MONTREAL - Transportation firm TransForce says its first-quarter profits plummeted to $5.9 million from $18.9 million a year ago due to severe winter weather, higher costs and persistent economic softness.
The Montreal-based trucking, logistics and waste management firm earned six cents per diluted share for the period ended March 31, compared with 20 cents per share a year earlier.
Adjusting for one-time items including the fair value of derivatives and currency gains, TransForce (TSX:TFI) earned $19.9 million or 20 cents per share, one cent less than analyst forecasts. That compared to $24.4 million or 26 cents per share in the prior-year period.
Revenues increased 2.8 per cent to $770.5 million, including $44.1 million from January's acquisition of Clarke Transport and Clarke Road Transport. Excluding acquisitions, revenues declined due to lower volume and a planned reduction in rig moving activities across North America, partially offset by the higher U.S. dollar.
TransForce said earnings before interest and taxes was $33.2 million, down from $44.6 million in the prior year.
It generated $35.1 million of free cash flow due to lower taxes and proceeds from asset sales, which was mainly used to repurchase $25.9 million of its common shares.
TransForce shut its Canadian rig-moving business last year and followed that up by closing four additional rig-moving terminals in the U.S. and putting the assets up for sale.
Energy services revenues sustained the biggest revenue hit in the quarter, falling 14.3 per cent, while the less-than-truckload segment's profits were down the most at nearly 67 per cent despite a 20.5 per cent increase in revenues.
The largest segment â€” package and courier â€” earned $12.9 million on $306.6 million of revenues, compared with $17.2 million on $304.1 million a year ago.
Although business conditions remain challenging due to the weak economy, the company said it was encouraged by signs of firmer pricing in less-than-truckload and truckload segments.
Walter Spracklin of RBC Capital Markets said the results were negative despite positive trucking pricing trends.
"While severe weather impeded operating progress in the first quarter, we are optimistic that management can overcome these setbacks given recent actions to reduce exposure to unprofitable businesses and ongoing restructuring initiatives in traditional trucking operations," he wrote in a report.
Spracklin added that unchanged market conditions should result in cost controls, efficiency gains and acquisitions that should drive earnings growth in 2014.
On the Toronto Stock Exchange, TransForce shares closed down eight cents to $24.58 in Thursday morning trading.
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TORONTO - Ontario's governing Liberals â€” or whichever party succeeds them â€” should work with the private sector to deliver public services at less cost, former Liberal finance minister Dwight Duncan said Thursday.
The cash-strapped Liberals are running an $11.3-billion deficit and have doubled the debt to $272 billion since they took office in 2003.
Duncan, who was treasurer from 2007 to 2013 when the province racked up record deficits, said all three parties will be compelled to look at more efficient ways to provide services.
Ontario has a "staggering" debt, insufficient infrastructure, gridlock in the Toronto area and an aging population that will drive up health-care costs, he said.
But this isn't the "same old tired mantra of privatization," said Duncan, who left politics last year for the private sector.
"The idea is to save money while delivering the same services and being able to apply the savings to those priority areas, whatever priority areas the government of the day identifies," he said.
Many countries have saved money by working with private companies on prison management, health and administrative services, according to an Ontario Chamber of Commerce report that Duncan helped put together. But the province is lagging behind, it said.
Teranet, a private company that has a licence to provide electronic land registration services, is a success story, Duncan said. The Ontario government got $1 billion and 50 years of royalty payments in the deal and still controls fee increases, the report said.
But other deals were massive failures, such as Ontario's Ornge air ambulance service, a not-for-profit entity that ended up under police investigation for financial irregularities. The auditor general rapped the Liberals on the knuckles for failing to oversee Ornge, despite giving it hundreds of millions of dollars.
"I concur Ornge did not work out that well and there are bad deals done," Duncan said.
"There've been bad deals done in other areas on the whole privatization file. But that doesn't mean you shouldn't proceed."
Controversies like Ornge can be avoided by opening up all contracts to public scrutiny and requiring companies to report any information that's not commercially sensitive, said Josh Hjartarson of the chamber of commerce.
But the government must also ensure it has the right tools and skills to effectively manage the partnership, he said.
"Part of the lesson here (with Ornge) is that you can't just take a public service, cut and lift it and place it out there in the realm to do its own thing," Hjartarson said.
"What you actually need to do is what we call 're-engineer' the retained organization."
Private sector involvement isn't appropriate for all government services, Duncan said. But health-care billing, issuing drivers' licences and outpatient medical procedures are some areas that could benefit.
There are concerns that private entities will find ways to squeeze as much profit as they can from providing those services, such as paying workers less for the same work.
The cost savings won't come from wages, but from improving business processes with better technology, said Hjartarson.
Contracts can also include a "windfall" provision, he said. If the private partner starts making too much money, the government can collect some of those gains.
Duncan said he tried to encourage contracting out of some government services when he was finance minister, such as the family responsibility office which collects money from deadbeat parents and spouses.
But he couldn't always convince his colleagues to do it, he said. Some weren't comfortable with the idea or didn't think it was a good deal.
With good reason, said veteran New Democrat Gilles Bisson. Ontario's history is littered with privatization schemes gone wrong, from the electricity system to electronic health records.
"Clearly what we don't need to do is what he's suggesting," he said.
"And he's not one to be preaching to Ontarians about how to better spend taxpayers' dollars, because it seems to me he didn't do a good job."
The Liberals say they already operate a lean government, with the lowest spending program per capita among the provinces.
Finance Minister Charles Sousa has also asked for advice on ways of getting more value out of key public assets such as the Liquor Control Board of Ontario, Ontario Power Generation and Hydro One.
Duncan also mused about squeezing more returns out of them when he held the job. It's a question all governments will have to ask themselves, he said.
"You've got literally billions of dollars tied up in the balance sheet of those organizations," he said. "So you might be getting an eight per cent return from the LCBO but should you be getting a 10 per cent return?"
TORONTO - Some of the most active companies traded Thursday on the Toronto Stock Exchange and the TSX Venture Exchange:
Toronto Stock Exchange (14,554.25 up 20.86 points):
Bombardier Inc. (TSX:BBD.B). Aerospace. Up two cents, or 0.50 per cent, to $4.03 on 14.2 million shares.
Yamana Gold Inc. (TSX:YRI). Miner. Down 27 cents, or 3.14 per cent, to $8.34 on 6.7 million shares.
Osisko Mining Corp. (TSX:OSK). Miner. Down 16 cents, or 2.02 per cent, to $7.77 on 6.4 million shares.
Twin Butte Energy Ltd. (TSX:TBE). Oil and gas. Down five cents, or two per cent, to $2.45 on 5.7 million shares.
Lundin Mining Corporation (TSX:LUN). Miner. Up 23 cents, or 4.23 per cent, to $5.67 on 5.6 million shares.
Nautilus Minerals Inc. (TSX:NUS). Miner. Up 16.5 cents, or 70.21 per cent, to 40 cents on 5.4 million shares. The company announced it has reached financial and environmental agreements with Papau New Guinea that will enable is Solwara 1 offshore mineral exploration project to proceed.
Toronto Venture Exchange (1,014.45 up 3.47 points):
Sensio Technologies Inc. (TSXV:SIO). Computer hardware. Up six cents, or 22.22 per cent, to 33 cents on 11 million shares.
Petrodorado Energy Ltd. (TSXV:PDQ). Oil and gas. Up one cent, or 25 per cent, to five cents on 4.9 million shares.
Companies reporting major news:
Alamos Gold Inc. (TSX:AGI). Miner. Down 22 cents, or 2.14 per cent, to $10.05 on 589,837 shares. The Toronto-based company saw its first-quarter profit shrink to US$2.7 million or two cents per share, down 90 per cent compared with the same period last year as it sold fewer ounces at a lower price, but says the second half of 2014 is expected to be stronger.
Barrick Gold Corp. (TSX:ABX). Miner. Down 34 cents, or 1.74 per cent, to $19.25 on 4.6 million shares. The company has renewed its overtures to Newmont Mining Corp. to resume merger talks, the Globe and Mail reported. Citing an unidentified person familiar with the situation, the Globe said Barrick has formally proposed reopening talks that broke down last week.
Domtar Corp. (TSX:UFS). Fibre-based products. Up $1.59, or 1.48 per cent, at $108.78 on 14,386 shares. The Montreal-based company missed expectations as its net income dropped 13 per cent due to weather-related issues, increased costs and a drop in productivity of some of its pulp and paper mills. The company, which reports in U.S. dollars, earned US$39 million for the period ended March 31, compared with $45 million a year earlier.
Imperial Oil Ltd. (TSX:IMO). Up 49 cents, or 0.93 per cent, to $53.10 on 655,186 shares. The CEO of the company says the Keystone XL pipeline is just as important today as it was when first proposed in 2008. But to cope with uncertainty over regulatory approvals, Imperial has committed to send its crude to market on a variety of proposed pipelines, such as the Trans Mountain expansion to the West Coast and the Energy East line to the East Coast.
Potash Corporation of Saskatchewan Inc. (TSX:POT). Fertilizer. Up 67 cents, or 1.75 per cent, to $39.02 on 2.5 million shares. The company posted quarterly net income of US$340 million or 40 cents a share, down sharply from 63 cents per share, or US$556 million, in the same period last year. However, that was still well above its own guidance.
Sears Canada Inc. (TSX:SCC). Retail. Down 50 cents, or 2.99 per cent, to $16.20 on 13,154 shares. The company's chief executive Douglas Campbell says he will dedicate more resources to the struggling company's online shopping experience and an updated inventory management system.
Shaw Communications Inc. (TSX:SJR.B). Communication services. Down one cent, or 0.04 per cent, to $26.34 on 627,558 shares. The Calgary-based telecommunications company is getting into the streaming music business through a partnership with digital service Rdio.
The price of oil rose to near US$102 a barrel Thursday on worries about tensions in Ukraine.
Benchmark West Texas Intermediate crude for June delivery rose 50 cents to close at US$101.94 a barrel on the New York Mercantile Exchange. Brent crude, an international benchmark, gained $1.22 to US$110.33 a barrel on the ICE Futures exchange in London.
Ukraine is going through its biggest political crisis since the fall of the Soviet Union. Ukrainian forces launched an operation Thursday to drive pro-Russia insurgents out of occupied buildings in the country's tumultuous east. In response, Russia's defence minister announced new military exercises for troops massed near Ukraine's border.
Gains for U.S. crude oil were limited because of bulging oil supplies.
The U.S. Energy Department's Energy Information Administration said Wednesday that oil supplies rose 3.5 million barrels in the week that ended April 18. That exceeded the expectations of analysts surveyed by Platts, who forecast an increase of 3.1 million barrels. At a record 397.7 million barrels, supplies are now 2.3 per cent above year-earlier levels.
In other energy futures trading in New York, wholesale gasoline was flat at US$3.09 a U.S. gallon (3.79 litres), heating oil rose three cents to US$3.01 a gallon and natural gas fell 2.5 cents to US$4.705 per 1,000 cubic feet.
(TSX:ECA), (TSX:IMO), (TSX:SU), (TSX:HSE), (NYSE:BP), (NYSE:COP), (NYSE:XOM), (NYSE:CVX), (TSX:CNQ), (TSX:TLM), (TSX:COS), (TSX:CVE)
DALLAS - First-quarter net income at UPS slumped 12 per cent as winter storms increased costs for the shipping giant and cut into its revenue.
The Atlanta company said Thursday that the rough start to the year means that full-year earnings will come in at the low end of its earlier forecasts.
Separately, UPS said that a new contract with the Teamsters union covering 253,000 employees will take effect on Friday. The 5-year deal is retroactive to last August and includes wage and benefit increases and a new base wage of $10 per hour for part-timers, the company said.
About 125,000 full-time and part-time employees who were still on UPS-sponsored health plans will move to three separate multi-employer plans, UPS said in a regulatory filing. UPS said it will make a cash payment of $2.27 billion and transfer $1.2 billion for post-retirement obligations to the multi-employer plans.
UPS said that it expects to take a pretax charge of about $1.047 billion in the second quarter to cover the changes.
United Parcel Service Inc. reported first-quarter net income of $911 million, or 98 cents per share, well short of the $1.08 that Wall Street was expecting and less than the $1.04 billion, or $1.08 per share, it earned a year earlier.
UPS said winter storms reduced operating profit by $200 million as costs rose.
Revenue increased by 2.6 per cent to $13.78 billion, but that was still shy of the $13.91 billion that analysts had forecast, according to a FactSet survey.
Average daily shipments in the U.S. rose 4.2 per cent, but at the same time, revenue per package fell at home and abroad as customers shifted toward lower-priced services.
UPS said that full-year earnings would be at the low end of its earlier forecast of between $5.05 and $5.30 per share. Analysts expect $5.18 per share.
Shares of UPS Inc. fell 60 cents to close at $98.64. They are down 6 per cent so far in 2014.
EDMONTON - The company that owns and operates the largest beef processing plant in Canada is facing environmental charges in Alberta.
The province is accusing Cargill Limited of failing to immediately report a case where samples from the company's High River plant's industrial waste water system were allegedly falsified.
The government is also charging a man who no longer works at Cargill in connection with the April 2012 allegations.
The charges under Alberta's Environmental Protection and Enhancement Act could result in fines or other penalties.
Cargill says the test results were compromised during a time when its waste water treatment system was being improved.
The company says it conducted its own internal investigation and reported its finding to Alberta officials.
"Following the report, Cargill implemented the necessary corrective actions that would have the facility back into compliance with regulations," Cargill said in a statement from Winnipeg
"Throughout this process Cargill co-operated fully with government officials."
Cargill and Pushp Pal Singh of Calgary are to appear in Okotoks provincial court on the charges May 27.
Alberta Environment officials declined comment.
EDMONTON - The Alberta government has officially approved its $43-billion budget for 2014-15.
The document completed third reading Wednesday night and the governing Tories used their majority to pass it 33-20.
The budget forecasts a $1.1-billion surplus in day-to-day spending, but infrastructure debt is pegged to hit $21 billion by 2017.
The Opposition Wildrose has criticized Finance Minister Doug Horner for plunging Alberta back into the red less than a decade after former premier Ralph Klein paid off the province's $23-billion debt.
Horner has said borrowing for building is prudent because interest rates are low and tens of thousands of newcomers are arriving in Alberta each year.
Critics have also said the budget is presented in a confusing format to hide the deficit and on Wednesday auditor general Merwan Saher said it doesn't meet general accounting standards.
Horner defended the approach Thursday. He said splitting the budget into savings, capital spending and day-to-day spending is the best way to make sure Albertans understand how money is allocated.
"If you look at municipalities, they do it exactly the same way. They separate out their operating from their capital," said Horner.
"Why would we deprive Albertans of having the same level of scrutiny on our numbers as we require of the municipalities?"
The Wildrose party has suggested the government could manage spending on infrastructure projects with better planning and priorities.
The NDP has said it accepts the idea of borrowing to build, but agrees with the Tories that it would be unacceptable to go into debt for day-to-day spending.
Visa Inc.'s profit jumped 26 per cent in its fiscal second quarter from a year earlier as the company benefited from strong growth in payments volume, service revenue and a one-time tax gain.
The latest earnings exceeded Wall Street estimates, but revenue fell slightly short. Management said Thursday that revenue growth was hurt during the January-March quarter by a stronger U.S. dollar and one-time items.
The company projects that the same factors will have a slightly more pronounced impact on revenue growth in the third quarter, but added that it expects revenue growth will rebound in the company's fiscal fourth quarter.
Shares of Visa fell almost 4 per cent in after-hours trading.
Foster City, Calif.-based Visa is the world's largest processor of debit and credit card payments. As such, it benefits from heightened consumer spending, and its results are closely watched because they can be a window into the buying habits and financial health of consumers.
An unusually bitter winter sent factories, hiring and consumer spending into hibernation earlier this year, but signs emerged last month that consumers started spending more. U.S. retail sales rose last month by 1.1 per cent.
Visa's Chief Financial Officer Byron Pollitt said on a conference call with Wall Street analysts that the Easter holiday and better weather helped boost U.S. payment volume growth 12 per cent in the first 21 days of April.
"So as we get back to more normal periods post-Easter and post-weather, I think we'll see a more normalized growth rate and one that may very well have some pent-up demand fueling it," he said.
In the first three months of the year, all credit and debit card transactions made on Visa's network grew 4.7 per cent to $1.73 trillion versus the same period last year. Of that, $690 billion came from U.S. transactions, a gain of about 8 per cent.
All told, the company processed 15.4 billion transactions during the quarter, up 11 per cent from a year earlier.
That helped boost Visa's service, data processing, international transaction and other revenue for the quarter. At the same time, the company spent slightly more on client incentives.
In all, Visa's net income improved to $1.6 billion, or $2.52 per share, for the three months that ended March 31. That compares with net income of $1.3 billion, or $1.92 per share, a year earlier.
Excluding the tax benefit, the company earned $2.20 per share in the latest quarter.
Operating revenue rose to $3.16 billion from $2.96 billion a year earlier.
Analysts polled by FactSet, on average, forecast earnings of $2.18 per share on revenue of $3.19 billion.
Visa expects fiscal 2014 net revenue growth to range between 10 per cent and 11 per cent, citing the impact of currency exchange. It also affirmed its previous prediction for earnings growth.
Shares of Visa ended regular trading up 58 cents at $209.40. The stock slid $8.10 to $201.30 in after-hours trading. The shares are down nearly 6 per cent this year through the end of regular trading Thursday.
TORONTO - Proxy advisory firm Glass, Lewis & Co. has recommended clients support the Sherritt International Corp.'s director nominees and resolutions in the mining company's fight with a dissident shareholder group.
The recommendation is the second endorsement for the management nominees by a major proxy advisory firm in the company's battle with activist investor George Armoyan and his attempt to join the Sherritt board of directors along with two other nominees.
Glass Lewis noted it was concerned with the company's relative performance to others in its sector, but said the incumbent board and management â€” including chief executive David Pathe who took over in January 2012 â€” had been at the helm for a relatively brief period.
The advisory firm said that under Pathe's tenure the company appears to have resolved some of its largest problems and shored up its balance sheet through the sale of its coal business.
"Overall, given the company's positive trajectory on these fronts and the significant executive and board turnover in the last several years, we are hesitant to advocate additional leadership changes at this time," the Glass Lewis report said.
"We believe the management nominees offer a balance of experience and fresh perspective and that electing all such nominees will allow the company to continue to build on its favourable momentum."
The report recommended shareholders vote for all of Sherritt director nominees and resolutions and against all of the dissident resolutions.
Earlier this week, proxy advisory firm ISS also recommended shareholders support the management nominees to the board, although it did back a vote to support a dissident motion to stop "special payments to directors that are not aligned with shareholder value."
However, the Glass Lewis report said the company "should retain the flexibility to create compensation packages, including appropriate perquisites, for its directors that are in line with their peers and commensurate of their services."
Sherritt chairman Hap Stephen said the Glass Lewis report was the second important endorsement by a major proxy adviser.
"With unanimous support from the leading proxy advisers, momentum is clearly behind Sherritt's director nominees," Stephen said in a statement.
"However, it's up to shareholders to vote only their blue proxy to ensure that George Armoyan and his handpicked dissident nominees cannot threaten good governance and sustainable value creation at Sherritt."
Armoyan, chief executive of investment firm Clarke Inc. (TSX:CKI), represents about five per cent of Sherritt's stock.
The dissident nominees include Armoyan, David Wood, chief financial officer of the Municipal Group of Companies, and Astor Group chief executive Ashwath Mehra, who is also the former chief executive of MRI Trading AG and senior partner for the nickel and cobalt businesses at Glencore International AG.
In addition to seats on the Sherritt board, the group wants to amend the company's bylaws to require unanimous board support for any major acquisition and changes to how both Sherritt directors and executives are paid, as well as some additional perks it says they receive.
Sherritt's (TSX:S) annual meeting is set for May 6 in Toronto.
Meanwhile, the dissidents say they will hold a webcast presentation and conference call for fellow investors this coming Monday to provide shareholders with "important information" describing the "compelling need for change" as they decide on the election of three new directors to the nine-member board.
OTTAWA - Amid a roar of criticism, Employment Minister Jason Kenney took action Thursday against the government's scandal-ridden temporary foreign worker program by banning restaurants from accessing it.
Kenney issued the surprise moratorium hours after the C.D. Howe Institute released a scathing study into the program that concluded it had spurred joblessness in B.C. and Alberta, two treasured Tory strongholds.
The smackdown to Canadian restaurants came despite Kenney's insistence in recent weeks that only a small number of companies were abusing the program and his repeated vows to deal with those bad actors harshly, including with fraud charges if necessary.
"I am announcing an immediate moratorium on the food services sector's access to the temporary foreign worker program," Kenney said in a statement.
He added his ministry will not process any new or pending applications for temporary foreign workers from restaurant operators, and any unfilled positions tied to previous approval will be suspended.
"This moratorium will remain in effect until the completion of the ongoing review of the temporary foreign worker program," he said.
Some stakeholders suggested Kenney's latest effort was feeble.
"I don't think he's gone far enough," said Stephen Hunt, the western Canada director for United Steelworkers. "This is just another Band-aid that they seem to want to put on this program."
Hundreds of Canadian companies and governmental departments employ temporary foreign workers, according to data compiled by Kenney's department. But there's been an especially dramatic increase in the number of hotels and restaurants accessing the program under the Conservatives.
Fast-food giant McDonald's has announced it is freezing its participation in the program pending a third-party audit after finding itself in hot water for hiring temporary foreign workers in B.C.
The program â€” originally designed to address shortages of skilled workers, not to recruit menial labour â€” has ballooned from about 100,000 people in 2002 to as many as 338,000 now working across the country, according to the C.D. Howe report.
The institute, a non-partisan public policy think-tank, said changes to the program enacted between 2002 and 2013 made it much easier for employers to hire temporary foreign workers. Alberta and B.C. were particular benefactors.
But amid that hiring bonanza, the study concluded, a cumulative 3.9 percentage points was added to the unemployment rates in the two provinces.
"These policy changes occurred even though there was little empirical evidence of shortages in many occupations," wrote the report's author, economist Dominique Gross.
"When controlling for differences across provinces, I find that changes to the TFWP that eased hiring conditions accelerated the rise in unemployment rates in Alberta and British Columbia."
The Conservative government has since tightened the regulations, but there have been a spate of high-profile allegations in recent months about an array of employers â€” particularly restaurants â€” abusing the program.
The C.D. Howe study, however, said that although the government's 2013 crackdown on the program was a welcome move, it's probably insufficient because of the absence of solid data about the state of Canada's labour market.
That echoes concerns raised by Don Drummond, a respected economist approached by the Tories five years ago to examine Canada's labour market. He gave the government 69 recommendations to improve the quality of the information on the labour market, but says precious few have been implemented.
Gross recommended several reforms to the program, including compiling better data on whether labour shortages actually exist in Canada.
She also called for increasing the cost of a temporary foreign worker permit for companies, and said employers should face tougher rules forcing them to prove they've truly been unable to fill jobs with Canadian workers.
Until then, Gross wrote, a temporary quota should be placed on the number of foreign workers permitted to come to Canada.
In response to the C.D. Howe report, a Kenney spokeswoman cited a Statistics Canada finding that the impact of temporary foreign workers on employment estimates is negligible, representing just two per cent of overall employment.
Alexandra Fortier also repeated what is becoming a common refrain from the government amid a growing chorus of criticism.
"Canadians must always be first in line for available jobs," she said in an email.
"Our message to employers is clear: We will not tolerate any abuse of the temporary foreign worker program. We have made reforms to the temporary foreign worker program to ensure that Canadians are first in line for available jobs and to ensure that employers do not take advantage of foreign workers."
But within hours, Kenney had blinked.
Both the federal Liberals and the NDP have been loudly demanding the government take serious action on the temporary foreign workers program.
Liberal MP John McCallum has written to the auditor general asking for an audit of the program as soon as possible, while the NDP urged the government to freeze the program entirely until the potential for abuse is addressed.
"There are people living here in Canada who are being laid off or having their hours cut to facilitate the use of foreign workers; this needs to end immediately," NDP immigration critic Jinny Sims told a news conference Thursday outside a McDonald's restaurant in Victoria.
Later Thursday, Sims said she's glad Kenney is banning restaurants from accessing the program, but called for a broader moratorium as well as an outside review of the entire initiative. Kenney's office has said it's currently assessing the temporary foreign workers program.
â€I think an internal review is not going to cut it," Sims said in an inteview. "This needs some independent review done of it; it should be somebody like the auditor general."
One expert on temporary foreign workers said she doubts many of the Canadian companies routinely accessing the program are seriously trying to find domestic workers.
"Instead of recruiting in India, you could recruit in some parts of rural Ontario, or among First Nations in western Canada," said McMaster University's Catherine Connelly, who was recently awarded a four-year grant to study the program.
"If you look at unemployment rates among young Canadians or among people with disabilities â€” I really question some of the recruiting practices."
Follow Lee-Anne Goodman on Twitter at @leeanne25
HALIFAX - Premier Stephen McNeil said Thursday he intends to approach Ottawa about removing Nova Scotia's portion of the harmonized sales tax that is charged on top of the tax drivers pay for gas in his province.
With the province's regulated gas prices soaring, McNeil said he would like to give consumers a break at the pumps but the idea needs the backing of the federal government.
"We'll need to have some support at the national level because of course it means forgoing some tax on their part as well," McNeil said.
McNeil said he would also like to see the other Maritime provinces on board as that would make it easier for Ottawa to open up its HST agreements.
"When they open up that agreement, I'm sure they'll want to open it up once as opposed to opening it up three different times," he said.
He said he will raise the issue when the Atlantic premiers meet in Saint John, N.B., in May.
McNeil said while his government could use the revenue, he believes the tax on tax is unfair to consumers.
"All Nova Scotians by whatever measurement you would use would consider it not fair," he said, adding that removing the province's portion of HST on the gas tax would save Nova Scotia drivers about four cents per litre.
However, Finance Minister Diana Whalen said any HST savings could only be realized when the government tables a balanced budget, expected within three to four years.
"It would be really irresponsible to start rebating taxes or changing our tax system in a way that would just put us deeper in a hole," said Whalen.
She said she thinks it's a good idea to start the discussions on the gas tax now in order to signal where the province wants to go, but she warned any change will take time, given that other governments will likely have to agree.
"We are going to be doing our darndest to do that even faster if we can, but I've got to tell people it's a very big mountain to climb," she said.
Progressive Conservative Leader Jamie Baillie said the province's drivers are in need of relief now and the government should act immediately on a tax he says his "morally wrong."
He said until an agreement is in place the province should reduce its motive fuel tax by at least the amount collected in HST.
"I know the government defends the tax on tax because they need the money," said Baillie. "But if it's wrong, it's wrong."
The Finance Department said the province currently generates $250 million through its motive fuel tax and it estimated a cut to the provincial portion of the HST would be as high as $25 million.
TORONTO - The Toronto stock market closed higher Thursday amid positive earnings news and despite rising tensions between Russia and Ukraine.
Toronto's S&P/TSX composite index closed up 20.86 points at 14,554.25.
The Canadian dollar rose 0.03 of a cent to 90.68 cents US.
New York's Dow industrials was unchanged from Wednesday at 16,501.65 as traders took in positive earnings reports from General Motors and Caterpillar.
The Nasdaq gained 21.37 points to 4,148.34 after earnings from Facebook and Apple blew past expectations, while the S&P 500 index gained 3.22 points to 1,878.61.
In Canada, Potash Corporation of Saskatchewan Inc. (TSX:POT) posted quarterly net income of US$340 million or 40 cents a share, compared with 63 cents per share, or US$556 million, in the same period last year. The companyâ€™s guidance was for between 30 and 35 cents per share and its shares gained 67 cents or 1.75 per cent to C$39.02.
General Motors says first-quarter profit fell 86 per cent to $125 million or six cents a share as a string of recalls dragged down earnings. Excluding one-time items, GM made 29 cents per share, far above analyst estimates of three cents per share. GM shares lost early momentum to move down 20 cents to US$34.19.
Christian Mayes, an industrials analyst with Edward Jones, said the stock decline could be due to investor concerns about GM's U.S. market share, which could suffer because of the recalls.
Caterpillarâ€™s first-quarter earnings climbed five per cent to US$922 million, or $1.44 per share. Earnings totalled $1.61 per share, excluding restructuring costs. Total revenue was nearly flat at $13.24 billion. Analysts forecast earnings of $1.21 per share on $13.09 billion in revenue. Caterpillar shares were up $1.91 to $105.29.
"What it shows is domestically, (U.S.) economic growth was about two per cent last year, this year picking up somewhat and I think youâ€™re seeing this reflected at an early stage with some of the companies like Caterpillar that will be natural beneficiaries of this," said Bob Gorman, chief portfolio strategist at TD Waterhouse.
"It also reflects the fact that even though you have slower growth in China, it is slower growth, not a terribly hard landing."
Shares in Apple Inc. jumped 8.2 per cent to $567.77 after the company announced Wednesday that it was increasing its dividend by eight per cent to $3.29 per share and that it will buy back an additional US$30 billion of its stock. Quarterly earnings rose seven per cent to $10.2 billion, or $11.62 per share, while revenue climbed by five per cent to $45.6 billion. The company also will execute a seven-for-one stock split in early June.
After the close, Microsoft reported quarterly earnings per share of 68 cents, five cents better than estimates. Revenue of $20.4 billion narrowly beast expectations of $20.39 billion.
Trading was cautious after Russia's defence minister announced new military exercises in Russiaâ€™s south and west in reaction to mounting unrest in eastern Ukraine and NATO exercises in Poland. That development came just hours after Ukrainian troops killed at least two pro-Russia insurgents in eastern Ukraine, leading Russian President Vladimir Putin to threaten Kyiv with unspecified consequences.
Escalating tensions between Russia and Ukraine pushed June crude in New York up 50 cents to US$101.94 a barrel. The energy sector was down 0.63 per cent.
June gold bullion shed early losses to move up $6 to US$1,290.60 an ounce but the sector fell 1.7 per cent.
May copper ran up six cents to US$3.12 a pound and the base metals sector gained 0.57 per cent.
SAN FRANCISCO - Google, Apple, Intel and Adobe Systems have settled a class-action lawsuit alleging they conspired to prevent their engineers and other highly sought technology workers from getting better job offers from one another.
The agreement announced Thursday averts a Silicon Valley trial that threatened to expose the tactics deployed by billionaire executives such as late Apple Inc. CEO Steve Jobs and former Google Inc. CEO Eric Schmidt to corral less affluent employees working on a variety of products and online services. Had they lost, the companies also faced the prospect of paying as much as $9 billion.
The trial had been scheduled to begin May 27 in San Jose, Calif.
Terms of the settlement aren't being revealed yet. Those details will be provided in documents that will be filed in court by May 27, according to Kelly Dermody, an attorney representing the workers who contended they were cheated out of bigger paychecks.
"This is an excellent resolution," Dermody said in a prepared statement.
Robert Van Nest, an attorney who notified the court of the settlement on behalf of all the employers, declined to comment.
Google and Apple declined to comment, too.
Intel Corp. spokesman Chuck Mulloy said the chipmaker denies any wrongdoing, but chose to settle to "to avoid the risks, burdens and uncertainties of ongoing litigation."
Adobe System Corp. echoed Intel's remarks in its own statement. "We firmly believe that our recruiting policies have in no way diminished competition for talent in the marketplaces," the software maker said.
The suit, which grew out of an earlier Justice Department investigation, was seeking $3 billion in damages on behalf of 64,600 workers employed at some point from 2005 through 2009. Had damages been awarded in trial, they could have been tripled under antitrust laws forbidding U.S. companies from engaging in behaviour that suppresses a free market.
A $9 billion award would have translated into an average of nearly $140,000 per worker. Programmers, software developers and computer scientists make an average of $80,000 to $110,000 annually, depending on their specific duties, according to the latest wage data from the U.S. Department of Labor.
Some of the aggrieved employees in the class-action lawsuit worked at software maker Intuit Inc., and two filmmakers now owned by Walt Disney Co., Pixar Animation and Lucasfilm. Intuit, Pixar and Lucasfilm had previously negotiated a $20 million settlement of the claims against them. That settlement still needs court approval.
The 3-year-old case revolves around a "gentlemen's agreement" that the companies forged to retain employees. Internal emails excavated during the pre-trial proceedings showed Google, Apple and other major technology employers agreed not to recruit each other's workers to help protect their own interests.
The companies maintained that the "no-poaching" cartel wasn't illegal because they still could hire employees from their partners in the arrangement, as long as the workers initiated the inquiries about vacant positions.
But documents that had been surfacing in the case painted a more sordid picture. Google, in particular, seemed especially leery of approaching Apple employees for fear of infuriating the mercurial Jobs, who had warned the company not to raid his workforce.
At one point in 2006, Google sought Jobs' permission to hire a respected programmer, Jean-Marie Hullot, to run a new engineering office in Paris even though Hullot had already resigned from Apple, according to emails turned over in the case. Google also wanted to hire some other former Apple engineers that formerly worked with Hullot. After some email negotiations about what Hullot and his colleague would be working on at Google, Jobs wrote, "We'd strongly prefer that you not hire these guys." Google then backed off its Paris plans, according to emails.
In another instance, Schmidt fired a Google recruiter who riled Jobs by contacting an Apple employee about a job opening. After being informed of the firing, Jobs responded with a smiley face in an email.
Jobs died in October 2011 after a long battle with cancer. Attorneys representing the employers had been trying to limit how much evidence could be presented about Jobs' management philosophy, including statements he made to biographer Walter Isaacson, if the case had gone to trial.
Schmidt, a former Apple board member, ended a decade-long stint as Google's CEO in 2011, but remains the company's executive chairman. Earlier this year, Google awarded Schmidt restricted stock valued at $100 million to supplement a fortune estimated at $8.6 billion by Forbes magazine.
Google also attempted to persuade one of its former executives, Sheryl Sandberg, to join the no-poaching pact after she became Facebook's chief operating officer in 2008. Sandberg refused to play along and Facebook continued to recruit Google employees, according to a sworn deposition that she provided in the case.
The no-poaching agreement among the tech companies had also triggered a separate 2009 antitrust investigation by the U.S. Justice Department. That resulted in a 2010 settlement that requiring Google, Apple, Intel, Adobe Systems and several companies to scrap their no-poaching agreements. None of the companies acknowledged wrongdoing.
TORONTO - The Canadian dollar closed little changed Thursday amid comments from the governor of the Bank of Canada that Canadians should expect cheap borrowing costs to last for years even after the central bank gets around to hiking interest rates.
The loonie moved up 0.03 of a cent to 90.68 cents US as traders also digested a positive outlook for exports.
Stephen Poloz told a business group in Saskatoon that the Canadian economy has room to grow but even when it returns to full capacity, likely sometime in early 2016, it wonâ€™t take a big adjustment in interest rates to keep inflation in check.
The Bank of Canada has left its key rate at one per cent since September 2010.
Meanwhile, Export Development Canada says renewed strength in the United States and in emerging markets, along with a lower loonie, will trigger a rebound in the lagging export sector, particularly in automobiles, building materials and appliances.
EDC chief economist Peter Hall says the volume of shipments will likely start taking off in the second half of this year and expand to 5.8 per cent growth in 2015.
Hall says the pickup in exports might have happened sooner but for the U.S. government shutdown in October and the unusually harsh weather throughout the winter.
Oil and gold prices advanced amid rising tensions between Ukraine and Russia.
June crude in New York was up 50 cents to US$101.94 a barrel while June gold bullion advanced $6 to US$1,290.60 an ounce.
Trading was cautious after Russia's defence minister announced new military exercises in Russiaâ€™s south and west in reaction to mounting unrest in eastern Ukraine and NATO exercises in Poland. That development came just hours after Ukrainian troops killed at least two pro-Russia insurgents in eastern Ukraine, leading Russian President Vladimir Putin to threaten Kyiv with unspecified consequences.
May copper ran up six cents to US$3.12 a pound.
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