Our weekend business panel discusses the tentative trade deal between the U.S. and China and the announcement that BlackRock, the world’s largest asset manager, will make climate change central to its investment decisions.
A new report found that the reality of retirement in Canada isn’t quite what people expect it to be.
The online poll of 1,800 people conducted by Ipsos on behalf of RBC revealed notable misconceptions surrounding retirement. They include the timing of that last day on the job and how Canadians actually spend their days after clocking out.
Respondents were Canadians 55 years and older, some in their pre-retirement years and others who have already retired. An important caveat is that all said they have retirement assets of $100,000 or more.
“Our expectations for retirement aren’t always met,” said Rick Lowes, vice president of retirement strategy of RBC.
Here are the three common misconceptions highlighted in the report.
So much for counting down the days to retirement months in advance. Among the survey respondents, 55 per cent expected to know their retirement date a year or more in advance. But just 39 per cent had that much notice.
In fact, 16 per cent had no advance notice of their retirement. The results varied from province to province: Respondents in Atlantic Canada were the most likely to say they had no notice before their retirement day arrived.
Marissa Lennox, chief policy officer for CARP, the Canadian Association of Retired Persons, said health is the No. 1 reason people end up retiring earlier than expected.
“People in bad health often overestimate how long they can work,” she said. “The second reason is familial issues. Someone may choose to leave the workforce to care for a parent, spouse or grandchild.”
Mandatory retirement ages are no longer legal, but things like lay-offs, restructuring, and redundancy brought about by technology also push people into retirement with little notice, Lennox said.
Retiring to sunnier climes is a common Canadian dream. Close to a third of poll respondents said they expect to be “snowbirds” who spend the winter months in warmer locations such as Florida, Arizona or Mexico.
But of those respondents who had actually retired, just 18 per cent actually fly south for winter. That stat doesn’t surprise Lennox.
“The fact is while it’s nice to fantasize about retiring in a little beach town in paradise somewhere, or spending the better half of our lives travelling the world, it’s just not realistic for most,” she said.
The survey found that those from Alberta were the most likely to be snowbirds at 32 per cent, followed by retirees from Saskatchewan and Manitoba at 23 per cent.
Many Canadians plan to have some sort of second act in retirement, working either full or part-time once their main career has come to an end. In fact, they may be counting on it to pay the bills, said Lowes.
Among the poll’s respondents who hadn’t yet retired, 50 per cent said they expected to work at least part-time but just 11 per cent of retirees polled said they’d found work.
“If we haven’t had early notice of retirement, and we haven’t got plans in place, and we may be relying on work to help us achieve our goals, that may not be as available as we’d hoped,” he said. Retirees may discover that it’s harder to get a job than expected, or at least the kind they’d hoped for that will accommodate a semi-retired lifestyle.
Edmonton retiree Ernie Zelinski, author of How to Retire Happy Wild and Free, said people may discover that the type of work they can get in retirement isn’t worth it.
“If you’ve been making a job at $120,000 a year and then you lose your job at 55 and then you have to work a job at $15 an hour, is that going to be sufficient? Those factors have to come into effect too. Would you enjoy being a Walmart greeter or anything else that may be available to you?”
Lennox said she questioned the report’s finding about the small portion of working retirees, given the number of CARP members who say they count on income from part-time work.
However, she said one explanation could be that since so many are retiring later in life, their ability and desire to work once they’ve finally hung up their hats isn’t what they expected.
“The trend is that people are retiring in their 70s and 80s, so the likelihood of going back to work after that point is much lower,” Lennox said. “We’re thinking of the traditional retirement age of 55 or even 65, and that’s just not what’s happening today.”
The findings are part of a poll that was conducted between April 2 and April 8, 2019. For this report, the data is drawn from a sample of 1,800 people age 50 or more who have retirement assets of $100,000 or more. The results are considered accurate to within +/- 2.6 percentage points, 19 times out of 20.
Even though a new U.S.-China trade agreement does not eliminate heavy Chinese tariffs, the deal will result in a loss of Canadian seafood sales to China, according to international trade researcher Mohammad Rahaman of Saint Mary’s University in Halifax.
Canadian live lobster exports to China, mostly from Nova Scotia, soared after China slapped retaliatory tariffs of 35 per cent on U.S. lobsters.
U.S. lobster exports tanked while Canadian sales jumped by 123 per cent, worth a record $384 million, during the 10 months of 2019.
The new trade deal does not lower those tariffs. But China has pledged to buy $32 billion worth of American agricultural products over the next two years, including lobster and other seafood products.
Rahaman says the Chinese government has the clout to compel its companies to switch back to lobster from the United States.
He calls it “pseudo-capitalism.”
“They have private corporations who are heavily indebted to state-owned banks and, through that channel, China can actually direct trade and commerce,” he said.
“I understand there is a lot of skepticism on whether they will actually follow through on the promises they have made. But if they really want to do it they can deliver on this promise.”
Rahaman added: “We’re going to pay a price in terms of our seafood market access to the Chinese market.”
Keith Colwell, Nova Scotia’s minister of fisheries and aquaculture, said the province has nothing to fear. “Basically, it won’t make any difference for us.”
“We can sell everything we can catch. We sell top-quality products. We send it on time and their customers are very happy with it.”
Global Affairs Canada said it continues to monitor the China-U.S. deal.
The amount of seafood China will buy from American fishermen, even at inflated prices, has not been spelled out.
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Canopy Growth Corp. is delaying the launch of its cannabis-infused drinks.
The company says work to scale up to commercial production is not complete and it is delaying the launch date while it completes the final steps.
Canopy submitted its final documentation for its beverage facility to Health Canada last June and received its license in late November.
The company had expected to have its beverage products on store shelves in early January. It did not say when it now plans to launch its beverage products.
Canopy says it does not believe the delay will have a material impact on its revenue for its 2020 financial year.
It says it plans to provide an update when it releases its third-quarter results.
Concerns are mounting over added powers Ottawa has granted U.S. customs officers to strip-search, question and detain U.S.-bound travellers — on Canadian soil.
The changes are part of Canada’s new preclearance act, which the federal government says will enhance border security and make travel to the U.S. easier.
But Pantea Jafari, an Iranian-Canadian immigration lawyer, fears it could make travel more difficult for her.
That’s because the act gives U.S. customs officers in Canada broader interrogation powers — at a time when the U.S. has toughened its stance on immigration and has increasingly hostile relations with Iran.
“I will not allow a border officer to have access to me and have unfettered right to question me to no end,” said Jafari, who’s based in Toronto and serves many Iranian clients.
Since the preclearance act took effect in August, she has stopped travelling to the U.S. and says the country’s current standoff with Iran has only strengthened her resolve.
“My concerns of going to the U.S. have now 100 times increased.”
Canada’s new preclearance act overrides a previous agreement with the United States that allowed travellers to clear U.S. customs in preclearance zones at Canadian airports, before flying across the border. Eight major Canadian airports already have preclearance areas — and the new act paves the way for more zones involving all modes of transport.
Proponents say preclearance offers many benefits, including allowing Canadians to clear U.S. customs in their own country.
“They land in the U.S. as a domestic passenger, so you don’t have to go through long lineups,” said Gerry Bruno, co-chair of the Beyond Preclearance Coalition, an industry group supporting efficient Canada-U.S. border travel.
While they don’t dispute the benefits of preclearance, some immigration lawyers claim the new act could jeopardize Canadian rights.
The big concern is that American preclearance officers could now further interrogate Canadians who withdraw their application to enter the U.S., perhaps because they feel uncomfortable during a customs inspection.
Previously, law-abiding travellers could simply leave and return home, because they were still on Canadian soil.
Now they could be detained — even handed over to Canadian authorities to face charges — for refusing to answer questions about why they’re withdrawing.
“You say, ‘I think you’re racially profiling me and I’m offended. I don’t want to go to your country, I want to leave,'” said Calgary-based immigration lawyer Michael Greene. “[U.S. officers are] entitled to examine those reasons and if they think you’re not being truthful, they’re entitled to detain you.”
Jafari said the new rules are particularly concerning for racialized populations, such as those of Middle Eastern descent, who could be targeted for questioning.
“We’re the ones that are deemed the threat, right; the domestic threat of some sort that they need to data mine.”
Public Safety Canada said the withdrawal rules were revamped to prevent bad actors from probing preclearance zones in search of a weak entry point.
“Allowing a traveller to withdraw without any type of examination creates challenges in terms of border security,” spokesperson Tim Warmington said in an email.
He added that U.S. preclearance officers questioning travellers who opt to withdraw can’t “unreasonably delay” them.
But what constitutes an “unreasonable” delay could be open to interpretation, argues Greene.
“When you look at it from the U.S. perspective of wanting to protect the security of the country, that could result in some very extensive questioning,” he said.
Bruno said that law-abiding travellers shouldn’t encounter problems at the preclearance zones, and maintains that it beats clearing customs in the U.S., where you “can’t withdraw.”
“You’re there. You’re subject to U.S. laws,” he said.
U.S. preclearance officers in Canada must follow Canadian laws, including the charter and Human Rights Act. In 2017, Prime Minister Justin Trudeau made this point when defending the new act — before it had become law.
“There is extra protection,” he told The Canadian Press.
“A Canadian who believes a U.S. customs official has broken Canadian law has little recourse in the courts,” states the Office of the Privacy Commissioner’s website.
Immigration lawyers are also concerned that under the new act, U.S. preclearance officers can now strip-search Canadian travellers.
Public Safety spokesperson Warmington said that U.S. officers must have reasonable grounds to do the search and that it will only happen in rare circumstances “where Canadian [border] officers are unable to respond or decline.”
Immigration lawyer Len Saunders said his concerns with the act are compounded by the fact that some customs officers appear to be getting tougher at U.S. land crossings along the country’s northern border.
In 2019, U.S. Customs and Border Patrol doled out almost double the number of five-year bans to travellers crossing from Canada, compared to 2018.
“When the Americans are treating Canadians like this on American soil, why would you allow them so much autonomy on Canadian soil?” said Saunders, whose office sits close to the Canadian border in Blaine, Wash.
“I’m appalled by what the Canadian government has agreed to.”
Travellers who feel mistreated can submit feedback to a “preclearance consultative group” set up to provide oversight, said Warmington.
He also pointed out that Canadian customs officers will have equal powers in U.S. preclearance zones.
Canada currently has no preclearance zones in the U.S., but Warmington said the government is “exploring the potential.”
Lino Saputo turned his family’s humble cheesemaking business into a multibillion-dollar global dairy empire and became one of the 10 richest people in Canada in the process.
But while amassing his $6.5-billion fortune, Saputo has also been dogged by allegations of having ties to powerful Mafia figures in both Canada and the United States.
The 82-year-old businessman has repeatedly denied those allegations, most recently in a memoir published last year. He devotes an entire chapter to disputing the claims.
“We respected the law, kept our distance from criminal organizations, and avoided crossing the wrong people,” Saputo writes in Entrepreneur: Living our dreams.
But between 1964 and 1979, Saputo maintained a clandestine relationship with one of the most powerful gangsters in the U.S., according to police evidence uncovered by Enquête, Radio-Canada’s investigative program.
The evidence, gathered by federal and state law enforcement officials in the 1970s, details personal and financial dealings between Saputo and Joseph Bonanno, considered one of the founding members of the American Mafia.
In 1980, a retired New York judge reviewed the police evidence as part of an administrative hearing.
The former judge determined Saputo was so closely linked to Bonanno that allowing him to do business in New York was not in the public interest.
Before Saputo Inc. became the dairy industry giant it is today, employing 17,000 people around the world, the family operated a cheesemaking business from a modest building in Montreal’s Saint-Michel neighbourhood.
In the early 1960s, the building was also home to the Saputo family, including Lino, then in his mid-20s, and his father Giuseppe.
It was here, in May 1964, that the Saputos had lunch with Bonanno.
At the time, Bonanno was in charge of one of the so-called Five Families, the crime syndicates that composed the New York Mafia.
Bonanno says in his autobiography, A Man of Honor, that he only met with the Saputos at the insistence of a mutual friend.
However, in an immigration document that he filed during his stay in Montreal, Bonanno claimed to have known the Saputos since the early 1960s. He calls them his “friends.”
The May 1964 meeting resulted in a business proposal. Giuseppe Saputo drew up a letter offering to sell Bonanno a 20 per cent stake in three companies then owned by his family, in exchange for $8,000 (around $66,000 when adjusted for inflation).
In his memoir, Lino Saputo says his family had no idea who Bonanno was when they agreed to the deal.
When Bonanno was later arrested by Montreal police for an immigration violation, Saputo saw him described as “the king of the Mafia” in a newspaper headline.
According to Saputo’s account, his father “rushed” to cancel the deal.
“We thought that was the end of it, as the agreement was never finalized,” Saputo wrote.
But suspicions that he had ties to the Mafia continued to follow Saputo throughout the 1970s. They were unfounded, he said, and hurt his business.
“I felt victimized and cut off from Quebec society by the false allegations based solely on our Italian origins,” he wrote.
In 1978, under the auspices of one of his companies, Lino Saputo applied for a licence to operate a cheese-manufacturing business in New York state.
State officials were reluctant to grant the application after they learned of the 1964 business deal between Saputo and Bonanno.
During the administrative hearings into his application, Saputo said under oath that the meeting in Montreal was the first and only time he had met Bonanno.
Saputo’s memoir notes simply that the “judge eventually rejected our request,” adding that a competitor and a Quebec agriculture official testified on his behalf.
The reason, though, was that the judge had concluded in 1980 that Saputo gave “false, misleading and deceitful statements” about his ties with Bonanno.
Radio-Canada accessed all of the evidence that U.S. law enforcement submitted to the administrative hearings into Saputo’s application.
Along with testimony from U.S. law enforcement officials, the 1,500 pages of evidence detailed how Saputo disguised interactions and financial dealings with Bonanno between 1964 and 1979.
During the hearings, Saputo was asked if he had seen Bonanno after May 1964. “No, sir,” Saputo replied.
He was then asked: “Were you in Tucson, Arizona, on February 1, 1970?”
Saputo answered: “Not that I remember, sir.”
But FBI informants had spotted Saputo and his wife, Mirella, visiting Bonanno at his home in Tucson on that day.
An FBI agent also told the New York hearings the Saputos were checked in under the name “Saparo” at a Tucson Holiday Inn between Jan. 30 and Feb. 1, 1970.
Though Bonanno had by this time “retired” as head of the New York crime syndicate that bore his family name, authorities believed he was still active in criminal activity in Arizona and California.
Investigators in the U.S. presented no other evidence that Saputo and Bonanno had met in person after 1970.
They did, however, present evidence indicating the pair remained in contact, at least until the end of the 1970s.
Beginning in the summer of 1975, Arizona state police placed Bonanno’s Tucson home under surveillance.
Twice a week, Bonanno (then in his 70s) would dutifully put his trash cans by the curb. An undercover police van would drive by the house discreetly soon after.
Officers inside the van took the contents from the bins and filled them again with fake garbage — all in less than 45 seconds. They even plied Bonanno’s Doberman with meat to prevent the dog from barking.
State and FBI investigators would then sift through Bonanno’s garbage.
Bonanno was a diligent note-taker, tearing them up and throwing them out when he was done.
Between 1975 and 1979, police were able to piece back together around 6,000 notes and other documents from Bonanno’s trash cans.
“We learned, by both studying him and watching him, that he was the most powerful Mafioso in the United States … and had specific influence, we learned, in Canada and throughout Latin America,” said Eugene Ehmann, a former state police investigator who played a leading role in the operation against Bonanno.
“Bonanno was still an actively known figure in New York … He was the godfather, plain and simple.”
Among the notes, investigators noticed references to “Lino.” Several notes, for instance, seemed to suggest that Bonanno had helped organize a trip to California for him.
“Lino is a person of mine with no charge (1) at the hotel (2) no charge at the restaurant,” reads the FBI translation of a note written in Italian.
In a recent interview with Radio-Canada, Ehmann (now retired) said that with help from the RCMP, his team determined “Lino” was Lino Saputo.
“They seemed to interact very smoothly with each other,” Ehmann said of Saputo and Bonanno. “They just had a relationship, and it was a longtime one.”
In 1979, authorities finally searched Bonanno’s house itself. A few days later, the mobster dumped 1,200 notes in the trash, seemingly unaware he was still under surveillance.
This latest dump included newspaper articles from Quebec that discussed Bonanno and the Mafia.
Police also found lawyers’ letters, financial statements and investment scenarios that linked Bonanno to Saputo and his businesses.
“[Bonanno] had obviously panicked and wanted to get rid of these documents which have — as we now have found — connected him more deeply in his relationships with Saputo Cheese,” Ehmann said.
The notes in Bonanno’s garbage often referred to liquido, an Italian word for cash.
In several notes, Bonanno wrote that he needed to discuss liquido with someone called Peppe Freddo.
Bonanno received multiple calls from Peppe Freddo during the 1970s at telephone booths in a Tucson hospital, which were being monitored by law enforcement officials.
Ehmann said an FBI agent was occasionally lying on a stretcher nearby, trying to understand what was being discussed.
With the help of the RCMP, Ehmann said, agents in the U.S. concluded that Peppe Freddo was a code name for Giuseppe Borsellino.
Borsellino had been a business partner of Saputo’s since the 1960s and was an early shareholder in his cheese businesses. He is also married to Saputo’s sister, Elina.
Aside from their telephone conversations in the 1970s, Borsellino also corresponded with Bonanno. In one 1975 letter found by police, Borsellino apologizes profusely for failing to call at an agreed-upon time.
In another, Bonanno tells Borsellino: “I would like, if possible, to hear the voice of your brother-in-law and speak with him.”
At the cheese-licensing hearings in New York, Ehmann and his colleagues presented evidence that Saputo colluded in funnelling $51,000 US to Bonanno (worth around $210,000 US today).
The money was withdrawn from an account belonging to a business owned by Borsellino’s brother and was meant to pay an outstanding bill to one of Saputo’s cheese companies.
But a disused money wrapper found in Bonanno’s trash, along with several recovered notes, was evidence the cash wound up instead at Bonanno’s home.
Law enforcement authorities presented their evidence about Saputo’s ties to Bonanno over the course of a 10-day administrative hearing in 1980.
A retired appeals court judge, Charles D. Breitel, was appointed to preside over the hearing. He recommended the state refuse Saputo’s application for a cheese-manufacturing licence.
In his recommendation, Breitel singled out the $51,000 in cash. He considered it a fact the money went to Bonanno “with the knowledge and collusion” of Saputo.
“Joseph Bonanno has had significant economic and transactional involvement over a substantial period of years with several Canadian cheese companies owned by the members of the Saputo family and by Lino Saputo in particular,” Breitel wrote in his 1980 report.
The evidence, he said, pointed to a relationship that lasted between 1964 and 1979.
Breitel added: “Lino Saputo has attempted to conceal from the Department his and his companies’ involvement with Bonanno, he has failed to furnish all the material information required by the Commissioner, and has made material statements that are false, misleading, and deceitful.”
Breitel’s determination was confirmed on appeal.
The investigation by U.S. law enforcement into Saputo’s ties with Bonanno ended with the decision to withhold the cheesemaking licence.
Bonanno died in 2002 at the age of 97. His obituaries claimed he was the model for actor Marlon Brando’s character in The Godfather.
Saputo Inc. went public in 1997. The company, which has operations in Australia, Argentina, the U.S. and the U.K., is worth an estimated $15 billion.
Saputo, a member of the Order of Canada, has never been charged with a criminal offence. He declined an interview request from Radio-Canada’s investigative unit.
In a letter, Saputo’s lawyer said his client has “never had ties to organized crime, be it in a direct or indirect manner.”
Saputo’s memoir refers to the “nightmare” of “false allegations” about being tied to the Mafia.
There is no mention in Saputo’s book to Borsellino’s links to Bonanno.
The one reference to Borsellino reads: “We also founded Petra, our real estate arm, now one of the largest private real estate companies in Québec, with over 8.3 million square feet of property in Montréal. My dear friend and brother-in-law Giuseppe Borsellino is president.”
Borsellino has been in contact with other Mafia figures besides Bonanno.
In 1995, Borsellino and his wife, Elina Saputo, attended a wedding anniversary party for Nicolo Rizzuto and Libertina Manno.
They can be identified in a video of the event that was given to Radio-Canada by a confidential source.
Rizzuto’s son, Vito, was also present. He was widely considered at the time to be the head of the Montreal Mafia.
Court documents have identified both Rizzutos as members of the Bonanno crime family.
A confidential police document obtained by Radio-Canada alleges Borsellino had contact with the Rizzutos at least until the mid-2000s.
Like Saputo, Borsellino has never been charged with a crime. He, too, declined to answer questions from Radio-Canada.
His lawyer said in a letter that Borsellino, who remains chair of Groupe Petra’s board, had done “nothing wrong.”
Radio-Canada asked Saputo to comment on his brother-in-law’s contact with the Rizzutos. He did not respond.
Reporting by Gaétan Pouliot and Marie-Maude Denis. The English version of this story was written by Jonathan Montpetit.
If you have information you’d like to share with the Radio-Canada’s Enquête team, you can reach Gaétan Pouliot at firstname.lastname@example.org.
One of the reasons people are worried climate change will be almost impossible to stop is that pumping carbon into the atmosphere is simply way too profitable.
Even as new reports yesterday from NASA and the British weather service showed climate change had created the hottest decade in history, according to the traditional rules of capitalism, if companies make fortunes from digging coal and building pipelines, then nothing is going to stop them.
With so much money at stake, not only do shareholders and employees get onside, but governments may often be persuaded to actively back increased carbon output, even when they have evidence it will ultimately damage the local and global economy.
That’s why this week’s announcement by BlackRock — often described as the world’s richest money manager, with about $10 trillion to invest (no, the T is not a mistake) — is both surprising and encouraging.
Although it is easy for climate activists to insist BlackRock has not gone far enough, the moves it has made — seen partly as a response to outrage that the company’s previous green talk was just that, talk — appear to offer evidence that business can be swayed by public pressure.
The news is especially interesting because, while global in scope, BlackRock is a U.S. company — a country where the Trump administration seems to be doing everything it can to stand in the way of climate action, from defanging the Environmental Protection Agency to withdrawing from the Paris Agreement.
That is not the way things are supposed to work, and according to people like energy economist Mark Jaccard, it is governments that must be forced by public pressure to take the lead on climate change.
“You need to get climate-sincere politicians in there; you have to be able to identify them and you have to keep them there,” Jaccard said in a recent interview. “And it turns out with something like climate change, that’s really difficult.”
Jaccard is the kind of guy who supports anything that works to solve the climate problem, but, as he contends in his book The Citizen’s Guide to Climate Success, we must not depend on the motive of profit.
Because of the low cost and high commercial efficiency of continuing to use fossil fuels, the only effective climate action entails voters forcing governments to change the rules.
While most climate advocates say that remains true, BlackRock’s moves to cut investments in companies that earn more than 25 per cent of their revenue from fossil fuels, get out of coal, and require companies in which it invests to reveal their level of climate risk (sometimes called climate transparency) seem to belie the idea that corporations have no morals.
Many commentators scoff at that idea, including Ian McGugan, who writes in The Globe and Mail that “BlackRock’s Green Investing Strategy is Not a Moral Awakening.” Like many others, however, he concedes that huge protests specifically naming the company have likely influenced its change in focus.
It may be that coal is simply a bad investment today. But the fact that “the world’s most powerful investor” says so too makes it harder to ignore.
And while it is easy to say that green credentials are just an exercise in public relations, expressions of public morality, such as the campaign against blood diamonds, have had a real business impact.
As with all moral questions, the argument over whether business leaders are merely parroting a growing public anxiety to earn greater respect applies just as well to the rest of us. On the other hand, companies are not just machines. They are organizations made up of people, some of whom worry about the world their children and grandchildren will inherit.
And even in giant corporations, opinions on climate change matter.
Also this week, James Murdoch, son of global media mogul Rupert Murdoch (and a company board member), made global headlines when he criticized News Corporation’s influential media outlets for promoting climate denial during Australia’s recent fires.
BlackRock’s new position on climate is no reason for activists to stop worrying; as Jaccard insists, government rules and public pressure remain crucial.
And as the company has outlined, one of the reasons to begin adjusting its portfolio now is that a groundswell of public and (some) government support for climate action means climate-unfriendly businesses will no longer be good investments.
For a company investing for the future, that matters.
“Awareness is rapidly changing, and I believe we are on the edge of a fundamental reshaping of finance,” said BlackRock CEO Larry Fink in a letter to company executives.
Yesterday, the World Economic Forum, whose annual Davos gathering of the very rich and powerful which begins next week, released its latest annual risk report, titled 15 Years of Risk: From Economic Collapse to Planetary Devastation. Four of the Top 5 worries delineated by the world’s business and political elite had to do with climate.
In the past, the activist group BlackRock’s Big Problem have accused the investment giant of being “the biggest driver of climate chaos you’ve never heard of.”
And while it remains to be seen whether the company’s efforts will truly make a difference, at the very least, its latest move means a lot more people now have heard of them.
Follow Don on Twitter @don_pittis
U.S. President Donald Trump signed a trade agreement Wednesday with China that is expected to boost exports from U.S. farmers and manufacturers and is aimed at lowering tensions in a long-running dispute between the economic powers.
Trump said during a White House ceremony that the deal is “righting the wrongs of the past.” He promoted the signing as a way of delivering economic justice for American workers and said, “We mark a sea change in international trade” with the signing.
Chinese leader Xi Jinping, in a letter to Trump that was read by Beijing’s chief negotiator Liu He, said concluding the first phase of the trade deal was “good for China, the U.S. and for the whole world”
But the so-called Phase 1 pact does little to force China to make the major economic reforms — such as reducing unfair subsidies for its own companies — that the Trump administration sought when it started the trade war by imposing tariffs on Chinese imports in July 2018. The U.S. has yet to reveal details of the agreement, though U.S. Trade Representative Robert Lighthizer has said they would be made public Wednesday.
Most analysts say any meaningful resolution of the key U.S. allegation — that Beijing uses predatory tactics in its drive to supplant America’s technological supremacy — could require years of contentious talks. And sceptics say a satisfactory resolution may be next to impossible given China’s ambitions to become the global leader in such advanced technologies as driverless cars and artificial intelligence.
“The signing of the Phase 1 deal would represent a welcome, even if modest, de-escalation of trade hostilities between China and the U.S.,” said Eswar Prasad, a Cornell University economist and and former head of the International Monetary Fund’s China division. “But it hardly addresses in any substantive way the fundamental sources of trade and economic tensions between the two sides, which will continue to fester.”
In a letter to Trump on Monday, the top Senate Democrat, Chuck Schumer of New York, complained that the Phase 1 deal appeared to make “very little progress in reforming China’s rapacious trade behaviours and seems like it could send a signal to Chinese negotiators that the U.S. can be steamrolled.”
The thornier issues are expected to be taken up in future rounds of negotiations. But it’s unclear when they will begin. And few expect much progress before the November U.S. election.
“Phase 2 — I wouldn’t wait by the phone,” said John Veroneau, who was a U.S. trade official in the George W. Bush administration and is now co-chair of the international trade practice at Covington & Burling. “That is probably a 2021 issue.”
Under the Phase 1 agreement, which the two sides reached in mid-December, the administration dropped plans to impose tariffs on an additional $160 billion US in Chinese imports. And it halved, to 7.5 per cent, existing tariffs on $110 billion of good from China.
For its part, Beijing agreed to significantly increase its purchases of U.S. products. According to the Trump administration, China is to buy $40 billion a year in U.S. farm products — an ambitious goal for a country that has never imported more than $26 billion a year in U.S. agricultural products.
The deal may be most notable for what it doesn’t do. It leaves in place tariffs on about $360 billion in Chinese imports — a level of protectionism that would have been unthinkable before Trump took office.
Chad Bown of the Peterson Institute for International Economics calculates that the Phase 1 agreement will leave nearly two-thirds of Chinese imports covered by Trump’s tariffs. Beijing’s retaliatory tariffs affect more than half of American exports to China. The average U.S. tariff on Chinese imports has risen from three per cent in January 2018 to 21 per cent now.
High tariffs between the world’s two biggest economies, Bown says, are now “the new normal.”
The Trump administration argues that the Phase 1 deal is a solid start that includes Chinese commitments to do more to protect intellectual property, curb the practice of forcing foreign companies to hand over sensitive technology and refrain from manipulating their currency lower to benefit Chinese exporters. In advance of the Phase 1 signing, in fact, the Treasury Department on Monday dropped its designation of China as a currency manipulator.
It’s a really, really good deal for the United States. And it will work if reformers in China want it to work.– Robert Lighthizer, US. trade representative
And by maintaining significant tariffs on Chinese imports, the administration retains leverage to force Beijing to abide by its commitments — something the United States says Beijing has failed to do for decades.
“We’ve never punished them before,” said Derek Scissors, China specialist at the American Enterprise Institute. “If you don’t have tariffs, you can write down anything you want, and the Chinese will cheat.”
The administration contends that, however narrow the Phase 1 agreement may be, it represents a significant breakthrough.
“Across the board, it’s a really, really good deal for the United States,” Lighthizer told Fox Business Network on Monday. “And it will work if reformers in China want it to work. And if that happens, great. If it doesn’t happen, (the pact) is fully enforceable… We expect them to live up to the letter of the law. We’ll bring cases — we’ll bring actions against them if they don’t.”
Scissors said the trade war has already delivered a benefit for Trump, even if it hasn’t forced Beijing to make major changes to its economic policy: Trump’s tariffs have reduced Chinese exports to the United States and narrowed America’s trade deficit with China.
The president has long lambasted the U.S. trade gap with Beijing as a sign of economic weakness, though many economists disagree. A wide trade deficit can actually reflect economic strength because it means that a nation’s consumers feel prosperous and confident enough to spend freely — on imported goods as well as on home-grown goods.
So far this year, the U.S. deficit with China in the trade of goods has declined by 16 per cent, or $62 billion, to $321 billion compared with a year earlier. And the deficit will narrow further if Beijing lives up to its pledges to buy dramatically more American imports.
Trump’s tariff hikes have proved to be a headwind for China’s economy, which was already slowing, though the damage has been less than some forecasters expected. Chinese global exports eked out a 0.5 per cent increase in 2019 despite a plunge in sales to the United States, according to Chinese customs data.
Chinese exporters responded to Trump’s tariff hikes by shipping goods to the United States through other countries and by stepping up sales to Asia, Europe and Africa. The government reported double-digit gains in 2019 exports to France, Canada, Australia, Brazil and Southeast Asia.
Economists said the tariff war slowed Chinese growth, which hit a multi-decade low of six per cent in the quarter ending in September, by as little as 0.6 percentage point. Weak domestic demand and the cooling of a construction boom inflicted more damage.
“It is unrealistic for the U.S. government to think they could defeat China by exerting extreme pressure,” said Tu Xinquan, director of the China Institute of WTO Studies at the University of International Business and Economics in Beijing. “As an economy with a massive size, China will gradually absorb such external shocks.”
“China didn’t get everything they wanted out of this deal, and the U.S. has obviously not got the structural changes in the Chinese economy they wanted,” said Julian Evans-Pritchard of Capital Economics. “But they are going to get a substantial increase in exports and a reduction in the bilateral trade (deficit), which I think the Trump administration will clearly see as a win.”
On Tuesday, the restaurant chain told CBC News that it hopes to have a new national policy in place by the end of February, which will allow customers to be served coffee or tea in their personal mug instead of a disposable cup.
“We listen to our guests, and we know this is an area of growing importance to Canadians,” said spokesperson Ryma Boussoufa in an email.
The statement comes after CBC News first reached out to McDonald’s in October, inquiring about customer anger over its current policy.
Brenya Green said she was stunned when she recently ordered a coffee at McDonald’s and the restaurant chain told her that drinks must be served in disposable cups for sanitary reasons.
“I just thought it was ridiculous,” said Green, who lives in Toronto. “I’ve been to so many coffee shops and I’ve never encountered that before.”
Hi Michael. We normally don’t allow the usage of reusable mugs. While some restaurants may serve guests with their own cups, food safety remains a top priority for us to avoid cross-contamination, more frequently observed when using personal tumblers. We’ll share your feedback.
McDonald’s Canada told CBC News that currently, individual locations decide if they will accept personal mugs. However, on Twitter, the chain has provided a more detailed explanation, telling numerous irate customers that, while some locations may accept reusable mugs, it “normally” rejects them “to avoid cross-contamination.”
As concerns over the environment grow, McDonald’s — along with other fast food restaurants — faces pressure to curb its takeout waste.
Disposable paper coffee cups are a big concern, because they’re lined with plastic, which prevents leakage but makes them difficult to recycle. As a result, most municipal recycling depots — including Toronto’s — reject them, so they wind up in landfills.
Research firm Euromonitor estimates Canadians bought 2.49 billion litres of brewed coffee from food service outlets in 2019, enough to fill almost six billion medium-sized coffee cups.
<a href=”https://twitter.com/McDonaldsCanada?ref_src=twsrc%5Etfw”>@McDonaldsCanada</a> Your staff couldn’t fill a reusable coffee mug for “hygiene” reasons. How come every other coffee shop in Toronto does? I asked for a refund purely on principle. <a href=”https://twitter.com/hashtag/sustainability?src=hash&ref_src=twsrc%5Etfw”>#sustainability</a>
Took our reusable coffee mugs in to <a href=”https://twitter.com/McDonaldsCanada?ref_src=twsrc%5Etfw”>@McDonaldsCanada</a> today, asked for them to be used for our coffee and were handed two coffees in their disposable cups with plastic lids 🤦🏻♀️🤷🏻♀️<a href=”https://twitter.com/hashtag/McDsfail?src=hash&ref_src=twsrc%5Etfw”>#McDsfail</a> <a href=”https://twitter.com/hashtag/theenvironmentmatters?src=hash&ref_src=twsrc%5Etfw”>#theenvironmentmatters</a> <a href=”https://twitter.com/hashtag/reduce?src=hash&ref_src=twsrc%5Etfw”>#reduce</a>
Many coffee shops in Canada have accepted reusable mugs for years, prompting customers to question McDonald’s current policy.
“It’s just not acceptable,” said Judith Banville of Craighurst, Ont., who blasted McDonald’s on Facebook in September after the restaurant refused to serve her tea in her personal mug. “It does not make sense to continue to prevent people from using a reusable cup.”
Brenya Green works as a sales representative for Adventure Canada, which offers Arctic expeditions, and said she became passionate about the environment after seeing firsthand how global warming is shrinking glaciers.
“We’re seeing it now and it’s scary.”
To expose the McDonald’s policy on reusable mugs, Green returned to the restaurant with a colleague, Victoria Polsoni, who filmed Green again failing to have a coffee served in her personal mug. Since it was posted on Facebook in August, the video has garnered 10,000 views.
“I just had to tell this story,” said Polsoni, who also lives in Toronto. “It triggered a fire inside me.”
Coffee competitors Tim Hortons and Starbucks said that they have accepted customers’ reusable mugs for decades, and even provide a 10 cent discount to customers who use them.
However, several Tim Hortons customers complained to CBC News that they have witnessed employees at certain locations pour the coffee into a disposable cup before filling a customer’s reusable mug.
Tim Hortons told CBC that all locations should pour customers’ drinks directly into their reusable mugs — as long as they’re clean.
Hi, Brenda. Our team members are trained to prepare all hot beverages directly into travel mugs. If this policy wasn’t followed, please DM us the location address, and we’ll follow up with them directly. Thanks for reaching out about this. <a href=”https://t.co/dkbZ9N86ic”>https://t.co/dkbZ9N86ic</a>
Even though Tim Hortons and Starbucks accept reusable cups, they still face a challenge, as most of their customers opt for disposable ones.
According to a 2019 Greenpeace Canada brand trash audit, Tim Hortons, Starbucks and McDonald’s made the list of the top five companies behind branded plastic waste collected in nine beach and green space cleanups across the country.
Coffee cups and lids, collectively, were among the top five single-use plastic items most commonly found. Other top offenders included straws, stir sticks and food wrappers.
Emily Alfred, a senior campaigner with the Toronto Environmental Alliance, said that when it comes to coffee cups, the focus should be on reusables, because recyclable items still create a bigger environmental footprint.
“It’s still about using materials once and just recycling them,” said Alfred. “We need to move toward the circular economy, where we conserve resources.”
Tim Hortons agrees and said it’s on a mission to convince more customers to bring personal mugs. The chain plans to widely promote reusable cups this year, and recently started selling ones priced as low as $1.99 each.
“If anyone’s going to be able to change guest behaviour in terms of going with reusable cups and taking a more sustainable angle, it’s going to be us,” said Mike Hancock, chief operating officer of Tim Hortons, in an interview.
Alfred said to bring about effective change, governments need to introduce regulations.
“We kind of need every level of government to be moving on this as quickly as possible.”
Some municipalities already have plans in motion. On Jan. 1, Vancouver banned foam cup and takeout containers, and will introduce a 25-cent charge for disposable paper cups next year. Toronto is also exploring ways to reduce single-use takeout materials.
The federal government has pledged to ban certain single-use plastics as early as next year. No word yet if disposable coffee cups will make the list.
It pays to get a post-secondary education in Canada, but not nearly as much if you’re a woman, a new analysis of tax filings and educational attainment has shown.
The report, called How Much Do They Make?, found that the gender pay gap starts right out of the gate, with women earning an average of $5,700, or 12 per cent, less than men one year after graduation.
That gap widens to 25 per cent five years after graduation, when women make an average of $17,700 less across all disciplines.
The authors used a new set of data from Statistics Canada and Employment and Social Development Canada that follows all graduates from publicly funded colleges and universities in Canada starting in 2010, and tracks their income through tax filings.
This report analyzes the income of 2010 graduates for a five-year period ending in 2015, when the most recent data is available. It looks at six levels of post-secondary credentials, ranging from college-level certificates and diplomas, to doctoral and professional degrees, and within those, 11 fields of study.
The report does not capture data about the incomes of ticketed tradespeople who have come up through the apprenticeship system, though that information will be included in forthcoming research.
Two organizations collaborated on the report: the Labour Market Information Council (LMIC), a non-profit research institute, and the Education Policy Research Initiative (EPRI), a national research organization based at the University of Ottawa.
Labour economist Steven Tobin, executive director of LMIC, said that while the data shows clear overall economic benefits to having a post-secondary education, the immediacy and extent of the gender pay gap was startling.
“What surprised me the most was that in looking at the earnings by credential and field of study, women earn less than men in every credential and every field of study,” said Tobin. “There isn’t one combination of a credential and a field of study where women earn more than men five years after graduation.”
Andrea Gunraj, vice-president of public engagement for the Canadian Women’s Federation, said the results were disconcerting but in keeping with what other research has shown about “a persistent pay gap across the board for women.”
“We see that women are making 87 cents on the dollar that men make on an hourly basis,” she said. “This is one piece of the bigger puzzle of how gender discrimination plays out in our society — and particularly at work for women.”
The problem is even worse for women with disabilities and those from minority groups, she said.
As for why the wage gap would appear in the first year of a woman’s career, before things like caring for children are most likely to be in the mix, there are a few factors at play, said Gunraj.
“The statistics tells us that the discrimination happens even at hiring, when pay decisions are being made. It’s happening with things like access to mentorship, training and promotion moments — the wage gap is still persisting.”
There’s also a concentration of women in lower-paying fields, something that’s sometimes referred to as “a pink ghetto,” she said.
What’s more, she said, when women’s numbers increase in a sector and it’s seen as “women’s work,” the pay drops.
“You see this in the caring sectors, in the food-service sectors, in the retail sectors where women tend to be concentrated in.”
By contrast, men are over-represented in jobs like the trades, and as a result, those sectors are well paying, she said.
It doesn’t help that women don’t always know their worth when it comes to starting salary, said Cassie L. Rhéaume, general manager for the Montreal office of Lighthouse Labs, a tech training organization best known for its coding bootcamps.
When they’re eager to get their tech careers started, women may not realize they’re leaving money on the table.
“But once you’re in the field and you talk with your colleagues, you realize the difference, you realize the missed opportunities,” said Rhéaume.
After that, it’s hard to catch up.
While all Lighthouse Lab students get extensive coaching on how to prepare for interviews and salary negotiations, Rhéaume said she takes extra care to ensure the female students in her class are prepared to ask questions and advocate for themselves throughout the hiring process.
Liesl Barrell, CEO of Third Wunder, a digital marketing firm in Montreal, is also a mentor to young women in tech through her role as executive director of the non-profit Montreal Girl Geeks.
At one workshop Barrell ran, she said one young woman shared a hiring story that exemplifies the problem she and other young women face right at the start of their careers.
After a successful interview, the employer in question “gave her a piece of paper, said, ‘Here’s your offer; we don’t negotiate.’ So she accepted the offer, just thinking that’s how it went,” said Barrell.
A while later, the young woman’s boyfriend was offered a similar role at the company. He was also given a piece of paper and was told the company doesn’t negotiate.
“What he heard as a privileged male was ‘challenge accepted.’ So he went back, and he negotiated, and he got more.”
Despite the troubling wage gap it revealed, the report findings did offer an overall endorsement for pursuing a post-secondary education.
“When looking at students’ earnings after graduation, the results we see here are very encouraging,” said LMIC’s Tobin.
Taking into account all post-secondary levels, those who graduated in 2010 saw their earnings grow an average of 8.4 per cent per year after adjusting for inflation.
For context, that’s higher than the average for Canadians with and without post-secondary education in the same general age group (22 to 28 years), who saw real inflation-adjusted earnings grow 5.6 per cent each year in the same time period.
Ross Finnie, who teaches economics and public policy at the University of Ottawa, also leads the Education Policy Research Initiative that co-produced the report.
Across the board, earnings are generally strong, and rise substantially in the years following graduation.– Ross Finnie, director of EPRI
“Across the board, earnings are generally strong, and rise substantially in the years following graduation,” said Finnie.
People with bachelor’s degrees from 2010 made an average of $58,700 five years later. Among that group, engineering and architecture grads earned the most, averaging $80,400 five years later.
Even those with the much-maligned humanities degrees were earning $48,000 five years out, he said.
Average earnings went steadily up through the various levels of educational attainment, with master’s and doctoral degree students averaging more than undergraduates, and the highest average salaries going to those with professional degrees — doctors, lawyers, dentists and pharmacists — at an average of $99,600 at the five-year mark.
The aim of the report is to put information into the hands of students, parents and guidance counsellors who are trying to make or support informed decisions on post-secondary paths, said Finnie.
All the data is presented in an interactive dashboard where users can see how earnings compare over a five-year period for the six different types of diplomas or degrees, and the 11 fields of study.
“An important caveat is that these do not necessarily represent causal effects,” he said. “Any given individual won’t necessarily make what the levels indicated by past graduates [do], because their own outcomes will depend on a range of individual factors.”
Likewise, Tobin cautions that salary alone should not dictate career decisions.
“It doesn’t come as any surprise that doctors or lawyers have higher earnings,” he said, suggesting that people who aren’t interested in those fields should take caution before pursuing them for the paycheque alone.