Cruise lines start dropping COVID-19 vaccine requirements

Cruise mandates dropping

Cruise lines have announced plans to stop requiring passengers to show proof of being vaccinated before boarding ships in parts of the U.S. and Europe.

Canada, however, has so far not shown any indication that it will follow those countries by changing regulations to make it easier to board ships and industry insiders told BIV that they are unaware of any lobbying efforts to nudge Ottawa to do that. 

Royal Caribbean Cruises Ltd. (NYSE:RCL), Carnival Corp. (NYSE: CCL) and Norwegian Cruise Line Holdings Ltd. (NYSE:NCLH) said this week that they are dropping vaccination requirements for some sailings next month.

Norwegian was first out of the gate earlier this week when it posted a notice on its website saying that starting Sept. 3, it would not require passengers show proof of vaccination unless local laws required it.

Royal Caribbean then said that starting in September it will no longer require proof of vaccination on ships that depart ports in California, Louisiana, Texas, and any country in Europe.

Carnival-owned Princess Cruises said in a news release today that it will also remove vaccination requirements on "most voyages of less than 16 days" starting Sept. 6.

Princess Cruises said its rationale to end the vaccine requirements were to ensure that "anyone can cruise." It remains to be seen whether having fewer COVID-19 restrictions will attract more passengers than it repels.

"I suspect that it cuts both ways," said Cruise Lines International Association - North West & Canada (CLIA) spokesman Barry Penner.

He told BIV that ships on the Vancouver-to-Alaska run have been operating with considerably fewer passengers than pre-pandemic. In May and June, ships carried 283,762 passengers out of Vancouver, he said. That is down more than 29 per cent compared with 400,499 passengers in those months in 2019. 

"At the same time, we saw an increase in the number of ship calls," he said. "So we had actually more ship visits, but fewer passengers overall."

A similar trend was evident in Victoria, where there were 229,605 cruise passengers in May and June, compared with 264,071 passengers in those months in 2019 – a 13-per-cent drop. 

Investment in residential construction falls for first time in nine months: StatCan

Residential building dips

Statistics Canada says investment in residential construction declined for the first time in nine months in June, as gains in the non-residential sector helped push overall construction investment up 0.3 per cent to $20.8 billion.

The agency says residential construction investment fell 0.4 per cent to $15.5 billion in June, with Quebec being the biggest drag.

Within the residential segment, investment in single-family homes continued to show strength, rising 0.7 per cent to $8.6 billion, having outpaced multi-unit construction since the COVID-19 pandemic downturn.

Non-residential construction investment rebounded in June, increasing 2.4 per cent to $5.3 billion for the month, with commercial construction advancing 2.7 per cent to $3.0 billion, driven by Ontario.

Investment in commercial construction had fallen in May, the first time in 13 months, as a result of an Ontario construction workers strike.

Statistics Canada says the total value of investment in building construction rose 3.3 per cent to $62.3 billion in the second quarter, the third consecutive quarterly increase.

Telus wants to charge customers a fee for credit card payments

Charge for card payments?

Telus Corp. wants to pass on credit card fees to customers and plans to add a 1.5 per cent "processing fee" starting this fall.

In a letter to the Canadian Radio-television and Telecommunications Commission, the telecom giant says the surcharge is intended "to cover the processing costs that credit card payments incur" and would apply to current and future customers outside Quebec.

The document, which is dated Monday, seeks permission from the regulatory body to add the fee to its terms of service.

Telus competitors Bell, Rogers and Videotron did not respond to requests for comment.

In a statement to The Canadian Press, Telus says the average cost each month will be about $2 per customer, who can avoid the fees by selecting another bill payment option, such as debit payments or one-time bank payments.

Vancouver-based Telus says the fee will not apply in Quebec or to customers of its Koodo subsidiary.


Rogers, Shaw, Quebecor sign definitive agreement on planned sale of Freedom Mobile

Deal for Freedom Mobile

Rogers Communications Inc. and Shaw Communications Inc. have signed a definitive agreement with Quebecor Inc. that will see the Montreal-based telecom company acquire wireless carrier Freedom Mobile Inc.

Rogers will sell Shaw-owned Freedom to Videotron Ltd., which is owned by Quebecor, for $2.85 billion in a deal it hopes will appease the concerns of federal regulators about its proposed takeover of Shaw.

The parties say the agreement is consistent with the terms agreed upon on June 17 when the deal was first announced, and is subject to regulatory approvals and the closing of the merger of Rogers and Shaw.

Quebecor will buy all of Freedom's branded wireless and internet customers as well as all of Freedom’s infrastructure, spectrum and retail locations in a move that would expand Quebecor’s wireless operations nationally.

The parties say the combination of Freedom and Videotron will create a strong fourth national carrier and address the concerns raised by the Commissioner of Competition and the Minister of Innovation, Science and Industry regarding the Rogers-Shaw transaction.

The definitive agreement comes as Rogers continues to deal with the fallout from the July 8 service outage that impacted millions of Canadians for days.

Unifor calls for national auto strategy, dedicated ministry to capture EV potential

Unifor calls for auto strategy

Unifor is calling for a national auto strategy, and a dedicated federal government ministry to lead it, at a time of "significant and uncertain change" in the industry amid the transition to electric vehicles.

The recommendations are contained in Unifor's new auto policy released Thursday, a day after Canada's largest private-sector union elected Lana Payne as its new president, and come at what it calls an "inflection point" in the sector.

The union wants plant and production capacity targets as part of the overall auto strategy to help capture the potential of EVs, while it also calls for more government support through investment incentives and trade policies.

Ontario has already seen a wave of new, EV-focused auto investments in the last two years totalling upwards of $16 billion, but there needs to be a more comprehensive policy to keep the momentum going, said Payne on a conference call launching the policy.

"It's not enough to do as we've been going, we need something more fulsome, which is why we're putting forward this document."

Unifor's auto policy, the fourth in two decades, outlines 29 recommendations including the importance of building up capacity for battery materials and electric vehicle components, and providing transition support for auto parts suppliers and workers that could take a hit in the transition to electric vehicles.

The recommendations also include labour protections, diversity in hiring, and protections around Indigenous consent for mining activity.

Federal Labour Minister Seamus O'Regan said the government would take anything Unifor says seriously, but that numerous ministers are actively working the file together.

"This is actually a full-court press ... a lot of the co-ordination is called the cabinet table."

While Canada has seen electric vehicle investment commitments from several major automakers including Ford, GM, Stellantis and Honda, along with battery-related investments in Quebec, it is still the early days of the transition, said Rebekah Young, head of inclusion and resilience economics at Scotiabank.

"We have seen major investments, and they seem big because they're from nothing essentially ... when we look at the investments being made to the net zero transition, it really is just a drop in the bucket of what's needed."

Unifor's policy recommendations comes as the U.S. moves toward passage of the Inflation Reduction Act that will see billions of dollars devoted to EV subsidies that are expected to boost demand for zero emission vehicles and benefit the highly integrated North American auto market.

For Canada, one of the most significant aspects of the bill is what's not in it, as the U.S. has removed a provision that only vehicles manufactured in the U.S. would see the subsidies.

The spending bill as it stands will help avoid fights over market share in North America so that the region can catch up with other markets on EVs, said Young.

“North America is at least a decade, if not more, behind Europe and China in this space, and so, things like the cost, the number of models and makes.”

Canada also has its own incentives for electric vehicles, but Unifor is calling to boost those, as well as the introduction of a trade-in rebate program and increased spending on a charging network to boost demand.

A survey from EY released in June showed that 46 per cent of Canadian respondents who planned to buy a car will choose an EV, up 11 per cent from its 2021 survey, while concerns around limited charging stations and home charging infrastructure were the biggest barriers to adoption.

Takeover bid targets parent company of Vancouver’s Seaspan Corp.

Takeover bid targets Seaspan

A consortium that includes the world's sixth largest maritime container shipping company wants to take over the parent company of Vancouver-based Seaspan, the world’s largest lessor of container ships.

Poseidon Acquisition Corp.’s August 4 takeover bid includes a 30 per cent premium over Atlas Corp.’s share price prior to the announcement.

News of the bid to take Atlas private boosted the asset manager’s stock price 22.9 per cent. Atlas stock was trading at US$14 as of August 11.

Seaspan generates the bulk of revenue for Atlas, which has a market cap of approximately US$3.5 billion.

Bing Chen, president and CEO of Atlas, referenced the takeover bid at the outset of the company’s 2022 second-quarter earnings call, but would say only that “we cannot comment on the proposal.”

In a statement, Atlas cautioned that it “has only recently received the proposal letter and has not had an opportunity to carefully review and evaluate the proposal or make any decision with respect to Atlas response to the proposal.”

The Poseidon consortium includes David Sokol, the chairman of the Atlas board of directors; affiliates of the Washington family; affiliates of Fairfax Financial Holdings; and Ocean Network Express.

Together, they own more than 50 per cent of Atlas’ outstanding common shares.

The target of the takeover bid continues to post impressive numbers, especially when it comes to Seaspan’s contribution.

Second-quarter revenue for Atlas was US$413 million, which was up 4.9 per cent from the same quarter in 2021. Net income was up 2.6 per cent to US$279.5 million; US$252.4 million of that income was generated by Seaspan.

Atlas subsidiary APR Energy, the world’s largest mobile gas turbine fleet owner and operator, generated US$27 million in the quarter.

Seaspan’s operating containership fleet has grown to 134 from zero in 2001. It also has 67 ships under construction and will have an operating fleet of 201 ships with a total carrying capacity of 1.95 million 20-foot equivalent units (TEUs) when Seaspan’s newbuilds are delivered.

It celebrated its 20th anniversary late last year with third-quarter financials that included profit up 31 per cent to US$256 million compared with the same quarter in 2020.

In an August 4 Securities and Exchange Commission filing, Sokol stated that “the Consortium believes the proposed transaction will provide Atlas’s common shareholders with immediate liquidity and certainty of value at a significant premium to the current share price, while allowing Atlas to focus on the long term without the emphasis on short-term results and providing Atlas with an ideal strategic partner to support its future growth.”

BRP operations remain frozen more than two days after cyberattack

Cyberattack freezes BRP

Sea-Doo maker BRP Inc. says work at its factories remains at a standstill following a cyberattack it reported Monday.

Spokeswoman Biliana Necheva says in an email operations have not resumed more than 48 hours after they were halted as a cautionary measure.

The Quebec-based company, which manufactures Ski-Doos and off-road vehicles, announced Monday morning it was the target of "malicious cybersecurity activity" and took "immediate measures to contain the situation."

Deploying its own information technology staff, BRP also said it hired cybersecurity experts to help secure its systems and support an internal investigation.

The company said its freeze on operations could delay some transactions with customers and suppliers.

It comes at a tough time for BRP, as supply chain woes weighed on sales in its first quarter, with more input obstacles expected on the powersport vehicle maker's path for the rest of the year.

Spun off from Bombardier Inc. in 2003, BRP employs nearly 20,000 workers, mainly at manufacturing and distribution sites in Mexico, Canada, Austria, the United States, Finland and Australia. Its products are sold in more than 120 countries.

Rising interest rates making GICs more attractive for investors

GICs gaining ground

Rising interest rates might be bad news for Canadians with mortgages, but it also means higher rates on savings vehicles such as guaranteed investment certificates (GICs), prompting renewed interest in the investments.

Mahima Poddar, senior vice-president and group head of personal banking at Equitable Bank, said GICs haven't been popular in recent years, but with the rise in rates they are now more attractive and demand at EQ Bank, the bank's digital platform, has never been higher.

“I do think we're going to see more and more people going back to GICs,” she said.

According to rate-watching website Ratehub.ca, rates for GICs are now north of four per cent, with some offerings for five-year investments reaching five per cent.

And while the annual pace of inflation is outpacing the rates being offered by GICs, the guaranteed nature of the investment may be appealing for investors burned by the downturn in the markets this year.

"When you compare that to a guaranteed five per cent rate with no downside risk, it becomes incredibly attractive," Poddar said.

Naveen Senthamilselvan, director of strategic initiatives at Meridian Credit Union, said GICs in the spring of last year were sitting at one to 1.5 per cent, while today they are paying four to five per cent.

However, he said it is still important to work with an adviser to make sure you have the right option because GICs can vary as to how easily you can access the money and your rate of return.

"That's what you really need to understand and speak to your adviser about. What are my options and what really suits your needs as an investor. Do you need the money in six months, do you need that flexibility. Are you OK putting a portion of your GIC into a fixed non-redeemable for a longer term," he said.

"You want to be informed when you're making that final decision."

Depending on what you choose, they can be cashable or non-redeemable for a term that you decide on, with redeemable options generally paying a lower interest rate. The length of the term can also vary, with longer term options generally offering higher interest rates. Payout schedules for the interest can also differ between offerings.

Senthamilselvan said a lot of investors are looking at a laddered strategy that has a portion of their money in GICs reaching maturity each year giving them the option to reinvest or reallocate some of their overall investment each year.

Aarash Rafiaie, a financial planner at RBC, said it is important to understand what you need the money for because that will guide how the money should be invested.

"I think the majority of Canadians need to plan more now than they probably did in the past, especially since we’re seeing volatility in not only equity markets but also interest rate," he said.

Rafiaie said GICs can be a great source of secure income, but depending on the option they may not be redeemed as easily if you need the cash when you compare them to a bond or a dividend paying stock. However, he added that GICs are more secure than bonds or stocks, which can fluctuate with the market.

"There tends to be more volatility in equity-based investments in general and even in bonds than there would be in the GIC world because you have a set rate, a set time frame, you know and that's it, but the risk could be that you might not beat inflation," he said.

Poddar added that it is important to shop around when looking for a GIC because the rates will vary between institutions and to stay on top of them as they come up for renewal to ensure you are always getting the best rate available.

"You will see quite a big variance in rate," she said.

Cineplex posts strongest quarterly results since COVID-19 pandemic began

Best results since COVID

Cineplex Inc. says it generated positive net income for the first time since the start of the pandemic.

The movie theatre company says net income amounted to $1.3 million or two cents per share for the quarter ended June 30 compared with a loss of $103.7 million or $1.64 per share a year earlier.

Revenue totalled $349.9 million, up from $64.9 million the prior year.

Cineplex says theatre attendance in the quarter totalled 11.1 million compared with 1.1 million in the same quarter last year when it was still facing pandemic-related restrictions.

Box office revenue per patron was $12.29 in the second quarter, compared with $10.89 a year ago, while concession revenue per patron was $8.84, up from $7.86 in the same quarter last year.

Top Gun: Maverick, Doctor Strange in the Multiverse of Madness and Jurassic World Dominion were Cineplex's top films in the quarter and CEO Ellis Jacob said in a release that the cumulative success of these films "is a testament to the fact that when strong film product is available, Canadians return to (the company's) theatres in droves."

Canada Pension Plan Investment Board loses 4.2% in market downturn

CPP fund loses 4.2%

The Canada Pension Plan Investment Board says its fund, which includes the combination of the base CPP and additional CPP accounts, lost 4.2 per cent in its latest quarter.

CPPIB ended the quarter with net assets of $523 billion, compared to $539 billion at the end of the previous quarter.

The board says the $16 billion decrease in net assets for the quarter consisted of a net loss of $23 billion and $7 billion in net transfers from the Canada Pension Plan.

The board says the fund's quarterly results were driven by losses in public equity strategies, due to the broad decline in global equity markets.

It also says investments in private equity, credit and real estate contributed modestly to the losses this quarter.

CPPIB CEO John Graham says he expects "turbulence" in the business and investment environment to persist throughout the fiscal year.

Canadian Tire Corp. Ltd. reports second-quarter profit fell from a year ago

Canadian Tire profit falls

Canadian Tire Corp. Ltd. is reporting lower second-quarter profit compared to a year ago.

The retailer reported its net income attributable to shareholders totalled $145.2 million or $2.43 per diluted share for the quarter, down from $223.6 million or $3.64 per diluted share a year earlier.

Canadian Tire says retail sales rose 9.9 per cent and comparable sales, excluding petroleum, gained 5.0 per cent. Retail sales at its SportChek banner grew 0.6 per cent as comparable sales gained 4.1 per cent, and retail sales at its Mark's banner rose 21.1 per cent as comparable sales rose 20.9 per cent.

On a normalized basis, Canadian Tire says it earned $3.11 per diluted share, down from a normalized profit of $3.72 per diluted share a year earlier.

The company says while the performance of the retail segment of the business remains significantly above pre-pandemic levels on a normalized basis, higher expenses including foreign exchange resulted in earnings coming in lower in the second quarter compared to the prior year.

Canadian Tire also says its financial services revenue grew 15.0 per cent, driven by growth in receivables and growth in credit card sales, due to increased customer activity and new account acquisitions.

US gas prices dip below $4 a gallon for first time in 5 months

US gas prices dip

Gasoline prices dipped to just under the $4 mark in the U.S. for the first time in more than five months — good news for consumers who are struggling with high prices for many other essentials.

AAA said the national average for a gallon of regular was $3.99 on Thursday.

Prices have dropped 15 cents in the past week and 68 cents in the last month, according to the auto club.

The shopping app GasBuddy reported that the national average was already down to $3.98 on Wednesday.

Falling prices for gas, airline tickets and clothes are giving consumers a bit of relief, although inflation is still close to a four-decade high.

Oil prices began rising in mid-2020 as economies recovered from the initial shock of the pandemic. They rose again when the U.S. and allies announced sanctions against Russian oil over Russia's war against Ukraine.

Recently, however, oil prices have dropped on concern about slowing economic growth around the world. U.S. benchmark crude oil has recently dipped close to $90 a barrel from over $120 a barrel in June.

High prices also may be causing U.S. motorists to drive less. Gasoline demand in early August was down 3.3% from the same week last year after tracking more closely to 2021 numbers earlier in the summer.

Prices at the pump are likely to be a major issue heading into the mid-term elections in November.

Republicans blame President Joe Biden for the high gasoline prices, seizing on his decisions to cancel a permit for a major pipeline and suspend new oil and gas leases on federal lands.

Biden said over the weekend that a family with two cars is saving $100 a month because prices have dropped from their peak in mid-June.

“That's breathing room,” he tweeted. “And we're not letting up any time soon.”

Biden has also sparred with oil companies, accusing them of not producing as much oil and gasoline as they could while posting huge profits. “Exxon made more money than God this year,” he said in June.

Exxon said it has increased oil production. The CEO of Chevron said Biden was trying to vilify his industry.

The nationwide average for gas hasn't been under $4 since early March. Prices topped out at $5.02 a gallon on June 14, according to AAA. They declined slowly the rest of June, then began dropping more rapidly.

Motorists in California and Hawaii are still paying above $5, and other states in the West are paying close to that. The cheapest gas is in Texas and several other states in the South and Midwest.

A year ago, the nationwide average price was around $3.20 a gallon.

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