting more Americans back to work, the reality has proven to be a lot more complicated.
Alabama’s poultry processing industry complained it couldn’t find enough local workers willing to spend long hours gutting chickens for low pay. Companies, it has emerged, are being forced to import African and Haitian refugees to do the work.
Meanwhile, Alabama became the butt of international jokes when police arrested a German Mercedes-Benz executive as well as a Honda manager from Japan for allegedly not having their proper immigration papers with them during roadside stops. Both were on temporary assignments overseeing Alabama’s burgeoning foreign auto industry; Honda has more than 4,000 employees in Alabama, with an investment worth $1.4 billion.
Rival states quickly turned news of the arrests into a chance to promote themselves as more friendly to international business. “We are the ‘Show Me State,’ not the ‘Show Me Your Papers State,’ ” trumped Missouri’s St. Louis Post-Dispatch.
It’s not just Alabama that is struggling with the fallout from its tough stand on illegal immigrants. Five other states have also enacted such laws. Georgia witnessed an estimated 40 per cent drop in the state’s farm workers, triggering nearly $140 million in agricultural losses in 2011 as unpicked produce rotted in fields. The state has since begun shipping in prisoners to help at harvest time. In Arizona, churches complained they witnessed an immediate drop in attendees and donations after immigration laws went into effect. One church reportedly went into foreclosure.
Far from putting more Americans back to work, business leaders complained the laws were discouraging foreign investment. Spanish bank BBVA Compass has scrapped plans for an $80-million office tower in Birmingham over immigration concerns. “We’ve used difficulties in other states to make sure those people come and look here,” David Bronner, head of Alabama’s pension system, told the Birmingham News. “We’ve just used a hammer and we’ve hit ourselves over the head with it.”
By Tamsin McMahon - Tuesday, November 13, 2012 at 7:00 AM - 0 Comments
Three years on, the debate over whether saving Detroit was worth it still rages
In any other industry, the announcement that a U.S. company was expanding sales to China would be hailed as a triumph of American capitalism. But in North America’s auto industry, the news that Chrysler was planning to build Jeeps in China—which it hadn’t done since emerging from the brink of collapse in 2009—was met with a heavy dose of skepticism. “Obama took GM and Chrysler into bankruptcy and sold Chrysler to Italians who are going to build Jeeps in China” was how a Republican campaign ad characterized the move by Chrysler’s Italian majority shareholder, Fiat S.p.A.
The theory was quickly debunked by Chrysler CEO Sergio Marchionne in a letter to employees explaining that a surge in North American Jeep production—nearly tripling since 2009—had been crucial to Chrysler’s quick turnaround and was central to the company’s long-term growth. “I feel obliged to unambiguously restate our position,” he wrote. “Jeep production will not be moved from the United States to China.”
But the argument had traction. By the time Donald Trump posted on Twitter the now-popular view that “Chrysler wants to send all Jeep manufacturing to China,” the carmaker had dropped all pretence of eloquence. “You are full of s–t,” was how the company’s senior vice-president of design, Ralph Gilles, responded to Trump on Twitter. Continue…
By Tamsin McMahon - Thursday, November 8, 2012 at 8:10 AM - 0 Comments
A business recap of energy drinks, electric cars, and Mexican labour
Energy drinks have courted controversy with a business model many see as based on pumping teenagers full of caffeine. But investors have largely tuned out those complaints. Monster Beverage Corp. has been the greatest beneficiary of the stock market’s love for energy drinks. Company shares more than doubled last year, topping $78 in June, as its oversized cans and provocative slogan—“unleash the beast”—made it the largest U.S. energy drink producer by volume.
That was until last week, when its shares plunged nearly 30 per cent on news the Food and Drug Administration is investigating reports five people have died since 2009 after consuming Monster drinks. The FDA said it has not yet linked Monster to any of the deaths, but the bad publicity sparked whispers that Coca-Cola is backing away from plans to buy the company. The stock market, it seems, is finally coming down off its buzz around energy drinks.
Bright Idea: Lube, oil and software fix
Last week, General Motors Co. announced a software update for its Chevrolet Volt, contacting about 4,000 owners of the plug-in hybrid over a glitch that could cause the electric motor to suddenly shut down, even while the car was moving. They were asked to bring their vehicles to a dealer for a fix, but in the future, more software updates might happen automatically and over the air—just like an iPhone. Continue…
By Tamsin McMahon - Wednesday, October 31, 2012 at 5:31 PM - 0 Comments
Stock market analysts have been buzzing lately about “Gangnam Style” internet sensation Psy’s ability to send the share prices of some Korean companies soaring.
DI Corp., which makes equipment for the semi-conductor industry and is chaired by Psy’s father, Park Won Ho, has seen its stock price soar 500 per cent since the video featuring the 34-year-old singer’s bizarrely popular horse-riding dance became a huge hit on Youtube in July. (The video now stands at more than 600 million views.) The stock of YG Entertainment, Psy’s manager, nearly doubled between July and October.
But the real financial genius may be Psy’s marketing prowess. The singer is the spokesmodel for at least a dozen different Korean companies, from hawking Internet TVs for a subsidiary of LG, to dancing in front of refrigerators for Samsung. A year contract to have the singer promote a company’s brand reportedly tops $600,000.
Psy landed a contract with Nongshim, one of Korea’s largest ramen noodle companies, after uploading a video of himself to Youtube eating the company’s Shin Ramyun noodles and begging to be their spokesperson.
Sales of Hite-Jinro, one of Korea’s biggest beverage companies, spiked after Psy downed a bottle of the company’s soju, a popular Korean drink, during a concert in Seoul that was broadcast internationally. The singer is now reportedly in talks to become a spokesperson for them. It was conspicuous timing. Psy was previously a spokesperson for Oriental Brewery, Hite-Jinro’s chief competitor, until the company dropped his contract last November.
But there are signs the Gangnam Style financial bubble might be coming to an end. Shares in DI Corp have plunged nearly 40 per cent in the past two weeks. According to the Korea Times this month, investors who poured their money into DI Corp. shares since the summer have now started posting on Psy’s personal blog, demanding he do something to reverse the company’s falling stock price. “My father put all of his retirement grant into DI and now he is drinking soju in the living room, crying,” one wrote. “Psy, please help. One word from you will do.”
By Tamsin McMahon - Monday, October 29, 2012 at 2:54 PM - 0 Comments
Why the premiers of B.C. and Alberta just can’t learn to get along
On the night roughly a year ago when Alison Redford became the first female leader in Alberta’s history, she fielded a call from someone whom many at the time predicted would become one of her greatest political allies. Along with well wishes from Saskatchewan premier Brad Wall and Prime Minister Stephen Harper, Redford spoke with Christy Clark, if not B.C.’s first female premier, certainly the woman who has done the most to shake up her province’s political scene.
The conversation was friendly. Clark offered her congratulations and the two joked about just how wrong the pundits had been about both women’s chances of winning the premiership of their respective provinces. “I said, ‘Alison, how did the pollsters get it so wrong?’ ” Clark recalled in an interview with Maclean’s earlier this year. “And she said, ‘Christy, of all the people in the country I can’t believe you’re the one asking me that.’ ”
For many, Redford’s election was considered a win for B.C. After all, the two premiers, part of a growing powerhouse of women in Canadian politics, have some remarkable parallels.
Both are the same age—46—and born in B.C. (Clark in Burnaby, Redford in Kitimat). Both are mothers to preteens—Clark’s son Hamish is 11, Redford’s daughter Sarah is 10. Both were long-time party loyalists who spent time in federal government, Clark working for Chrétien-era transportation minister Doug Young and Redford for Joe Clark. What’s more, both were once married to party stalwarts and maintain close ties with their ex-husbands. So close, in fact, that both recruited their former spouses to work on their campaigns.
By Tamsin McMahon - Friday, October 26, 2012 at 5:56 PM - 0 Comments
Adding to the growing chorus of analysts predicting a bursting of the Canadian housing bubble, ratings agency Moody’s Investor Service placed almost all of Canada’s major banks on review for a downgrade Friday, citing the country’s growing household debt levels.
Among the banks that Moody’s warned may be downgraded are: Bank of Montreal, Bank of Nova Scotia, CIBC, TD Bank and National Bank, along with Quebec’s Caisse Centrale Desjardins. The agency said its rating for Royal Bank of Canada, which was downgraded earlier this year, would be left unchanged.
Canadian household’s debt to disposable income ratio hit 163 per cent in the second quarter of the year, up from 137 per cent in the same period in 2007, the ratings agency noted. House prices are up 21 per cent over the same time period, it said, far outstripping the growth in incomes.
“Today’s review of the Canadian banks reflects our concerns about high consumer debt levels and elevated housing prices which leave Canadian banks more vulnerable to increased risks to the Canadian economy,” Moody’s vice-president David Beattie said in a statement.
By Tamsin McMahon - Saturday, October 13, 2012 at 12:16 AM - 0 Comments
The surprising ways political parties get inside your head
Canadians were rightly alarmed earlier this year when details of a secretive ﬁgure named Pierre Poutine first came to light. Using an auto-dialing service in Quebec, an anonymous partisan operative allegedly sent voters identified as non-Conservatives to the wrong polling stations during the 2011 federal election. But while the so-called “robocall affair” exposed the underbelly of today’s political campaigns, it also opened a door into a world where political parties exploit our ever-growing webs of personal data.
Mobilizing your supporters and discouraging your opponents, the bread and butter of any election campaign, was once a matter of recruiting enough volunteers to canvass neighbourhoods and drive people to the polls. These days, it’s increasingly the work of data analysts and behavioural scientists who collect reams of publicly available personal information and use computer algorithms to exploit it. Their goal: nothing short of pinpointing the fears and hopes that motivate individual voters, and using that information to target them for donations and votes on election day.
How you vote may seem like the last bastion of individual agency, but political campaigns say they can predict what messages will move you with unnerving accuracy by studying everything from your home address, to your magazine subscriptions, to what you like to watch on TV on a Saturday night—or even whether or not you own a TV in the first place. Dubbed “microtargeting,” these new techniques promise to have profound implications for the political process. “The idea of Pierre Poutine, it was funny,” says Carleton University professor and former Reform party pollster André Turcotte. “But the real story is in what parties are doing and not doing with their data and about how that technique is hijacking the political process.”
By Tamsin McMahon - Friday, October 12, 2012 at 10:54 AM - 0 Comments
As the social media site once again tries to grow its revenue, a familiar fear returns
Mark Zuckerberg’s announcement last week that the company he founded in a Harvard dorm room had surpassed one billion users should have been good news to investors, given that Facebook’s value lies in the sheer size of its database of subscribers. But while they heralded the news with a bump in the company’s share price—to $22—investors are still holding it well below its $38 initial public offering (IPO).
Their concern is the inherent contradiction in Facebook’s business model: the bigger the company’s user base, the harder it becomes to harness all that personal data for profit. Since its bungled IPO in May, Facebook has been under intense pressure to monetize its massive social network by selling demographic information to advertisers while somehow still keeping everyone’s name, email address and baby pictures private.
It is walking an ever-thinner line. Last month, it announced it would allow advertisers to match their databases of customers’ email addresses and phone numbers to users’ Facebook accounts to target ad campaigns. Contact information would be partially obscured, Facebook said, so that only computer algorithms, not human eyes, would see it. In August, it revealed it was partnering with retail data collector Datalogix to examine the in-store shopping habits of Facebook users, again promising not to disclose the names of actual users.
None of this has gone over well with privacy advocates. The U.S. Electronic Privacy Information Center has filed a complaint with the Federal Trade Commission over the Datalogix partnership. Bloggers complained after Facebook confirmed it scanned users’ messages for mentions of the websites of its advertisers so it could increase the “Like” count of the advertiser’s Facebook page.
Facebook’s ethical and business dilemma, however, didn’t seem to phase Chief Operating Operator Sheryl Sandberg when she declared at last week’s Advertising Week forum: “We don’t make more money when you share more and we do not give your information to marketers.” As Facebook continues to look for ways to grow its $3.7-billion revenue, convincing people of that may be its biggest challenge.
By Tamsin McMahon - Wednesday, October 3, 2012 at 11:00 PM - 0 Comments
Canadian investors are buying up so many distressed properties in Phoenix that locals are angry and analysts are warning of a crash
Last year, Edmonton investor Jeff Lastiwka was on the hunt for bargain basement development properties in the scorched real estate landscape of California’s Palm Desert when his brother-in-law, a real estate agent in Scottsdale, pitched him on buying 100 houses to flip in Arizona.
At the time, Lastiwka, who runs JayCap Financial, a private commercial lending firm in Alberta, balked at the idea. But after watching property values in Phoenix soar over the past year, Lastiwka headed back to the Scottsdale area this spring armed with $10 million to spend on foreclosed properties. He left disappointed, finding much of the market for distressed homes in Phoenix had already been picked over and snapped up by either investors or local real estate agents. “I kick myself about it now because the properties I was looking at a year and a half ago have doubled in value,” he says.
Phoenix was the epicentre of America’s subprime real estate bust, with property values plunging more than 50 per cent during the depths of the recession. Then came the Canadians, enticed by year-round sun and the prospect of brand new bungalows with backyard pools that could be had for less than the average Canadian household income—about $60,000 at the bottom of the market.
By Tamsin McMahon - Tuesday, September 25, 2012 at 11:44 AM - 0 Comments
Low interest rates and record high crop prices means high yields for land
The hottest real estate investments aren’t in big cities. Today’s bidding wars are in the breadbasket.
Much like the frenzy that has swept Canada’s urban housing market, real estate prices are soaring in the hinterlands. Prices of farmland have shot up as much as 25 per cent across Canada this year. Fruit growers in B.C.’s Fraser Valley command $60,000 an acre. Bidding wars are breaking out for farms in Saskatchewan, while grain land in Alberta “can sell virtually overnight,” says a report this September from Re/Max. In some areas of southwestern Ontario, prices jumped 70 per cent in the past two years to $15,000 an acre.
Much of the enthusiasm for farmland has been driven by farmers enticed to expand their operations by low interest rates and record-high prices for corn, barley and wheat, thanks to the worst drought in a half-century that’s swept the U.S.
But it’s not only farmers that see a gold mine in cropland. Central Alberta’s oil sector has helped fuel a 25 per cent jump in farm prices. Nearly three-quarters of farms have oil and gas wells that are leased to oil companies for added income. Where once sellers could add three times the rental income of a well to the price of their property, they can now command five or six times, says Don MacDonald, a Re/Max realtor in central Alberta.
By Tamsin McMahon - Thursday, September 20, 2012 at 6:40 PM - 0 Comments
Their offshore oil industry is gushing with good fortune. So why is everyone unhappy?
Norway, already one of the world’s largest oil producers, scored a coup when it announced it had discovered one of the world’s largest oil finds last year in the North Sea. Elation over the Johan Sverdrup find, estimated to contain nearly 3.3 billion barrels of recoverable oil, was short-lived, however. In what could be a cautionary tale for other oil nations, including Canada, Norway is suddenly grappling with a host of labour and cost troubles linked to its rising success.
A persistent shortage of oil workers has pushed Norwegian wages to the highest in the world. Oil workers now earn an average of $180,300 a year, according to a new survey by Hays Oil & Gas, more than double the global average and $56,000 more than workers in the Alberta oil patch. Drilling in Norwegian waters also costs as much as $75,000 per worker more than in neighbouring U.K. waters, an expert panel commissioned by the Norwegian government wrote in a report last month. That’s mostly due to regulations requiring that offshore oil workers get four weeks off for every two weeks of work. Meanwhile, rules requiring workers to speak Norwegian on rigs are hampering efforts to import workers.
Doing away with many of the perks that offshore oil workers have enjoyed could save the country’s energy sector as much as $167 billion, the panel said. Its chair warned that letting costs escalate could put the future development of Norway’s offshore oil industry in “grave danger.”
By Tamsin McMahon - Tuesday, September 11, 2012 at 12:08 PM - 0 Comments
In crisis mode south of the border, the chain is booming in Canada, selling everything from TVs to diaper bags
Canada has become a safe haven for U.S. retailers struggling to find growth in sluggish domestic and European markets. But none more so than Best Buy, the world’s largest consumer electronics company.
The Minnesota chain has experienced an endless stream of bad news south of the border, where it has been hard hit by both a drop in consumer spending and the rise of online discount competitors like Amazon.
It announced it was closing 50 stores after losing US$1.2-billion in the last fiscal year. It shut its U.K. stores in January. CEO Brian Dunn resigned after an ethics probe into an alleged relationship with a female subordinate. The scandal forced the chain’s founder and chairman, Richard Schulze, to resign and he has since been locked in a battle with directors over his plans to buy the firm and take it private. Last month, Best Buy announced it would stop issuing earnings forecasts.
By Tamsin McMahon - Tuesday, September 4, 2012 at 9:45 AM - 0 Comments
Investors keep putting money in negative-yield bonds and companies sit on cash. Why it’s killing the economy.
Earlier this month Louis Moore Bacon, the head of New York hedge fund Moore Capital Management, wrote to his investors offering them a $2-billion refund.
Bacon had made investors a fortune exploiting macroeconomic trends such as interest-rate and currency movements. But these days, he complained, the markets had become far too manipulated by fear for Moore Capital to promise the kind of double-digit returns its investors had come to expect.
Rather than looking for investments that might provide them a nice return, investors were paying big premiums to stash their cash in investments guaranteed to lose money in the long run on the belief that those investments might be the most likely to survive a global financial apocalypse. “Disaster economics, where assets are valued based on their ability to withstand a lurking disaster as opposed to what they may yield or earn, is now the prism through which investors are pricing markets,” Bacon wrote to clients. In this environment, his fund simply couldn’t make money.
Bacon is not the first multi-billion-dollar hedge fund manager to return money to clients or complain that the aftermath of the 2008 financial crisis has created a new era in investing where the old rules no longer apply. A growing chorus of doom-and-gloom types believe the financial markets that have served generations of investors so well for the past 100 or so years may finally be irreparably broken.
By Tamsin McMahon - Wednesday, August 15, 2012 at 1:45 PM - 0 Comments
No joke: 21 people and 74 pages of emails
How many federal officials does it take to answer a few questions about a $500 grant for a tea party in Prince Edward Island in honour of the Queen?
According to e-mails recently released by the federal government under Access to Information, the answer is: 21.
Back in May, Maclean’s decided to write a small light-hearted story about the federal government’s $2 million fund for cities and towns to celebrate Queen Elizabeth II’s Diamond Jubilee.
Local media stories in Prince Edward Island highlighted the fact that the tiny province had been budgeted to receive $170,000, the second-largest sum in the country, behind Ontario. It was a surprising fact given that Prince Charles and his wife, Camilla, Duchess of Cornwall, hadn’t actually planned any stops in PEI on their Canadian tour.
By Tamsin McMahon - Monday, August 13, 2012 at 10:55 AM - 0 Comments
As Quebec prepares to block a takeover of Rona, shareholders wonder whose side the company is on
RONA CEO Robert Dutton could be forgiven for being testy with investors at the hardware retailer’s annual general meeting in May. There had been incessant gossiping over whether the company was ripe for a takeover by American rival Lowe’s, and Dutton said it was “demoralizing.” The chain had been busy scooping up smaller retailers and buying back its shares as it fought to cement its place atop Canada’s competitive home-hardware industry. But rumours that Lowe’s, America’s second-largest hardware chain, was angling to gobble up the Boucherville, Que.-based Rona in order to expand its Canadian business have dogged Dutton since before Lowe’s ever set foot in the country. “Look into my eyes,” Dutton once told an industry conference in 2007 as Lowe’s was getting ready to open its first Canadian store. “We are not for sale.”
As it turned out, the speculation was more than just idle gossip. Rona announced at the end of July that its directors had been quietly talking to Lowe’s for nearly a year. The talks had culminated in a $1.8-billion purchase offer in early July, which was swiftly rejected by Rona’s board.
As far as Lowe’s was concerned, its three-page proposal was simple: $14.50 a share, more than 20 per cent above Rona’s stock price at the time, along with a pledge to keep the company’s head office and extensive Quebec supply chain intact.
By Tamsin McMahon - Thursday, August 9, 2012 at 2:36 PM - 0 Comments
It turns out cramming more people into cities won’t help the environment or our health, and may even hurt the economy
Last month Toronto’s deputy mayor, Doug Holyday, uttered what has become a cultural taboo in Canada’s largest city. Downtown Toronto, he said, is no place to raise a family.
Holyday, who lives down the street from his grandchildren in the suburban Toronto neighbourhood of Etobicoke, was against a city plan to force condo developers to reserve 10 per cent of their buildings for three-bedroom “family friendly” units.
“I could just see now: ‘Where’s little Ginny?’ ” he said. “She’s downstairs playing in the traffic on her way to the park.”
By Tamsin McMahon - Thursday, August 9, 2012 at 2:19 PM - 0 Comments
They took over Champlain, N.Y., and turned it into fraud town, U.S.A.
Champlain, N.Y., is a quiet farming village nestled in the Adirondacks, just a stone’s throw from the Quebec border, with a reputation that far exceeds its modest circumstances. It has a population of just 1,100 people and nearly 300 companies—one for roughly every three residents—almost all of which, authorities say, are fake businesses set up by organized crime rings out of Canada.
For the past decade, law enforcement officials say, hundreds of millions of dollars scammed from American seniors, churches, charities and small businesses have flowed through the post office boxes and freight forwarding companies in Champlain and across the St-Bernard-de-Lacolle border to Montreal. It’s saddled Champlain with a reputation as the Fraud Capital of the U.S.A.
“I hate to see Champlain get tainted as a scam town, but I’m afraid it is,” says David Polino, who recently retired as the long-time president of the Better Business Bureau of Upstate New York. The bureau received more than 1,000 complaints about Champlain telemarketing businesses last year and opened 15 separate investigations into companies with a Champlain address. The problem has grown so large that at one point Champlain companies were responsible for nearly 40 per cent of all scams targeting small businesses across the United States, according to the Better Business Bureau. Nearly a third of the 5,500 complaints that land on the desk of the New York attorney general’s nearby Plattsburgh office involve just six addresses (mail forwarding facilities) in Champlain. The Better Business Bureau has issued a warning to all of its U.S. member businesses that any company with a Champlain, N.Y., address is probably a Canadian scam.
By Tamsin McMahon - Saturday, August 4, 2012 at 12:32 PM - 0 Comments
You’re in luck: HSBC’s new online guide is here to help
Comparing Canada to the U.S. has long been a favourite pastime north of the 49th. To help, British bank HSBC is offering an online guide for expats to help them navigate the cultural nuances of doing business in the two countries.
Americans, HSBC says, might seem self-centred, but only because they’ve been raised with a strong independent spirit. It’s one reason why you should never stand too close to an American “lest you impose on their sense of personal space.” Canadians meanwhile, are threatened by people who are too aggressive or ask too many direct questions. We prefer colleagues to have an “understated demeanour” and we aren’t really in touch with our feelings. During Canadian business negotiations, the bank warns, “it is better to state information with the words ‘I think’ rather than ‘I feel.’ ” If you’re attending a dinner party, Americans will gladly give you a house tour. But don’t ask for one here, since “Canadians only allow guests in their public rooms as a rule.” While in America, never “do anything that might be misinterpreted as sexual harassment,” the bank says. That warning doesn’t apply in Canada, where expats are warned to “avoid the V sign for victory” and to never, ever compare Canada with the U.S.
By Nicholas Köhler, Anne Kingston, and Tamsin McMahon - Thursday, August 2, 2012 at 10:20 PM - 0 Comments
Twilight fans have their hearts broken, Justin bieber’s neighbours complain, and Korea gets a kinder, gentler Kim
The Sisters of the Precious Blood founded their monastery in Charlottetown in 1929. More than 80 years later, Sister Ilene Mary Walsh, who joined the order half a century ago—the last P.E.I. woman to do so—has returned as the order’s general superior in Canada to close it down. The sisters have now just ﬁve nuns. “Like everybody else, Precious Blood sisters get old,” Sister Ilene told the CBC. “Our main ministry is prayer, but we still have to pay the bills and put food on the table. It takes a certain amount of energy and maybe a little bit of youth.”
The trip from hell
Mitt Romney’s first official overseas visit as the presumptive Republican presidential nominee proved to be one gaffe after another. First, the former Massachusetts governor outraged Londoners when he suggested the city was not prepared for the Summer Games. Then, in Israel, he referred to Jerusalem as the capital and attributed Israelis’ economic superiority over Palestinians to their culture. One unnamed Republican insider reportedly summed the trip up as “borderline lunacy.” U.S. Olympic legend Carl Lewis also weighed in: “Seriously, some Americans just shouldn’t leave the country,” the nine-time gold winner told The Independent.