Live by the Blackberry…

By The Canadian Press - Tuesday, January 1, 2013 at 11:19 AM - 0 Comments

TORONTO – After a year of persistent struggles, BlackBerry-maker Research In Motion hopes to launch a comeback in 2013 as it works to convince customers its latest smartphones are a worthy alternative to the growing list of competitors.

It’s a battle that won’t be won overnight, and depending on who you ask, might not be won at all.

That’s the challenge facing RIM in the ever-changing technology sector, where critics say the company spent too many years enjoying the success of its products rather than innovating to create new ones.

In 2012, RIM tried to recover from its mistakes with a major overhaul of its leadership and a revamped operating system called BlackBerry 10. On Jan. 30, the company will unveil a new line of smartphones running its latest operating system as it enters the most important months of its history, ones that will likely determine whether RIM survives in its existing form.

“They can’t afford to have another failed launch,” said Richard Tse, an analyst at Cormark Securities Inc.

“This is really their last kick at the can.”

Once the most valuable company in Canada, RIM has endured a meteoric fall from grace over the past several years. Even loyal BlackBerry users scrapped their old phones to join the growing number of touchscreen alternatives that have hit the market, in particular Apple’s iPhone and the Samsung Galaxy S3.

But it was this past year in which RIM was forced to face what its executives had long denied: the company was losing market share to its competitors at an incredibly fast rate.

“BlackBerry has become kind of an uncool name,” said Zeus Kerravala, a telecom equipment analyst at ZK Research in Boston.

“Over the past couple of years product quality has gone down, they’ve had some service outages, battery life isn’t as good. They got themselves so far behind, and there’s no reason why a consumer would sit around to wait for a device where they’ve disappointed them before.”

Signs of a troublesome year were already developing for RIM as the ball dropped in New York City on New Year’s Eve 2011.

With no new products to promote, executives had attempted to reinvigorate the struggling brand with a splashy advertising campaign on Dick Clark’s New Year’s Rockin’ Eve special, one of the most watched programs of the evening. Celebrities prominently handled the company’s BlackBerrys live on air while musicians performed in front of billboards for the device.

But investors remained unimpressed with RIM’s slipping hold of the U.S. market and within weeks co-CEOs Jim Balsillie and Mike Lazaridis bowed to pressure, receiving a combined $12 million to step down from their roles atop the company.

The two men were shuffled to director roles, replaced by Thorsten Heins, the former chief operating officer. Balsillie left the company entirely two months later.

With Heins in the top position, RIM began a major overhaul of its middle management. New executives stepped into key roles like chief marketing officer and chief operating officer, while Heins promised in May that RIM would tighten its focus and remove a “little fat on the hips.”

But with all of the changes, Heins couldn’t overcome the fact that development of the BlackBerry 10 operating system was woefully behind schedule. Already delayed from a launch in 2011, the CEO was forced in June to further push the debut into 2013, missing crucial sales periods like the back-to-school and holiday shopping seasons.

Analysts cringed at the decision, saying it could prove to be the unravelling of the company if executives were forced to dip into its $2 billion cash reserve in order to stay afloat over the six-to-eight months.

Heins had a somewhat different idea for how to keep the company operating in the short term. While he warned investors that RIM would face further pressure on its financial results over the next several quarters, the company was also working on ways to help tide the company over in the short term.

First, Heins launched a plan to save $1 billion across RIM’s operations by February 2013. Under the initiative RIM closed some of its manufacturing facilities and announced plans to lay off about 5,000 workers.

Then, the company began to refocus its sales efforts on developing countries like Indonesia and Nigeria, where consumers were hungry for low-cost smartphones and the BlackBerry was still considered a status symbol.

Selling older phones to smaller markets has proven to be a temporary fix for RIM. In recent quarters, the company has managed to keep its overall subscriber base growing, even though it has faced quarterly losses.

With the company heading into uncertain territory in the new year, RIM’s stock price has traded erratically. Since falling to its lowest level in about a decade in September, the company’s shares have surged about 125 per cent, helped by a number of analyst upgrades.

“Being delayed into 2013 it may not be a bad thing,” said Tse.

RIM’s competitors “lined their products up before the holiday season, so this gives them a forum to talk about their new products (in the new year) without a lot of traffic in their way.”

Kris Thompson of National Bank said the company still has a shot at regaining some part of their former fame, but he noted that it doesn’t necessarily mean they need to knock Apple or Android out of their top spots.

“When we’re growing up we’re always taught to be competitive, to be No. 1, but you’ve got to be realistic,” he said.

“If RIM can get five per cent (of the market) they’ve got a good business model, if they can get 10 per cent, then fantastic.”

Thompson also pointed out that some consumers have been dissatisfied with the latest incarnation of the iPhone, which was accented by the faulty Apple Maps programs that sometimes misdirected users to the wrong locations.

“I have the iPhone 5 and I’m not really too jazzed about it,” he said. “I may even be willing to switch over.”

But even if RIM proves naysayers wrong and delivers a top-selling device, the company will still have an uphill battle as it races against some highly aggressive competitors.

“That’s one of my worries,” said Bill Kreher, a technology analyst with financial services firm Edward Jones.

“Even if they have a great product at launch, there’s got to be followup and it has to be in a timely fashion.”

That likely means that analysts will continue to speculate on the survival of RIM for months, or years, to come. Persistent rumours have suggested the company could sell off parts of its operations to shore up cash, but despite hiring two adviser firms in early 2012, no transactions have materialized.

“Everybody loves a comeback story, but there’s got to be some legitimate follow-through,” Kreher added.

Quebec corruption probes heating up

By The Canadian Press - Tuesday, January 1, 2013 at 11:18 AM - 0 Comments

MONTREAL – In the time it took Quebec’s corruption inquiry to complete its fall sitting, three long-standing mayors had resigned, municipal parties were decimated or disbanded, and a shadow of suspicion spread over the political world.

Turn the page to 2013 and the corruption-fighting agenda is set to move beyond municipalities into the provincial arena.

The head of the inquiry and the boss of the province’s anti-corruption unit have both signalled that their gaze will soon move beyond the municipal level.

The police unit has arrested dozens of people but it may just be getting warmed up. The unit boss says there are more than 20 ongoing investigations not only into construction but also into hospitals, computer-service contracts and even Quebec’s highly touted northern development plan.

As for the Charbonneau commission, it began sitting in 2012 and quickly shocked Quebecers with tales of pervasive corruption in the province’s construction industry. It heard about a conspiracy to drive up the cost of public projects, with the illicit profit going to the Mafia, political parties, companies and crooked bureaucrats.

How wild was this fall? As the session began, an inquiry lawyer hinted that some “juicy” revelations were coming. Within weeks that same lawyer, Sylvain Lussier, was himself forced to resign because of the appearance of a conflict of interest. He had represented a company named at the probe.

The departure of Lussier and his deputy forced an unscheduled seven-week break after the inquiry heard just 30 of the roughly 50 witnesses who were expected to testify in the fall.

Some wonder if the inquiry has missed its mark.

A political science professor who served as an advisor to the federal Gomery Commission says that France Charbonneau hasn’t come close to covering her intended ground.

For all the bombshell-laden testimony that led, within one week, to the departure of two of the province’s longest-serving mayors, in Montreal and Laval, she said the focus has been limited mostly to Montreal and a few nearby towns.

Carolle Simard said the probe has fallen short in other places like the infiltration of organized crime, allegations of corruption within trade unions, and provincial politics and party financing.

“I think we’ve heard from the little fish, but the big fish are still unknown to us,” said Simard, a professor at the Universite de Quebec a Montreal.

“We’ve heard plenty of rumours about them but we don’t know who they are and we haven’t seen them on television.”

Simard admits she’s generally critical of public inquiries and says she prefers police investigations. She says she wasn’t enthralled by the end of the fall session, finding the investigation “redundant and repetitive.”

“I don’t think they are necessarily the answer to all our problems and I believe more in police investigations where people are arrested and tried,” Simard said.

She also questioned the motives of some witnesses at the inquiry. She suggested they might be testifying not because they want to share the truth — but because they believe it might help them avoid criminal charges.

However, the province’s anti-corruption police unit, known as UPAC, says the ongoing inquiry hasn’t really hampered its work.

Robert Lafreniere, who heads the unit, had originally been critical of a public inquiry when it was first announced. He said during a year-end news conference this week that his concerns were unfounded.

“I was worried that it could harm our police investigations,” Lafreniere said. “But we find that Charbonneau has masterfully assured that our investigations are unaffected.”

The inquiry has also been criticized for allowing the names of certain people to be mentioned during the live hearings without giving them a chance to immediately respond.

As names and allegations were lobbed like live grenades for several weeks, reputations were hit. Most people said they were keen to respond on the witness stand.

Among them was former Montreal mayor Gerald Tremblay, who resigned under heavy pressure. While quitting, he said he had been eager to testify about allegations he’d turned a blind eye to illegal party financing and he expressed frustration at being forced to wait.

That’s par for the course for a commission of inquiry, which can tarnish reputations, says a law professor at the University of Ottawa who has followed the hearings.

Charles-Maxime Panaccio says the names were not mentioned arbitrarily. He says not allowing people to testify right away could be an inquiry tactic to encourage others to come forward.

“A commission of inquiry can have some unfortunate consequences for certain people and can, for a time, have an effect on some people’s reputation,” Panaccio said.

In one example, inquiry officials published a list of people who had supposedly met at an exclusive Montreal club.

After sparking an instant furor, the inquiry officials later noted that they were actually unsure of what people discussed at those meetings and even whether the people listed on the club logs had really sat down together.

Justice Charbonneau has promised that everyone who wants to be heard will be questioned by inquiry officials, and she said those with relevant information will be invited to testify on the stand.

The next wave of testimony could potentially include longtime Mafia boss Vito Rizzuto, who is rumoured to have been subpoenaed. Police confirm that they have met with the famous Mafioso but will not confirm the subpoena.

A onetime Rizzuto associate, Raynald Desjardins, is now battling to avoid the witness stand. Currently awaiting trial on first-degree murder charges in the killing of a former Bonanno crime family boss, Desjardins’ name has come up in a number of construction-related investigations by provincial police.

The prospect of suspected mobsters testifying on live TV would be a generational throwback in Quebec.

The commission d’enquete sur le crime organise, known best by the acronym CECO, was a public inquiry into organized crime’s infiltration of legitimate business that started in 1972 and it also saw mobsters and their victims testify under the glare of camera lights.

Pierre de Champlain, a Mafia expert and retired RCMP analyst, said most of the Mob bosses didn’t end up offering much in the way of substance back then.

Many were sent to jail for contempt of court. Among them was Paolo Violi, whose criminal empire began crumbling after his arrest.

Violi was eventually murdered, and his family was supplanted by the Rizzutos.

“The (1970s inquiry was) followed religiously — like television episodes or a soap opera. People were glued to it,” de Champlain said.

The Charbonneau inquiry picks up again on Jan. 21.

Time is short. Commissioners must table a final report by Oct. 19, 2013, but Panaccio said he thinks the mandate will be extended.

“I think they’ve just started to uncover things and it’s looking at very serious stuff that is relevant to the public’s confidence in institutions,” Panaccio said.

“In my opinion it should get as much time as it needs to get to the bottom of the issues.”

Ontario gets new premier in late January and maybe another election in 2013

By The Canadian Press - Tuesday, January 1, 2013 at 8:06 AM - 0 Comments

TORONTO – Ontario will get a new premier — and possibly another election — in 2013 after a series of controversial decisions by Dalton McGuinty left the legislature in limbo and tainted his legacy as the education premier.

McGuinty shocked the province in October when he announced his resignation and prorogued the legislature indefinitely amid controversies over his government’s decision to cancel two gas plants and the Ornge air ambulance scandal.

While his resignation triggered a Liberal leadership race that will culminate with a new premier being chosen on Jan. 26, it is his government’s threat to use the contentious Bill 115, which allows the government to impose new collective agreements on teachers and ban strikes, that could cause serious labour unrest in the new year.

The minority Liberal government gave teachers in the public system until Dec. 31 to negotiate contracts with school boards modelled on agreements signed with Catholic and Francophone boards, which froze the wages of most teachers and restricted their ability to bank sick days.

Public elementary teachers began job action in the fall and launched rotating one-day strikes prior to the Christmas break, with the government threatening to use the legislation to end any walkouts that lasted longer than 24 hours.

High school teachers did not stage strikes, but withdrew from all extracurricular activities. They vowed that if the government does impose new two-year agreements, the boycott would remain in place for the entire two years, while elementary teachers said they would step up their protests against the legislation.

Ironically, it was McGuinty’s attempts to engineer the majority government he was denied by one seat in 2011 that turned the teachers’ unions — who used to spend millions of dollars helping Liberals get elected — against him.

McGuinty lured away veteran Tory Elizabeth Witmer with a plum job as head of the Workplace Safety and Insurance Board, freeing up her Kitchener-Waterloo seat for a September byelection. He then recalled the legislature for an emergency session in August to pass Bill 115, which he said was needed to avoid teacher strikes right after Labour Day.

Teachers were furious over what they said was an unconstitutional move to take away their right to fair bargaining and worked hard in the byelection to ensure the New Democrats won the seat for the first time ever, denying McGuinty his majority in the process.

Late in the year, the Elementary Teachers’ Federation of Ontario offered a temporary truce if Education Minister Laurel Broten waits until a new premier is chosen before she imposes new contracts on its members, but there was no indication she would accept the offer.

Only one of the seven Liberal leadership candidates — former provincial education minister Gerrard Kennedy — has promised to repeal Bill 115. But most have suggested they would move to recall the legislature in February with a Throne Speech, likely followed within a month by a provincial budget.

Many observers believe the budget could be defeated, triggering another provincial election. But that’s not the only option.

After successfully convincing the minority government to twice change its budget last spring — to add a tax on incomes over $500,000 and to scrap a scheduled reduction in Ontario’s corporate tax rate — the NDP say they’ll try to do that again in 2013.

“Some people would prefer to be writing their election platforms right now, gearing up for an election, but New Democrats have always been more interested in getting results for people,” said NDP Leader Andrea Horwath.

“I’m not clamouring for an election like the other folks. What I’m doing is actually taking my time to listen to Ontarians.”

Progressive Conservative leader Tim Hudak said he’s not convinced the legislature will be recalled before an election, especially after one of the leadership front-runners, Sandra Pupatello —who did not run for re-election in 2011 — said she wouldn’t want the house sitting without her in it to lead the government side.

The Conservatives have been acting as if they expect an election in the spring, releasing a series of white papers outlining potential policy platforms such as privatizing lotteries, casinos and liquor stores, cutting the size of the civil service and reducing public sector pension benefits.

Hudak says Ontario can’t afford to keep the high-spending Liberals in power, especially when they are propped up by the NDP, and voters will see a very clear difference with the Conservatives.

“It’s a very clear choice between the other two parties that just want government to get bigger and more expensive and raise your taxes,” said Hudak.

“We’re laying out a plan to make Ontario best for job creation, to balance our books, and have high quality public services, so if an election comes, you may not agree with all of our ideas, might not like all of our policies, but at least you can respect you know where the PC party stands.”

Both opposition parties have been fuming that McGuinty shut down the legislature and all its committees just hours before public hearings were to start into the Liberal government’s decisions to cancel gas plants in Oakville and Mississauga at a cost to taxpayers of at least $230 million.

However, other than vague promises to give people more of a say in locating energy projects, the seven men and women running to replace McGuinty have said little about the cancelled plants, which the Tories and NDP say could cost over $1 billion.

The would-be premiers face two critical dates in the coming weeks: about 1,700 delegates who can vote directly for the new leader will be selected at riding association meetings across Ontario the weekend of Jan. 12-13, and the leadership convention itself Jan. 25-27 at Maple Leaf Gardens.

As the Liberal leadership candidates ponder their future in the premier’s office, they might be a little concerned by an online survey by Angus Reid Nov. 25-Dec. 3 that found McGuinty was the least popular premier in the country with a 23 per cent approval rating. That compared to 67 per cent for Saskatchewan’s Brad Wall.

© The Canadian Press, 2012

Curtain rises in 2013 on final act in soap opera over new arena for Oilers

By Dean Bennett, The Canadian Press - Friday, December 28, 2012 at 8:14 AM - 0 Comments

EDMONTON – It started out as a sports arena but has become Edmonton’s longest running soap opera.

A cost-shared deal between the hockey-mad city and the Edmonton Oilers to build a palatial downtown rink for the NHL team went from deal to no-deal to possible deal in 2012, with all sides now agreeing a final resolution — one way or the other — must come early in 2013.

It has been a series of setbacks and cliff-hangers enough to turn gung-ho glass-half-full Edmonton Mayor Stephen Mandel into a head-shaking fatalist.

“This is the last kick at the cat, more or less,” said Mandel after the city and Oilers owner Daryl Katz agreed Dec. 12 to resume one last round of talks, with the help of a mediator.

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Income taxes going up for the very rich in Ontario and Quebec

By The Canadian Press - Friday, December 28, 2012 at 6:47 AM - 0 Comments

OTTAWA – Canadians will have a little more room to contribute to their Tax Free Savings Accounts as the calendar flips over, but they’ll have to wait until the federal budget to see if there will be any more new savings on their taxes.

“Typically when there are new deductions, they announce them in the budget and you get them in that year,” said Jason Safar, a tax partner at PwC.

“If it is good news they want to get it out and if it is bad news and you announce it, you might as well implement it because people are angry about it anyway.”

And with the federal and provincial governments in deficit slaying mode, Safar said don’t get your hopes up for big moves come budget day.

“I haven’t heard any rumblings of any significant changes,” he said.

For the very wealthy in Ontario though, the new year brings bad news from the tax man — the top rate for the biggest earners in the province will creep a little higher for those earning more than $500,000.

Jeff Paisley, a senior manager at Deloitte, said those earning more than $500,000 a year saw the top combined federal-provincial marginal rate increase to 47.97 per cent from 46.41 this year.

The rate goes up again on Jan. 1, 2013 to 49.53 per cent, he said.

“So, that’s a bit of an increase,” Paisely said. “Does the average Canadian get hit by this? I wouldn’t say so.”

And in Quebec, the marginal tax rate will also edge up, though it kicks in at just $100,000.

“The highest marginal rate in Quebec for 2012 was 48.22 per cent and now the highest marginal rate in Quebec as of Jan. 1 is going to increase to 49.97 per cent,” Paisely said.

The TFSA account contribution limit is going up from $5,000 a year ago to $5,500 for 2013.

Canadians will also see certain income tax and benefit amounts increase two per cent for inflation.

The federal tax bracket thresholds will all increase by two per cent, with the top bracket of 29 per cent not kicking in until taxable income of $135,054 for 2013, up from $132,406 for 2012.

Amounts for several non-refundable tax credits also increase, including the basic personal amount which will stand at $11,038, up from $10,822.

In Ontario, seniors and those who live with them will also be able to take full advantage of the Healthy Homes Renovation Tax Credit that allows people to claim up to $10,000 worth of eligible home improvements that was announced late in 2012.

“Unless someone had a renovation that they were planning to do, they weren’t going to squeeze that in,” Safar said of the measure which could save Ontarians up to $1,500.

Harper’s seven-year itch looks muddle-of-the-road, non-ideological

By Bruce Cheadle, The Canadian Press - Thursday, December 27, 2012 at 11:48 AM - 0 Comments

OTTAWA – Stephen Harper, we hardly know you.

Almost seven years after Harper led his Conservatives to office and ended more than a decade of uninterrupted Liberal power, the prime minister remains a polarizing figure who inspires a bewildering array of reactions.

Steely ideologue, pragmatic centrist, unprincipled partisan: Harper’s political management has inspired all these descriptions — sometimes on the same file or issue.

With political 2012 now in the books, Harper has finally completed his first full, unfettered year with a majority mandate. Are Canadians any wiser about the man and his Conservative party that are leading the country?

“If success is measured by getting your agenda accomplished, I think for the most part they have. They’re making strides,” says Alex Marland, a political scientist at Memorial University in St. John’s, N.L., who specializes in political messaging.

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Inquest into cell death of Ashley Smith finally slated to start in early 2013

By Colin Perkel, The Canadian Press - Thursday, December 27, 2012 at 7:04 AM - 0 Comments

TORONTO – More than five years after a deeply disturbed teenager suffocated in her segregation cell, an inquest into her death that has already produced shocking surveillance videos is at last set to begin hearing evidence just weeks into the new year.

It’s been a long time coming for Coralee Smith, the mother Ashley Smith.

“Coralee Smith was told that when her daughter went into the federal system, she would find supports and help that wasn’t available anywhere else,” said lawyer Julian Falconer.

“The family feels utterly betrayed by Correctional Services.”

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