Air Canada exec reportedly on board as Air France CEO would face labour headwinds

Air Canada exec reportedly on board as Air France CEO would face labour headwinds

Two French airline unions blasted Air France-KLM this week after reports the Franco-Dutch carrier will name an Air Canada executive as its new CEO.

Several French news outlets have reported Air Canada chief operating officer Ben Smith is poised to be placed in the pilot’s seat at a board meeting Thursday.

Smith, who has acted as chief negotiator during labour talks for Air Canada’s low-cost Rouge unit, would replace former Air France-KLM CEO Jean-Marc Janaillac, who quit more than three months ago when staff turned down his offer of a pay deal aimed at halting a wave of strikes.

Philippe Evain, head of Air France’s main pilot union, accused the board in a tweet Tuesday of poor decision-making and handing over the keys to the company to a North American executive.

A union representing Air France ground staff questioned Smith’s potential pay package, which the French newspaper Liberation reported will hit 3.3 million euros a year.

The criticism comes amidst growing labour turmoil on the tarmac in Europe, as pilots at Air France, Brussels Airlines and Ryanair have all staged work stoppages in recent months.

A spokesperson for Air France-KLM declined to confirm reports of a new CEO and said the appointment process was ongoing.

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Alberta Securities Commission hearing against short-seller Cohodes wraps up

Alberta Securities Commission hearing against short-seller Cohodes wraps up

An application for an order preventing American short seller Marc Cohodes from trading shares in or providing misleading information about Badger Daylighting Ltd. is “deliberately rushed” and unnecessary, his lawyer said at a hearing Wednesday.

Furthermore, the remedies being sought by Alberta Securities Commission staff are significant and broad and based on an incomplete evidence record, Andrew Wilson said at the ASC hearing into the recent actions of the trader who makes a profit when a company’s share price falls.

Short selling serves important role, says lawyer

“Being a short seller is not unlawful. It actually does serve an important part in our capital markets,” said Wilson, a Calgary lawyer who represented Cohodes while he and two other lawyers listened in by telephone.

“The public interest is not just Badger Daylighting. It’s much broader than that. It’s people who also want to say positive or negative things about companies and it’s understanding what role regulators are going to play in the market.”

The hearing ended just before noon and the two-member ASC panel was expected to make a ruling after 4 p.m. MT.

Short sellers sell a security they don’t own in hopes its price will decline, enabling it to be bought back at a lower price to make a profit.

Last week, staff for the regulator announced they would seek the order against Cohodes, an investor who has taken short positions in many companies including Home Capital Group of Toronto, because of statements he made, including a June 27th Twitter post containing a picture of a Badger truck as support for his allegation of its illegal dumping of toxic substances.

It said Cohodes has made numerous negative public claims over a period of more than a year, coinciding with the acquisition of his short position, accusing him of trying to artificially manipulate the price of Badger securities.

Wilson said there’s no evidence that any of Cohodes’ social media statements caused Badger stock to fall in the short term and, furthermore, the stock has gained about 20 per cent since Cohodes began talking about it on Twitter in May 2017.

ASC counsel Don Young countered that the interim cease trade order was needed to prevent Cohodes from continuing his “protracted campaign” to harm Badger’s reputation for his eventual gain and actual share price erosion wasn’t important to the case.

He said the order would give the regulator time needed to complete an investigation into the short seller’s activities, pointing out that accusing Badger of illegal dumping was serious given that proper disposal of material is a vital part of the Calgary-based hydrovac excavating company’s business.

Wilson said Badger has the option of pursuing a civil case against Cohodes but hasn’t, suggesting it’s because his remarks are protected by free speech law in both Canada and the United States.

Badger CEO Paul Vanderberg, who attended the hearing, said he would not comment on the outcome or the possibility of a civil suit against Cohodes.

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Uber narrows quarterly loss as company polishes tarnished image

Uber narrows quarterly loss as company polishes tarnished image

Uber is still struggling to make money while the ride-hailing service’s CEO deals with the headaches left behind by his predecessor.

The second-quarter results released Wednesday show Uber’s pioneering service continues to reel in more passengers and revenue, despite a variety of debacles that have tarnished its reputation and spurred some disillusioned riders to defect to its main U.S. rival, Lyft.

That has further complicated one of Uber’s biggest challenges — proving it can mature into a profitable business nearly a decade into its existence.

That’s something that CEO Dara Khosrowshahi has predicted Uber will eventually do, but for now it makes more sense to aggressively spend money on marketing, promotions and expanding into other areas of transportation, such as its recent investment in scooter-rental startup Lime.

Uber fared slightly better from April through June than it did a year ago. The San Francisco company lost $891 million in the quarter, narrowing from a loss of $1.06 billion at the same time last year.

Gross bookings on the ride-hailing service brought in $12 billion, up 41 per cent from a year ago. Excluding operations that have been sold during the past year, gross bookings surged 49 per cent. Those numbers are encouraging because it shows Uber is still attracting riders in droves, despite tougher competition from Lyft.

After paying its drivers, covering promotions, and various other items, Uber recorded net revenue of $2.8 billion, a 63 per cent jump from a year ago. The increase stemmed largely from fewer incentives offered to drivers and fewer discounts given to passengers.

Uber has consistently lost money since its inception, but CEO Dara Khosrowshahi has predicted the company will eventually turn a profit. (Adriano Machado/Reuters)

“We had another great quarter, continuing to grow at an impressive rate for a business of our scale,” Khosrowshahi said in a statement. “Going forward, we’re deliberately investing in the future of our platform.”

The second-quarter loss marked a return to form for Uber after it posted a profit of nearly $2.5 billion during the first three months of the year. That anomaly was generated by a windfall from Uber’s sale of operations in Southeast Asia and Russia.

Uber has consistently lost money since its inception, including a $4.5 billion setback last year.

The losses stem from Uber’s efforts to introduce and then hook consumers on the concept of being able to summon a ride on a smartphone app and then have drivers working as independent contractors pick them up within a few minutes. As an enticement, Uber historically has offered prices below the cost of providing its service, after paying for the drivers and other expenses.

Uber’s early investors are betting heavily that the company eventually will be able to come up with a money-making formula. They have valued Uber at $62 billion in privately negotiated investments, an assessment that will be put to the test if the company follows through on its current plan to sell its stock in an initial public offering next year.

To prepare for the IPO, Uber has been trying to prune its losses and minimize the damages from revelations about a corporate culture that cultivated or allowed a pattern of sexual harassment , a yearlong coverup of a major computer break-in and the use of duplicitous software to dupe government regulators.

Uber’s efforts to develop self-driving cars also have been bogged down during the past year amid allegations that it stole technology from a Google spinoff and a fatal collision involving one of its robotic cars that ran over a pedestrian in Arizona. And on Tuesday, New York City’s mayor signed a bill that would impose a yearlong cap on new licenses for ride-hailing apps and also allow the city to set a minimum wage for drivers. New York is the largest American market for Uber..

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Constellation Brands invests $5B in Canopy Growth

Constellation Brands invests $5B in Canopy Growth

Constellation Brands, a massive alcohol beverage company, is investing $5 billion into Smiths Falls, Ont.-based cannabis company Canopy Growth.

According to a press release, Constellation Brands is increasing its ownership of Canopy Growth, the world’s largest publicly traded cannabis company, to 38 per cent by acquiring 104.5 million shares.

“Through this investment, we are selecting Canopy Growth as our exclusive global cannabis partner,” said Rob Sands, CEO of Constellation Brands, in the press release. “Over the past year, we’ve come to better understand the cannabis market, the tremendous growth opportunity it presents, and Canopy’s market-leading capabilities in this space.”

Sands added that his company will be helping Canopy Growth extend its global reach in the medical and recreational cannabis markets. 

Constellation Brands is based in Victor, New York, and is a leading producer of beer, wine and sprits around the world. It owns well-known beverages such as Corona beer and Kim Crawford wines.

Eyeing international, local growth

Canopy Growth is looking at the international market, but also looking at the retail cannabis market at home. 

The Ontario government recently announced a big change in the province’s plans for pot sales — allowing private retailers to sell cannabis in stores, and taking on online sales only. 

Private retail stores are something Canopy has been lobbying for, with the goal of opening a store at its factory in Smiths Falls. 

Canopy Growth CEO Bruce Linton says he’ll be lobbying for a storefront at the company’s Smiths Falls, Ont., headquarters. 0:28While it hasn’t been selected as a retailer of cannabis yet, the company’s CEO Bruce Linton is more than hopeful. He said Canopy has already received licences to operate stores in Newfoundland, Manitoba and Saskatchewan and is close to sealing a deal with Alberta. 

“We’ve been selected in four other provinces,” Linton told CBC News. “I think hope is a good strategy, but we’ve been competent as well.”

The company recently bought up a retail outlet called Hiku, which was set up as coffee shops around Ontario that could be turned into cannabis stores if the province went in the direction of private sales. Canopy will be applying for the maximum number of retail locations a company can have, Linton added.

“It was really a bet that having good retail locations would be a good play in the province,” he said. 

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Metro faces supplier pressure, expects higher grocery prices in the future

Metro faces supplier pressure, expects higher grocery prices in the future

Canadian grocery giant Metro Inc. is already facing pressure from suppliers to accept higher prices in light of a recent tariff war with the United States and consumers should expect slightly higher food bills in the future, its CEO said Wednesday.

“We’re starting to get demands from some suppliers who are, whose products will be, affected by the new tariffs,” Eric La Fleche said during a conference call with analysts Wednesday after the company released its third-quarter earnings report.

The Canadian government implemented tariffs on Canada Day on a number of American-made goods, including yogurt, orange juice and maple syrup, in retaliation for U.S.-government imposed tariffs on Canadian steel and aluminum products, which are also putting pressure on some Canadian food manufacturers.

The company is currently reviewing suppliers demands and negotiating prices, La Fleche said.

“If it’s legitimate and if it’s industry-wide, sometimes we won’t have a choice and we will have to accept,” he said, adding the company has already agreed to some minor cost increases.

Metro will continue to ensure its retail prices are competitive, he said, but expects the company, as well as the market as a whole, will have to accept some cost increases.

Ontario’s new minimum wage, which rose to $14 at the start of the year, is adding extra pressure on prices.

“We expect that the cumulative effect of all these cost pressures should start to be reflected at retail,” La Fleche said. “We’re just starting to see some minor price increases — nothing major.”

Empire Co. Ltd., which operates subsidiary Sobeys Inc., predicted a similar outlook in late June, when the company reported its latest quarterly earnings. Sobeys CEO Michael Medline said at the time that the pending tariffs could result in higher grocery store prices, though he said the company would try to resist accepting suppliers’ cost increases.

A number of companies whose products use cans, including the Campbell Company of Canada and Molson Coors Brewing Company, have said that the 10 per cent tariffs the U.S. has slapped on aluminum imports have forced them to consider price increases.

La Fleche’s comments came as Metro reported it earned lower-than-expected earnings in its latest quarter.

The company earned $167.5 million, or 69 cents per share, in the third quarter ended July 7, as it completed its acquisition of the Jean Coutu Group on May 11, falling from compared with a profit of $183 million or 78 cents per diluted share a year ago.

On an adjusted basis, which excluded acquisition-related costs, Metro earned 75 cents per diluted share for the quarter, up from 70 cents per diluted share in the same period last year. However, the results fell short of analysts’ expectations for adjusted earnings of 78 cents per share, according to Thomson Reuters Eikon.

Revenue for what was the company’s third quarter of its financial year totalled $4.64 billion, up from $4.07 billion a year ago, boosted by the Jean Coutu acquisition.

Excluding Jean Coutu, Metro says sales would have been up 2.4 per cent for the quarter.

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U.S. SEC subpoenas Tesla over Musk’s tweets: report

U.S. SEC subpoenas Tesla over Musk's tweets: report

The U.S. Securities and Exchange Commission has sent subpoenas to Tesla Inc regarding Chief Executive Elon Musk’s plans to take the company private and his statement that funding was “secured,” Fox Business Network reported on Wednesday, citing sources.

Subpoenas typically indicate the SEC has opened a formal investigation into a matter. Tesla and the SEC declined to comment.

Musk stunned investors and sent Tesla’s shares soaring 11 per cent when he tweeted early last week that he was considering taking Tesla private at $420 US per share and that he had secured funding for the potential deal.

The electric carmaker’s shares were last down 1.9 per cent at $341 US on Wednesday. They have erased all their gains following Musk’s tweet last week.

Musk provided no details of his funding until Monday, when he said in a blog on Tesla’s website that he was in discussions with Saudi Arabia’s sovereign wealth fund and other potential backers but that financing was not yet nailed down.

The CEO’s tweet may have violated U.S. securities law if he misled investors. On Monday, lawyers told Reuters Musk’s statement indicated he had good reason to believe he had funding but seemed to have overstated its status by saying it was secured.

The SEC has opened an inquiry into Musk’s tweets, according to one person with direct knowledge of the matter. Reuters was not immediately able to ascertain if this had escalated into a full-blown investigation on Wednesday.

This source said Tesla’s independent board members had hired law firm Paul, Weiss, Rifkind, Wharton & Garrison to help handle the SEC inquiry and other fiduciary duties with respect to a potential deal.

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E-commerce giant Shopify bans sale of some firearms and accessories

E-commerce giant Shopify bans sale of some firearms and accessories

Shopify is banning the sale of some firearms and their related parts through its platform.

A policy update that the Ottawa-based e-commerce firm quietly posted this week shows Shopify merchants can no longer use the platform to sell automatic firearms that have not been rendered inoperable and semi-automatic firearms that have the capacity to accept a detachable magazine.

Also off-limits are a handful of gun parts and accessories including grenade and rocket launchers, magazines capable of accepting more than 10 rounds and flash and sound suppressors.

Shopify did not say what prompted the ban in a statement to The Canadian Press, but says it may refine its policies further as the company grows.

However, in a blog post about free speech and policy changes, Shopify founder Tobi Lutke says he finds the legislative process no match for the realities of the internet and as a result, the company has had to make its own decisions on a range of issues.

He says the company has had to accept that neutrality is not possible because it wants to allow all kinds of products to be sold on the platform, including ones it disagrees with, but does not want to make space for items that can harm.

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Average Canadian house sold for $481,500 last month, up 1% in past year

Average Canadian house sold for $481,500 last month, up 1% in past year

The average price of a Canadian home was $481,500 last month, a rise of one per cent in the past year.

July marked the first time this year that average house prices eked out an annual increase, the Canadian Real Estate Association said Wednesday, as the impact of tougher mortgage rules implemented earlier this year is starting to wane.

“This year’s new stress test on mortgage applicants continues to weigh on home sales, but its effect may be starting to fade slightly in Toronto and nearby markets,” said Barb Sukkau, the realtor group’s president. “The degree to which the stress test continues to sideline home buyers varies depending on location, housing type and price range.”

After years of annual increases that frequently touched the double digits, Canadian house prices have cooled considerably in recent months, especially after the implementation of the new mortgage stress test rules that hold borrowers to higher income standards, which has resulted in less borrowing or taking some people out of the market entirely.

July also saw the total number of homes sold during the month decline compared to last year, by 1.3 per cent. But the sales figure has inched higher on a monthly basis for three months in a row, after a big plunge at the start of the year.

For economist Doug Porter with the Bank of Montreal, the housing market numbers released Wednesday paint a picture of what economists call a “Goldilocks” market.

“The main takeaway is that the housing market has ceased to be a major source of concern for policymakers — neither too hot, nor too cold, at least for now,” Porter said.

Average prices inched up on an annual basis for the first time since the start of the year.

But CREA says the average isn’t the most accurate way of assessing house prices because it’s skewed by activity in big cities like Toronto and Vancouver, and by certain types of housing. So it calculates another number — called the Multiple Listings Service Housing Price Index (MLS HPI) — that is says is a better gauge of the overall market because it strips out all the volatility.

By that metric, house prices in Canada have increased slightly in the past year, by 2.1 per cent up to July.

Markets in B.C. continue to post strong gains: 6.7 per cent in Greater Vancouver, 13.8 per cent in the Fraser Valley and 8.2 per cent in Victoria.

Moving east from B.C., the numbers soften, with annual decreases of 1.7 per cent in Calgary, 1.3 per cent in Edmonton, 4.8 per cent in Regina and 2.1 per cent in Saskatoon.

Prices in the Greater Toronto Area have declined by 0.6 per cent in the past year, but have risen by 7.2 per cent in Ottawa and 5.7 per cent in Montreal.

“July’s was a good month for housing markets, as sales increased for the third straight month alongside another rise in prices,” Toronto-Dominion Bank economist Rishi Sondhi said after the numbers were released. “This lends further credence to our view that markets have shaken off the bout of policy-induced weakness in the earlier part of the year.”

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New Zealand bans most foreigners from buying homes amid rise in prices

New Zealand bans most foreigners from buying homes amid rise in prices

New Zealand has banned most foreigners from buying homes as it tries to tackle runaway housing prices.

The housing market had been open to investors worldwide, but the government on Wednesday passed legislation that allows only New Zealand residents to purchase homes.

In recent years, there have been many anecdotal stories of wealthy foreigners from Silicon Valley and beyond buying ranches in picturesque rural New Zealand as a “bolt hole” or escape option from a turbulent world.

We’re here today to take another step toward restoring the great New Zealand dream of home ownership.– David Parker, associate finance minister 

There have also been stories of wealthy Chinese buyers outbidding New Zealanders on suburban homes in the main city of Auckland.

Statistics indicate about three per cent of New Zealand homes are being sold to foreigners, but the amount rises to five per cent in the scenic Queenstown region and 22 per cent in central Auckland.

Last month, the directors of the International Monetary Fund executive board said they encouraged New Zealand to reconsider the ban, which they thought would be unlikely to improve housing affordability.

But the government says there is no doubt that foreigners are driving up prices, and the only question that remains is by how much. The new law fulfils a campaign pledge by the liberal-led government that came to power last year.

Exceptions for Australians, Singaporeans

There are some exceptions. Foreigners with New Zealand residency status will still be able to buy homes, as will people from Australia and Singapore, thanks to existing free-trade agreements.

Foreigners who already own homes in New Zealand won’t be affected, and overseas buyers will still be able to make limited investments in large apartment blocks and hotels.

“We’re here today to take another step toward restoring the great New Zealand dream of home ownership,” said Associate Finance Minister David Parker.

He said it was the birthright of New Zealanders to buy homes at a fair price.

“This government believes that New Zealanders should not be outbid by wealthier foreign buyers,” Parker said. “Whether it’s a beautiful lakeside or oceanfront estate, or a modest suburban house, this law ensures that the market for our homes is set in New Zealand, not on the international market.”

Opposition lawmaker Judith Collins said the bill was unnecessary.

“We oppose the bill because we don’t believe that it actually fixes any problem. It is, in fact, nothing more than an attempt to justify some of the policies of the incoming government.”

Skyrocketing home prices in Auckland have been of particular concern to New Zealanders, although that market has cooled over the past year. Still, prices there remain among the most expensive in the world when compared with people’s incomes.

Figures released Wednesday by the Real Estate Institute of New Zealand indicate the median house price in Auckland is 835,000 in New Zealand dollars ($716,000 Cdn) while the median price across the country is $550,000 NZ ($473,000 Cdn).

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Hydro One gets new board of directors after mass resignation

Hydro One gets new board of directors after mass resignation

A new board of directors has been appointed to Hydro One Ltd. just over a month after its chief executive retired and the entire board resigned en masse.

Ten new board members were named as replacements for Hydro One’s previous 14-member board, which resigned last month.

The power utility says former CIBC executive Tom Woods will serve as the interim board chair until the new directors can convene to permanently fill the position.

The new board comes in a time of sweeping change for Hydro One.

Its chief executive Mayo Schmidt suddenly retired last month after political intervention.

He had been labelled “the six-million-dollar man” on the campaign trail by newly elected Premier Doug Ford for his hefty compensation.

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