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Hertz, Thrifty fined $1.25M

Car rental companies Hertz Canada Ltd. and Dollar Thrifty Automotive Group Canada Inc. have agreed to pay a total of $1.25 million in penalties following an investigation into their advertising by the federal Competition Bureau.

The law enforcement agency said Hertz and Dollar Thrifty were advertising prices that were unattainable because of mandatory fees that were systematically added to a customer's bill.

The bureau said the additional fees could increase the final price by as much as 10 to 57 per cent.

The agency also said some of the fees were described in a way that implied that they were mandatory taxes or surcharges imposed by various governments when they were not.

In addition to the monetary penalty, Hertz and Dollar Thrifty have agreed to implement a program to improve their procedures, the bureau said.

However, the settlement did not contain any admission of wrongdoing by the companies.

Hertz Global Holdings Inc., the corporate parent of both companies, said that before the investigation it had no records of complaints about the issue from Canadian customers.

"Hertz's practice in respect of prices, fees and discounts has long been consistent with industry practice, however we have co-operated with CCB in agreeing to make the required pricing and disclosure changes," the company said in a statement.

Last year, car rental companies Avis and Budget agreed to pay $3 million in penalties plus $250,000 towards the bureau's investigative costs to resolve similar concerns over unattainable prices due to additional mandatory fees.



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S8 more prone to cracks

Samsung's latest phones feature big wraparound screens and lots of glass. SquareTrade, a company that sells gadget-repair plans, says the phones also appear to break more easily.

The nearly all-glass design of Samsung's Galaxy S8 and S8 Plus makes them beautiful, SquareTrade says, but also "extremely susceptible to cracking when dropped from any angle."

Samsung didn't immediately respond to a request for comment.

The new phones have received positive reviews from The Associated Press and other outlets.

Samsung says advanced orders for the S8 were 30 per cent higher than that for the Galaxy S7 phones. The company didn't release specific figures.



Have your say on pay?

Regulators should make public companies hold a vote on the pay packages of top executives, say investors advocates, with compensation expected to be a major issue at the annual general meetings of some of Canada's biggest corporations this year.

Canadian shareholders typically head to annual meetings in April and May, where some but not all companies give them a say on executive pay through advisory motions. While the motions are non-binding, they can be uncomfortable for highly paid CEOs and spur corporate boards to review compensation.

The issue was highlighted on Thursday when TransAlta Corp. shareholders voted down the power plant owner's executive pay plan, under which chief executive Dawn Farrell received a special one-time payment for "extraordinary leadership" as part of her $7.39 million in total compensation.

"Say-on-pay votes now should be the norm in Canada. They're not," said Kevin Thomas, director of shareholder engagement at the Shareholder Association for Research and Education.

Stephen Erlichman, executive director at the Canadian Coalition for Good Governance, which has long advocated for mandatory say-on-pay shareholder votes, says Canada has become an outlier in the world with many other countries already requiring them.

Among those to watch this year will be a pair of corporate Canada's biggest names — Bombardier and Canadian Pacific Railway — when their shareholders meet in May.

There were 177 Canadian companies that held a say-on-pay vote last year compared with 157 in 2015 and 28 in 2010, according to shareholder services and advisory firm Kingsdale Advisors.



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Opening shot in lumber war

The opening shot in a fifth softwood-lumber war between the United States and Canada is expected this week, and policy-makers north of the border are preparing to calculate the potential damage of American duties.

The U.S. Commerce Department is likely to announce Tuesday the first of two anticipated duties on Canadian softwood, which would be applied on Canadian imports as they were in disputes in the 1980s, 1990s, and early 2000s.

Canada's central bank cited in its latest policy review uncertainty in lumber as a reason behind increased prices, and a slowdown in shipments; its governor said Saturday the impact would become easier to gauge after the specifics of duties became known.

"If there's going to be some sort of countervailing duty that raises the price of Canadian lumber — chances are that's going to cause lower exports. It would make U.S. lumber more competitive, relatively speaking," Bank of Canada governor Stephen Poloz told reporters during international financial meetings in Washington.

"It is an important business for Canada. It's got a lot of employment in it. It's geographically diverse. So it matters."

Lumber isn't the only Canadian industry bracing for potential U.S. action. President Donald Trump has complained about that industry, plus dairy, and energy. Next week, Trump will release his proposals for tax reform — it's not yet clear whether he will favour a kind of import tax.

As for the value of potential softwood duties, an analyst at RBC Capital Markets, Paul Quinn, said recently he anticipates a "shock and awe" move with duties in the range of 30 to 40 per cent.

The root of the recurring softwood disputes stems from the U.S. industry's contention that Canada unfairly subsidizes its lumber by providing cheap access to public land. It's led to a cycle of American punitive action, followed by trade cases mostly won by Canada, and then a compromise settlement.



Miss Vickie's recalled

Miss Vickie's is voluntarily recalling its jalapeno-flavoured kettle cooked potato chips due to the potential presence of salmonella in the seasoning used in the product.

The company says the recall is the result of a supplier's recent recall of a seasoning blend which includes jalapeno powder that could contain salmonella.

The company says no salmonella was found in the seasoning supplied to Miss Vickie's, but it decided out of an abundance of caution to recall the product.

The recall covers only jalapeno-flavoured Miss Vickie's kettle cooked potato chips with "Guaranteed Fresh" dates of June 20 or earlier in 40-gram bags with UPC code 060410001769, 66-gram bags with UPC 060410017142, and 220-gram bags with UPC 060410066386.

Salmonella is a bacterium that can cause diarrhea, fever and abdominal cramps, but the company says no illnesses related to the seasoning have been reported.

The company is working with the Canadian Food Inspection Agency to ensure the products are removed from the marketplace and no longer distributed.



Why Trump's in a hurry

If Donald Trump sounds like he's in a hurry to start renegotiating NAFTA, it's because he is. He says so. The president's team even admits a major reason for the urgency, which can be summed up in four words and they're not Canadian dairy, energy, or lumber.

They are: Andres Manuel Lopez Obrador.

In one year, Mexico will be deep into campaign mode. And the current poll leader is a fiery left-wing nationalist whose party website has listed, as its very top item, the story of how he filed a human-rights complaint last month against Trump.

This creates some pressure for Trump to get a deal soon or sleepwalk into a minefield of inhospitable options: negotiating in the dying days of the Mexican election, waiting to deal with the next president, possibly Lopez Obrador, or break his promise to revisit NAFTA.

The longtime Mexican politician and three-time presidential candidate, nicknamed AMLO, was in Washington last month to announce his complaint with the Inter-American Commission on Human Rights about Trump's treatment of migrants, and his plans for a border wall.

He called it embarrassing to see the current Mexican government prostrate before Trump.

"We do not want a relationship of subordination. We will not accept it. Mexico is a free, independent country — not a colony, nor a protectorate," he told a Washington news conference.

"Never will we subordinate ourselves to any foreign government."

Trump's team has made it abundantly clear they would rather deal with NAFTA before that candidate starts delivering that message, every day, to cheering crowds, on the campaign stump. The election is next July.



Oil prices fall below US$50

Oil prices dropped below US$50 a barrel for the first time in more than three weeks, while North American stock indexes dipped slightly ahead of the first round of the French presidential election.

The June crude oil contract shed $1.09 to US$49.62 per barrel after reaching a low of US$49.20 earlier in the day. The last time the commodity dipped below the US$50 mark was March 29 when it fell to US$49.51.

However, the day's fall in price didn't drag down the Toronto Stock Exchange's S&P/TSX composite index much — it fell 11.08 points to 15,614.48, with the energy sector leading advancers as oil and gas stocks gained an average of 0.73 per cent.

Part of the energy sector's performance can be attributed to a depreciating Canadian dollar, which slipped 0.18 of a U.S. cent to 74.05 cents US.

Patrick Blais, a senior portfolio manager at Manulife Asset Management, said a low loonie acts as "sort of a natural hedge," meaning companies are getting more Canadian dollars per barrel, which are priced in U.S. dollars.

"That said, if the oil price persists below 50, we'll probably see Canadian oil stocks pull back," he said.

In New York, the Dow Jones industrial average lost 30.95 points to 20,547.76, the S&P 500 index declined 7.15 points to 2,348.69, and the Nasdaq composite index dropped 6.26 points to 5,910.52.

While there's not much movement in the markets, there's a lot of fretting over geopolitics, said Blais.

He pointed to France where citizens head to the polls Sunday for the first round in the country's presidential elections as an example. One of the top two candidates, National Front representative Marine Le Pen, is calling for France to leave the European Union and the Euro currency behind should she win.

"You could very well get a fairly strong relief rally on Monday depending on the outcome as well as depending on how the market assesses the outcome," said Blais.

Elsewhere in commodities, the June gold contract rose $5.30 cents to US$1,289.10 an ounce, the May natural gas contract fell 5.8 cents to US$3.10 per mmBTU, and the May copper contract gave up about half a cent to roughly US$2.54 a pound.



Cenovus accelerates drilling

The CEO of Cenovus Energy (TSX:CVE) says his company plans to accelerate drilling of conventional gas wells on lands it's buying from ConocoPhillips through a $17.7-billion deal announced last month.

Brian Ferguson says the Calgary-based company will increase spending to $650 million in 2019 to drill about 120 wells on the land in northeastern B.C. and northwestern Alberta.

That's more than five times higher than ConocoPhillips' plan to spend $120 million this year to drill 24 wells.

Ferguson says the drilling will bring on new production to better utilize ConocoPhillips gas plants and pipelines that are only being employed at about 40 per cent of capacity, thus improving the economic return on the play.

He says spending is expected to climb this year to $170 million and next year to $350 million.

The deal, expected to close before June 30, also includes ConocoPhillips' 50 per cent interest in an oilsands venture between the two companies in northern Alberta.



Island doesn't want Uber

Twelve miles and a ferry ride from the New England shore, Block Island is one of the last major tourist destinations in the United States without Uber or Lyft — and islanders want it to stay that way.

Come summer, the sleepy island welcomes thousands of vacationers, many of whom depend on taxis to get to its bluffs, lighthouses, beaches and weathered-grey shingle homes. Now, as at least one ride-hailing company proposes to deregulate the community's strict 88-year-old taxi code, longtime drivers are fighting to protect a way of life that helps them make ends meet in a place where the median home costs $1.2 million.

"This is our livelihood," said taxi driver Champlin Starr, a retired oil tanker captain whose family first landed here in the 1660s. "People come to Block Island because they want an experience. They're not going to get it with someone who doesn't know where the landmarks are. This is our home."

With 32 licensed taxis, each with up to four drivers, Starr said, nearly 10 per cent of the island's roughly 1,000 year-round residents spend part of the summer driving fares around. The school's principal is a taxi proprietor. So is the retired police chief.

But some residents say they could use some competition, especially to attract younger tourists accustomed to the convenience of using apps.

"My guests are always complaining about how expensive the taxis are, how fast their drivers are driving," said Emma Rose Tripler, a lifelong resident who manages two inns. "They're cranky, on top of it. And some of them are pretty aggressive."

The town of New Shoreham, which encompasses the island, has been setting its own taxi rates since 1929. Its rules include a surcharge for dirt roads and a requirement that someone vouch for a driver's moral character. The average wait to get a taxi license is 15 years.

"I'm a retiree and a widow," said Fran Migliaccio, owner of Mig's Rig Taxi. "It's my sole source of income." Migliaccio said that she's not proposing to ban Uber and Lyft, but that their drivers should be "subject to the same level of scrutiny" as everyone else on the taxi waitlist.

Rhode Island enacted a statewide law last year to formally legalize and regulate Uber and Lyft, but Block Island residents are now pushing for an exemption.

"What Uber and Lyft are going to do is come out for two months, skim all the cream off the top and leave," said state Rep. Blake Filippi, a Block Island Republican who proposed the exemption, to which both San Francisco companies object.

So far, the debate is just theoretical. Uber and Lyft don't appear to be operating there yet.



Food less as inflation slows

The country's annual inflation rate slowed to an unexpectedly weak 1.6 per cent last month as the continued decline in food prices played a big role in offsetting the higher cost of gasoline, Statistics Canada said Friday.

The agency's latest reading shows the pace of inflation decelerated from February's year-over-year reading of two per cent, which was right on the Bank of Canada's ideal target. In B.C., the inflation rate was 2.0 per cent, down from 2.3 per cent a month earlier.

A consensus of economists had predicted 1.8 per cent inflation for March, according to Thomson Reuters.

Statistics Canada's consumer price index shows some of the biggest downward forces on inflation were lower prices for clothing and footwear, which declined 0.9 per cent, and food, which fell 1.9 per cent.

A closer look at the data shows that, compared to a year earlier, the cost of fresh fruit dropped 12.4 per cent while fresh vegetable prices fell 10.2 per cent. The report says year-over-year food prices fell 1.9 per cent in March — a sixth-straight monthly decline.

Meanwhile, gas prices increased 15.2 per cent last month.

 



Eyeing China for softwood

As Donald Trump added softwood lumber to his anti-Canada trade rhetoric Thursday, Trade Minister Francois-Philippe Champagne was on his way to China with an entourage of industry representatives looking for an alternative to the U.S. market.

One senior government official who spoke on the condition of anonymity characterized one portion of the visit as a "trade-mission oriented trip on softwood." New Brunswick, Quebec, British Columbia and Ontario producers were all represented.

"For all sorts of reasons, we're striking while the opportunity is ripe, to showcase, to take companies with us to promote them," said the official, who wasn't authorized to publicly discuss details of the trip.

Estimates of how much of Canada's softwood lumber is shipped to the U.S. are as high as 70 per cent, but the Trudeau government has placed a priority on finding new trade markets in Asia — especially China — for a variety of goods and services.

Indeed, Canada's softwood industry makes no secret of its own search for opportunities in China.

Canada Wood, an industry trade group, said earlier this month it would "take the first steps to extend its reach to Wuhan, which is the economic engine of central China," by establishing a joint Sino-Canadian Modern Wood Construction Technology Center in the little-known Chinese city of more than 10 million.

"Canada Wood China is vying for a piece of China's $44-billion hotel industry by promoting low-density, wood-frame hotels to the Chinese hotel industry," the organization's website added.

While exploratory talks on a Canada-China free trade deal between government officials take place in Ottawa next week, the first round of a high-level economic and financial dialogue will unfold in Beijing.

Champagne will be joined by Finance Minister Bill Morneau; their Chinese counterpart will be Vice Premier Wang Yang, who is also China's point man on relations with the United States.

Softwood lumber is a long-standing irritant between Canada and the U.S. The two sides are working on a new agreement to replace the nine-year truce that expired in 2015.

The U.S. Commerce Department is expected to decide by Tuesday whether to impose duties on Canadian softwood, which American producers say is overly subsidized and unfairly floods their market.



Spending more than ever

More people are spending more money in Canada this year, but it appears growth in the country will continue its gradually slowing trend in 2017.

According to the MonerisMetrics' quarterly report, spending in Canada was up by 3.46 per cent in the first quarter of this year, compared to 2016.

That jump, however, is smaller than the one from 2015 to 2016, which was itself smaller than the year before.

“Spending rates are continuing to climb, but at a more modest level than in previous quarters,” CEO Angela Brown said. “Given global transitions in government that could impact the economy at home, it’s no surprise that Canadians are keeping an eye on how they’re spending.”  

The report contains a nugget of good news for B.C., however, as the province posted stronger-than-average growth over the first quarter, compared to most provinces.

At 4.26 per cent growth, B.C.’s numbers were only behind those of Quebec and New Brunswick (at 5.49 per cent and 4.59 per cent respectively).

Although it’s not rising as fast, spending is still up in Canada this quarter, and Moneris sees a couple of trends driving the growth.

The majority of transactions (64.8 per cent) over the period of the report were made with a credit card, and a significant chunk (35.2 per cent) were made on debit cards.

Spending on credit cards increased by 4.85 per cent over the first quarter of 2016, while spending on debit increased by a slightly smaller volume, at 0.98 per cent.

Canada’s low dollar also drove lots more foreign spenders to drop dollars in the country. 

The amount spent on foreign cards in Canada grew by 6.06 per cent over the same period last year, as Canada remains a desirable destination for cross-border shopping and tourism. 



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