By The Associated Press - Monday, May 20, 2013 - 0 Comments
Inside Yahoo’s latest comeback attack
SAN FRANCISCO – Yahoo is buying online blogging forum Tumblr for $1.1 billion as CEO Marissa Mayer tries to rejuvenate an Internet icon that had fallen behind the times.
The deal announced Monday represents Mayer’s boldest move yet since she left Google 10 months ago to lead Yahoo’s latest comeback attempt. It marks Yahoo’s most expensive acquisition since the Sunnyvale, Calif., company bought online search engine Overture a decade ago for $1.3 billion in cash and stock.
Yahoo is paying all cash for Tumblr, dipping into some of its remaining stash from a $7.6 billion windfall reaped last year from selling about half of its stake in Chinese Internet company Alibaba Holdings Group. Taking over Tumblr will devour about one-fifth of the $5.4 billion in cash that Yahoo had in its accounts at the end of March.
By Chris Sorensen - Friday, May 24, 2013 at 1:30 PM - 0 Comments
Chris Sorensen examines the false furor over the program and why businesses are desperate for it
Gord Nixon, the CEO of the Royal Bank of Canada, may have indirectly sealed the fate of hundreds of small-and medium-sized businesses across the country last month when he decided—no doubt at the urging of the bank’s public and government relations staff—to apologize for RBC’s decision to outsource 45 information technology positions, including at least one job that ended up being handed over to a temporary foreign worker.
Faced with public outrage at a time when unemployment is stuck at 7.2 per cent, the normally business-friendly Conservative federal government moved quickly to make its Temporary Foreign Worker Program more difﬁcult and expensive for companies to access. But for all the populist headlines about foreigners being parachuted into the country to steal jobs from Canadians, the reality is that many businesses remain desperate for employees and, more often than not, the jobs going to temporary foreign workers are positions Canadians are either unable, or simply unwilling, to fill. “The real effect of this is going to be frustration of business owners,” says Audrey Guth, the director of Toronto’s Diamond Global Recruitment Inc., which specializes in helping Canadian businesses bring in foreign workers. “If you make it too difficult, businesses are going to close down.”
Many of the 213,516 temporary foreign workers who came to Canada last year filled low-paying, menial jobs, according to data provided by Citizenship and Immigration. More than 31,000 were agricultural workers. Another 6,200 were nannies, while 4,000 became counter staff or fast-food cooks. Others filled higher-paid skilled positions—often, recruiters say, because there aren’t enough Canadians with the necessary training, or because the jobs are located in smaller, more remote communities that don’t appeal to Canada’s highly urbanized population. They include truck drivers (1,620 workers), mechanical engineers (1,490) and computer programmers (2,005). The trend has created a distorted labour market. In Newfoundland and Labrador, for example, employers brought in 2,285 temporary foreign workers last year, up 75 per cent from 2008, despite an unemployment rate of 12 per cent in the province, nearly double the national average.
While figures like that lead critics to question whether Ottawa’s program is being abused, Guth and others argue that, with few exceptions, employers would prefer to hire locally, saving themselves time and money. The problem, Guth says, is that applicants are nowhere to be found. “You can’t say we’re taking jobs away from Canadians when we’ve giving them every opportunity to fill these jobs first.”
It’s doubtful the reforms being introduced by Ottawa will do much to address the underlying issues. Among other things, employers seeking to tap temporary foreign workers will now pay more for work permits and higher fees to obtain a “labour market opinion” from Human Resources and Skills Development Canada, which is needed to verify a lack of available workers. Employers will also be barred from paying foreign workers as much as 15 per cent less than the prevailing wage for skilled positions, and ﬁve per cent less for lower-skilled work—a measure originally intended to offset the artiﬁcially high wages some employers were being forced to pay to attract applicants in boomtown communities.
Industries facing a chronic lack of workers say most companies are already using the program the way it was intended. The roughly two per cent of the 1.1 million restaurant jobs in Canada filled by temporary foreign workers are concentrated in the Prairies, where the lure of the oil sands has peeled unskilled staff from other employers, according to the Canadian Restaurant and Foodservices Association. (Alberta’s unemployment rate is just 4.4 per cent.) “In Ontario, virtually none of our members are using the program,” says Garth Whyte, association president. “But there was a major hotel in Alberta who phoned us almost in tears because a big oil company just snatched up 40 of their employees.”
Whyte argues it’s a myth that foreign temporary workers are cheaper to use. Companies must first pay to advertise the positions locally in newspapers and on national job boards. They then incur the costs associated with navigating the government’s program, often with the help of a recruitment agency.
Finally, they must pay for the workers’ travel to and from Canada. The entire process can take up to six months, while the position sits vacant, resulting in lost sales. “If you’re spending thousands of dollars to bring in temporary foreign workers, you’re obviously not doing it to save money,” Whyte argues.
It’s not just that the Temporary Foreign Worker Program is expensive for employers to use. The bigger hurdle is the lack of Canadians willing to take on the kinds of jobs the program is used to fill. Mobility is one concern—a high rate of home ownership means fewer people are freely ready to pull up roots and move for work, while some have suggested cold weather in places like northern Alberta is also an impediment. But Employment Insurance is another. There is a demonstrated reluctance of people to move for jobs. Consider the hue and cry that went up when Ottawa sought reforms that require recipients to look for work within a one-hour commute from their home. If unemployed people aren’t willing to drive an hour for a job, they aren’t going to move across the country. For that matter, there’s evidence many Canadians would rather pick up EI than take a job in their own community. Diane Finley, the minister of human resources and skills development, was informed that Alberta employers received 1,261 confirmations for temporary foreign-worker food-counter positions in January 2012 just as 350 people made a claim for EI in the same occupation and province, according to documents obtained by the CBC.
Having to turn to foreign workers to fill McJobs is one thing, but as the data from Citizenship and Immigration shows, even engineers and computer programmers are in short supply in parts of the country. It all points to what Kevin McQuillan, a professor of sociology at University of Calgary, and others say is a widening “mismatch” between what employers are looking for and the types of jobs Canadians workers want to fill. “We are turning out huge numbers of Canadians out of our colleges and universities, and the great majority of people we bring in as permanent immigrants are well-educated,” he says. “But we need to look at how well our educational institutions are preparing students for the labour market. We need to convince young people and their parents to pay attention to the labour market when deciding what to study.” While he doesn’t dispute that many employers have a difficult time filling positions, McQuillan questions whether leaning on temporary foreign workers is anything but a Band-Aid solution. “I don’t think we want a society where a big part of our economy is being cycled in and out for a few years at a time,” he says.
Employers will need to do their part too. In the case of skilled work, many companies have decided it’s more cost-effective to hire skilled workers on a temporary basis rather than face the prospect of having to retrain them or pay for skills upgrades down the road. A recent study by the Conference Board of Canada found that investment in employee training has fallen nearly 40 per cent in Canada since the early 1990s—a trend that obviously needs to change. Meanwhile, fast-food restaurants and retail stores may need to consider offering better wages and benefits if they’re ever going to attract Canadian employees in the numbers they require to staff their businesses, McQuillan argues.
That won’t be easy in a country where a price hike of a few cents at the local gas station or coffee shop is a recipe for angry customers. “It’s easy to say that,” said one manager of a busy oil and lube chain in Alberta that sources half of its employees through the Temporary Foreign Worker Program (he asked his name not be published lest it generate an RBC-like backlash for his business). “But if everything you purchased in a day suddenly went up 20 per cent, what do you think people would do?”
By Mike Moffatt - Thursday, May 23, 2013 at 12:29 PM - 0 Comments
This column appeared first on CanadianBusiness.com
In a sharply worded press release, a group known as the 9948 Fair Treatment Coalition states that documents it obtained through Access to Information “raise disturbing questions” about the Canada Border Services Agency (CBSA) and the Department of Finance’s conduct in the so-called iPod tax dispute. The 9948 group includes a number of manufacturers and retailers of MP3 players, television monitors and computer speakers, including the Canadian arms of Sony, Toshiba, Panasonic, Costco and WalMart.
The Coalition alleges that “the Canada Border Services Agency (CBSA) has misled dozens of Canadian companies for years by inducing them to import MP3 players and other goods into Canada duty-free, all the while planning to later collect millions of dollars in back-duties on the goods, with interest in penalties.” The release goes on to quote members of the 9948 group, including, Ken Buschlen, VP of Finance for Panasonic Canada Inc. who explains that “[the] CBSA issued us authorization to import products duty-free, but now it appears that CBSA intended to claw back the duties later. That is plainly unfair.”
By Chris Sorensen - Tuesday, May 21, 2013 at 3:28 PM - 0 Comments
The Canadian Boreal Forest Agreement was billed as a game-changer when it was signed in 2010. After years of battling each other in the media and on logging roads throughout the country, 21 forestry companies and nine environmental groups vowed to try a different approach by working side by side to create a healthy, sustainable industry that everyone could be proud of.
Perhaps not surprisingly, it didn’t work.
By Erica Alini - Tuesday, May 21, 2013 at 2:52 PM - 0 Comments
Outgoing Bank of Canada Mark Carney had said before that, as he leaves Canada to head the U.K.’s central bank on July 1, the economic picture he’s leaving behind in his home country is that of a glass that is “more than half full.” Today, in his last public remarks as a Canadian central bank official, he reiterated that point.
What awaits the next BoC chief is a delicate transition from a growth model based on household consumption, real estate investment and government stimulus to one propelled by exports and business investment, Carney said at the Board of Trade of Metropolitan Montreal.
“We cannot grow indefinitely by relying on Canadian households increasing their borrowing relative to income.”
By Kevin Milligan - Thursday, May 16, 2013 at 12:48 PM - 0 Comments
Christy Clark and the B.C. Liberal government begin a new term facing a propitious fiscal situation, arguably second in Canada only to Saskatchewan. Net debt as a share of GDP is low (only Saskatchewan and Alberta’s are lower), and B.C. has a shot at balancing the budget in 2013-14 – along with Saskatchewan, Quebec, and Nova Scotia. The Liberals made a few big-ticket election campaign spending promises, but, on the tax side, they also indicated they intend to pad revenues over the next few years with higher tax rates for personal and corporate income. In short, the new government has much freedom to work on new projects without having to fight festering fiscal fires.
That said, budgets must still be watched, lest the current advantages be frittered away. Below, I outline the main challenges on both the revenue and expenditure sides.
By Tamsin McMahon - Thursday, May 16, 2013 at 6:00 AM - 0 Comments
Tamsin McMahon explains why there’s a growing chorus of opposition to the fiscal straitjacket
As head of the world’s largest bond fund, Bill Gross has the kind of voice that can move markets. For much of the last few years Gross, who runs the $2-trillion Pacific Investment Management Co., has been warning about the day of reckoning that would befall countries like the U.S. and Britain as they buried themselves under mountains of debt. In 2010, Gross declared British bonds were “sitting on a bed of nitroglycerine” and dumped his entire holdings of U.S. Treasuries with a prediction that soaring government debts would pose the greatest risk to bondholders.
This year, Gross started buying again. His flagship mutual fund is now made up of nearly a third U.S. Treasuries. These days, Gross warns that the biggest problem facing Western economies isn’t the spectre of rising government debt, but that the sweeping budget cuts countries are using to try to repair their balance sheets are killing investor confidence. Governments “have erred in terms of believing that austerity, fiscal austerity in the short-term, is the way to produce real growth,” Gross told the Financial Times last month. “It is not. You’ve got to spend money.”
Gross is part of a growing chorus of opposition to the fiscal straitjacket being imposed on many European countries in the aftermath of the financial crisis. When they were first embraced, such policies seemed like a logical solution to the reckless spending that drove half of Europe to the brink of collapse, a necessary dose of tough medicine to clear the way for future growth. But critics argue that years of tax hikes and spending cuts have instead left countries awash in unemployment, stagnant growth and mounting debt.
By Erica Alini - Wednesday, May 15, 2013 at 9:52 AM - 0 Commentsof Photos
By The Associated Press - Wednesday, May 15, 2013 at 6:32 AM - 0 Comments
SAN FRANCISCO – Google is expected to use its annual software developers’ conference to showcase the latest mobile devices running on its Android software, while also unveiling other features in its evolving product lineup.
The gathering, scheduled to begin Wednesday morning in San Francisco, provides Google Inc. with an opportunity to flex its technological muscle in front of a sold-out audience of engineers and entrepreneurs who develop applications and other features that can make smartphones and tablets more appealing.
Reporters from around the world also will be on hand, giving Google a chance to generate more hoopla about its latest innovations.
By James Cowan - Tuesday, May 14, 2013 at 8:56 AM - 0 Comments
James Cowan on the problem with the Mother Corp.’s digital push
Kirstine Stewart switched in April from running the CBC’s English service to leading Twitter Canada. Plenty of self-styled media critics interpreted Stewart’s move as a high-profile defection from stagnant traditional media to a shiny digital upstart. That assessment is not just wrong, it’s backward: Twitter hired Stewart specifically to court established, traditional media outlets because it wants to establish paid partnerships with content producers; meanwhile, CBC is a dominant digital player in Canada, competing hard—and successfully—against private news, music streaming, and video-on-demand providers.
The online success of the CBC should be laudable. Its website received an average of 6.2-million unique visitors last year, making it the most popular Canadian website. Around 4.3-million people visit the CBC News site each month, besting both The Globe and Mail and Huffington Post. Adding to this success is an ambitious five-year plan that will open digital-only news operations in cities like Hamilton and Kamloops and allocate 5 per cent of the overall programming budget to digital content. Once upon a time, it was only private TV and radio broadcasters who had reason to grumble about competing with the Crown corporation; in building its online empire, the CBC is taking on everyone from newspapers to Netflix.
By The Canadian Press - Tuesday, May 14, 2013 at 6:59 AM - 0 Comments
ORLANDO, Fla. – Several questions about the future direction of BlackBerry will be answered…
ORLANDO, Fla. – Several questions about the future direction of BlackBerry will be answered this morning as the head of the company takes the stage at its annual conference in Orlando, Fla.
Chief executive Thorsten Heins is expected to deliver a speech that will give investors and tech industry players an idea of where Blackberry is headed for the rest of the year.
That could include unveiling details about a lower priced smartphone for some international markets.
Such an announcement would move the company closer towards what Heins has envisioned since he stepped into the leadership role nearly a year and a half ago.
By Stephen Gordon - Monday, May 13, 2013 at 11:44 AM - 0 Comments
Tom Mulcair’s recent article for the Institute for Research on Public Policy (IRPP) raises perhaps more questions than it answers about the NDP’s positions on the economics of energy and the environment. Here are a few key passages:
An NDP government would establish a comprehensive upstream cap-and trade system to meet our international commitments to fight climate change and rigorously enforce environmental laws here in Canada.
We’ve heard this before, but we still don’t know very much about what this system would look like. Does “comprehensive” mean “applicable to all GHG emissions”? What are the estimated costs to consumers? What measures will be taken to compensate low-income households for these costs?
On our radar this month: Australia’s $5-million visa and Tim Hortons vs. Highfields Capital Management
By Econowatch - Sunday, May 12, 2013 at 12:00 PM - 0 Comments
•In the wake of Pershing Square’s shakeup at Canadian Pacific, another activist investor from the U.S. has set its sights on an iconic Canadian brand. The hedge fund Highfields Capital Management is pushing for change at Tim Hortons, including scrapping its unsuccessful U.S. expansion strategy. Highfields owns four per cent of the coffee and doughnut chain’s outstanding shares.
• Passengers on Frontier Airlines who buy basic fares can now expect to pay as much as $100 to put a carry-on bag in the overhead bin, where finding space for luggage has become “unacceptably difficult,” the U.S. company says. Meanwhile, a new British study shows several budget airlines have been dramatically hiking baggage and booking fees this year. Those extra costs can make up 65 per cent of total ticket prices.
By Econowatch - Saturday, May 11, 2013 at 3:00 PM - 0 Comments
By Econowatch - Saturday, May 11, 2013 at 12:31 PM - 0 Comments
By Econowatch - Saturday, May 11, 2013 at 9:00 AM - 0 Comments
By Chris Sorensen - Friday, May 10, 2013 at 5:40 PM - 0 Comments
Outgoing Bank of Canada governor Mark Carney’s stick-handling of the 2008 financial crisis was widely viewed as a central-banking success story; it helped him snare his new gig as governor of the Bank of England, starting on July 1. But in many ways, Carney’s replacement, Stephen Poloz, the head of Export Development Canada, has an even more vexing task in front of him. Whereas Carney moved swiftly but predictably to drop benchmark interest rates when faced with the global financial crisis (and, somewhat less predic ably, announced he intended to keep them there for an extended period), Poloz faces several smaller, but no less troublesome threats: an overheated housing market, soaring personal debt, stubborn unemployment and anemic GDP growth. And they come at a time when conventional monetary policy has far less influence, given that money has been so cheap, for so long.
By Erica Alini - Friday, May 10, 2013 at 10:02 AM - 0 Comments
- The economy added some 12,500 jobs in April, roughly in line with expectations. The uptick in employment comes after a steep 54,500 dip in March.
- The gains were just enough to keep the unemployment rate steady at 7.2 per cent.
- Beyond the headline numbers, the details of the report were more positive. The job gains, for example, were mostly in full-time work.
- Also, manufacturing churned out some 20,600 new positions, the largest increase since May 2012. In general, the goods-producing industries delivered a strong performance, with 24,500 jobs added, whereas the service sector shed 12,000.
- Surprisingly, it was the public sector that lead the overall employment increase, with gains in public administration and health care.
- Provincially, employment rose in Alberta, declined in Manitoba, New Brunswick and Newfoundland and Labrador, and remained roughly unchanged in Ontario and Quebec.
By Erica Alini - Thursday, May 9, 2013 at 5:17 PM - 0 Comments
It must be a singular experience to be overshadowed by someone who isn’t even there—anyone wishing to know what that feels like can turn to Jim Flaherty.
Canada’s finance minister was the sole representative from North America at a conference on trade and investment sponsored by the U.K. government today in London. The other illustrious panelists included British Chancellor of the Exchequer George Osborne, German Finance Minister Wolfgang Schäuble and International Monetary Fund Managing Director Christine Lagarde. And yet, Canada’s man was unmistakably outshone by Uncle Sam—in absentia.
“This is, if you like, for the West and countries like Britain a sink or swim moment,” British Prime Minister David Cameron told the very same audience a few hours earlier. And no one in the room made any effort to conceal that the U.S. is a much bigger buoy for Europe than Canada when it comes to boosting growth by negotiating free trade deals.
In questions from the audience—made up largely of the London financial elite—and answers from the European trio on stage, the trade accord Ottawa hopes to soon ink with the European Union sounded almost like an afterthought compared to the parallel agreement the EU has more recently begun negotiating with the U.S.
The Conservatives desperately need to close the deal, which the two sides started discussing in 2009 and which is supposed to generate around $28 billion in new business a year. But Europe’s attention has unmistakably shifted to the larger U.S. prize.
By Erica Alini - Wednesday, May 8, 2013 at 5:00 PM - 0 Comments
Officially, the Great Recession in the United States ended in June 2009. For the following 2½ years, though, the recovery has only blessed the rich. For the rest of America, it felt like the recession kept on going.
That’s according to research based on the latest available data on the wealth of U.S. households. At the height of the financial crisis, the economy spared few American families, rich or poor. But once it started growing again, relief came unevenly. Only households in the top seven per cent of the income ladder saw their net worth—assets minus debt—grow between the second half of 2009 and the end of 2011, the recent Pew Research Center analysis shows. For the bottom 93 per cent, wealth continued to decline, shrinking by four per cent—more worrisome evidence, say economists, of rising inequality in the U.S.
Blame goes to the opposite trajectories of financial assets and real estate. Rising stock prices and soaring gains in bonds gave a quick lift to America’s top earners, for whom wealth is mostly concentrated in financial holdings. For most people, however, their homes are their most valuable assets and the housing market kept sliding through 2011. With bond prices at record highs and stocks up 34 per cent in December 2011 from June 2009, America’s eight million richest households saw their mean net worth grow to $3.3 million from $2.6 million. For the other 111 million households, mean net worth fell by $6,000 to an average of $136,426, as home prices declined five per cent in the first 30 months of the recovery.
By Stephen Gordon - Wednesday, May 8, 2013 at 10:00 AM - 0 Comments
I wrote a lot about the decision to cancel the mandatory long-form census and replace it with with the voluntary National Household Survey (NHS) in 2010-2011 (see here: , , , , , , , , , , , ), but that was all prologue. The real implications of the new survey are only now being played out with the release of the the numbers – I can’t bring myself to use the word “data” – collected by the NHS.
Here’s what Statistics Canada has to say about the quality of NHS numbers:
By Jaime Weinman - Tuesday, May 7, 2013 at 5:51 PM - 0 Comments
With higher revenues and more viewers, Netflix believes its defeat of cable TV is finally at hand
Netflix is like a Goliath taking on the other, older Goliaths of media. Though it started in the U.S. as a DVD rental company, it has stuck to founder Reed Hastings’ belief that streaming video is the future. Its expanded investment in that area—including original content such as the series House of Cards—has been amply rewarded. First-quarter revenues were more than $130 million higher this year over last. And when it announced its latest financial data recently, the stock price shot up 24 per cent on the day.
Emboldened by that success, Hastings has taken to declaring that Netflix is about to defeat cable TV. In a letter to investors, he proclaimed that “Internet TV will replace linear TV,” and virtually taunted HBO and other competitors with reminders of Netflix’s advantages: “They have to attract an audience for Sunday at 8 p.m., say. We can be much more flexible.” Hastings even has evidence to back up his belief that Netflix can take on HBO and win: according to the Hollywood Reporter, Netflix now has 29.2 million U.S. subscribers to HBO’s 28.7 million.
What Netflix doesn’t have yet is original content to match the cable giants it derides as outdated. Though House of Cards received some good reviews, Hastings said it had only a “gentle impact” on subscriptions. The service’s newest original, Hemlock Grove, was blasted by the Los Angeles Times as “terrible in ways that mock the meaning of the word.” Netflix is betting a lot on new episodes of Arrested Development, launching in May, but fans shouldn’t expect the epic story arcs of the original version: due in part to scheduling and budget limitations, every episode will focus primarily on only one character.
By The Associated Press - Saturday, May 4, 2013 at 12:17 PM - 0 Comments
Make way for Berkshire Hathaway’s annual meeting
OMAHA, Neb. – Part rock concert, part investment workshop, the annual gathering of Berkshire Hathaway shareholders is an odd mix.
But that’s just how the faithful crowd of more than 30,000 who attended Saturday’s version likes it.
Getting the chance to learn about business and life from Berkshire CEO Warren Buffett and spend the day with like-minded investors made it worthwhile to brave Saturday’s cool, rainy weather in Omaha, Nebraska.
The level of appreciation shareholders have for Buffett becomes clear as he tours the meeting’s 200,000-square-foot exhibit hall each year.
Admirers held their cellphones and iPads in the air as they surrounded the billionaire Saturday morning. A pack of security guards created a buffer around Buffett as he visited displays selling Berkshire’s See’s Candy, explained BNSF railroad’s virtues and highlighted some of the company’s other 80-plus subsidiaries.
By Mika Rekai - Friday, May 3, 2013 at 12:49 PM - 0 Comments
The Karma was once the future, now it’s trying to stay on the road
When the Fisker Karma debuted in 2008, its stunning design and innovative plug-in hybrid drivetrain were heralded as the future of America’s automotive industry. Today, the company is on the brink of bankruptcy after selling fewer than 2,000 cars worldwide.
Last week, Fisker missed a $10-million loan payment to the U.S. government—it had been approved for a $529-million loan in 2009, and had received $192 million before being cut off—and the company is now being held up by critics as an example of the Obama administration’s failed green policies. At a hearing before Congress, conservatives accused the administration of making a rash and risky bet on Fisker and its untested technology.
Indeed, when Karmas landed on showroom floors in 2011, they were riddled with defects, and several needed their batteries recalled. And at $100,000, they were roughly the same price as a Porsche 911, which doesn’t need to be pulled over to be recharged.
By Mike Moffatt, Canadian Business - Friday, May 3, 2013 at 11:31 AM - 0 Comments
This article first appeared in Canadian Business.
The government’s latest position on Budget 2013’s tariff changes is that the modifications are necessary to ensure that China does not receive special treatment. As the prime minister put it, “we do not think it is appropriate to have special tariff reductions only for companies from countries like China.” This is problematic and not simply because these changes affect 72 countries, of which China is only one. The truth of the matter is that the existing treatment of imports from China is not particularly favourable but there is a much better way to ensure that imports from China receive Canada’s least favourable tariff treatment.
The Customs Tariff is exceedingly complex, with up to 16 different tariff treatments (rates) for each product, based on the country of origin of that product. Countries can be assigned multiple tariff treatments and, for a given product, are assessed the lowest of the multiple rates that apply.