Stocks tumble after vote

Stocks are plunging in the U.S. and worldwide Friday after Britain voted to leave the European Union. The result stunned investors, who reacted by rushing to the safety of gold and U.S. government bonds as they wondered what will come next for Britain, Europe and the global economy.

U.S. stocks took far smaller losses than markets in Europe and Asia, but were still sharply lower in morning trading. The Dow Jones industrial average was down 378 points, or 2.1 per cent, to 17,631 as of 10:55 a.m. It was down as much as 538 points earlier

The S&P 500 is on pace for its biggest loss since January, down 48 points, or 2.3 per cent, to 2,064. The Nasdaq composite dropped 134 points, or 2.7 per cent, to 4,775.

Britons voted to leave the EU over concerns including immigration and regulation. It's far from clear what that will mean for international trade or for Europe, as the EU, which was formed in the decades following World War II, has never before lost a member state.

The vote brought a massive dose of uncertainty to financial markets, something investors loathe. Traders responded by dumping riskier assets that appeared to have the most to lose from disruptions in financial flows and trade: banks, technology companies and makers of basic materials.

The vote will start years of negotiations over Britain's trade, business and political links. Observers wonder if other nations will follow in Britain's footsteps by leaving the EU.

"This entire process is going to take a long time," said David Kelly, chief global strategist at JPMorgan Asset Management. "This is a negative in economic terms for the UK. The EU will be very tough negotiators with them."

Banks took the largest losses by far. Citigroup plummeted $3.61, or 8.1 per cent, to $40.85 and Bank of America fell 79 cents, or 5.6 per cent, to $13.25.

Technology stocks also took hefty losses. Microsoft fell $1.26, or 2.4 per cent, to $50.65 and IBM gave up $5.71, or 3.7 per cent, to $149.64.

Banks have the most to lose in Britain's departure from the EU as they do a lot of cross-border business in Europe based from their offices in London.

Safety assets soared. Gold jumped $51, or 4 per cent, to $1,315 an ounce. Newmont Mining rose the most in the S&P 500 index. It gained $2.08, or 5.9 per cent, to $37.47. The price of silver climbed 41 cents, or 2.4 per cent, to $17.77 an ounce.

Investors also bought utility company stocks and left phone companies basically unchanged while other parts of the market took big losses. Duke Energy rose 82 cents, or 1 per cent, to $82.87 and Consolidated Edison gained $1.45, or 1.9 per cent, to $78.31 while Verizon added 32 cents to $55.

The Federal Reserve said it is carefully monitoring financial markets and co-operating with central banks overseas.

Investors had sent stocks higher this week as they gradually grew more confident, based on polls and the changing odds in the betting market, that Britain would stay in the E.U. They sent the pound to its highest price of the year and sold bonds, pushing their yields higher.

Those gains were rapidly undone Friday as the euro tumbled and the pound plunged to a 31-year low, while bond yields hit some of their lowest levels of the year and gold surged to a two-year high.

Britain's FTSE 100 plunged as much as 8 per cent but recovered much of its losses later, falling 1.9 per cent. The German index sank 5.6 per cent and France's index tumbled 6.5 per cent.

The pound hit its lowest level since 1985 before recovering slightly to trade at $1.3648. That's still far below the $1.4808 it traded at late Thursday in New York.

Oil prices fell sharply. Benchmark U.S. crude lost $2.14, or 4.2 per cent, to $48 a barrel in New York. Brent crude, the international benchmark, fell $2.29, or 4.5 per cent, to $48.62 a barrel in London.

"This will be an act of economic self-harm with global ramifications," said Samuel Tombs, chief U.K. economist at Pantheon Macroeconomics.

It could also threaten London's position as one of the world's pre-eminent financial centres as professionals could lose the right to work across the EU. The U.K. hosts more headquarters of non-EU firms than Germany, France, Switzerland and the Netherlands put together.

The Bank of England said it had made contingency plans for a "leave" vote and promised to take action to maintain stability. It noted that it has 250 billion pounds ($342 billion) in liquidity available for banks. "We are well prepared for this," the bank's governor, Mark Carney, said in a televised statement.

Japan's Nikkei 225 finished the wild day down 7.9 per cent, its biggest loss since the global financial crisis in 2008. South Korea's Kospi sank 3.1 per cent, its worst day in four years. Hong Kong's Hang Seng index tumbled 4.4 per cent and stocks in Shanghai, Taiwan, Sydney, Mumbai and Southeast Asian countries were sharply lower.

In other currencies, the dollar fell to 102.16 yen from 104.47 yen while the euro weakened to $1.1117 from $1.1351.

Britain urged to go quickly

European Union nations urged Britain on Friday to quickly exit the bloc and end uncertainty about the future, as Prime Minister David Cameron said he would leave the departure negotiations to his successor, possibly until sometime in October.

Britain's vote to leave plunged the EU into a new existential crisis as it struggles to recover from economic woes, public disenchantment with Brussels-imposed austerity policies in debt-stricken Greece and Europe's inability to manage the refugee emergency.

"We cannot afford to wait until the Conservative Party will find a new leader," said Slovak Foreign Minister Miroslav Lajcak, whose country takes over the EU's presidency next week and will have to supervise preparations for Britain's departure.

Cameron's fellow Conservative and Britain's most prominent "leave" campaigner, Boris Johnson, said early Friday that "it is vital to stress that there is now no need for haste."

But Dutch Foreign Minister Bert Koenders, who an EU meeting in Luxembourg Friday to prepare next week's summit, said: "You can't have your cake and eat it."

"There is a clear plea from the majority of member states to speed this process up," he added.

Still reeling from the U.K. decision, and with the pound losing value while markets shook, other top EU officials tried to put on a brave face despite having no clear idea how to negotiate the unprecedented departure of a member state.

They also warned Britain that it would remain a member, with all the obligations that entails, until the talks on leaving are over, which could mean more than two years longer.

The heads of the EU's main institutions said in a statement that they want Britain to act on the vote "as soon as possible, however painful that process may be. Any delay would unnecessarily prolong uncertainty."

The statement was signed by European Council President Donald Tusk, European Commission President Jean-Claude Juncker, European Parliament President Martin Schulz and Dutch Prime Minister Mark Rutte, whose country currently holds the EU's rotating presidency.

They added that under the bloc's treaties "EU law continues to apply to the full to and in the United Kingdom until it is no longer a member."

Tusk told reporters that Britain's 27 partners were "determined to keep our unity." But, he said, "there's no way of predicting all the political consequences of this event."

He said EU leaders will meet without Cameron next week on the sidelines of a summit in Brussels "to start a wider reflection on the future of our Union."

While he admitted that the last year has been one of the toughest in EU history, Tusk said: "What doesn't kill you, makes you stronger."

Schulz announced that the European Parliament would hold an emergency session Tuesday morning, hours before a two-day summit of presidents and prime ministers, to debate the next steps.

As if Britain's departure wasn't bad enough, Cameron's resignation and decision to leave exit negotiations to his successor from October raised new worries about how long the process might drag on and possibly fuel the ambitions of others who might want to leave.

Once its intentions are officially notified, Britain would have two years to officially negotiate its departure, although London could be granted an extension if all 27 EU member states agree.

The head of the biggest bloc in the parliament fired an early warning shot, saying that Britain should expect no free ride as it negotiates its departure.

"There cannot be any special treatment for the United Kingdom. The British people have expressed their wish to leave the EU. Leave means leave. The times of cherry-picking are over," European Peoples Party leader Manfred Weber said.

He insisted that the exit negotiations "should be concluded within two years."

This insistence on a "hard exit" is aimed at discouraging other countries from wanting to leave the bloc in the belief that they might be able to negotiate a comfortable partnership from the outside.

Many European officials fear the U.K. vote will play into the hands of the far right and left and fuel calls for referendums in other countries.

The possibility to leave exists in the EU's rule book, but it's never been used before.

Whatever decisions are taken, the coming weeks and months will be frantic and uncertain, according to analysts.

"This summer will see the beginning of a tumultuous political crisis that will probably set many EU member states against one another, and will certainly reverberate around the world," warned Giles Merritt from the Friends of Europe think-tank .

From books to beer

Barnes & Noble is turning to an age-old partnership to help it revive its business: literature and alcohol.

The New York bookseller says it is opening four "concept" stores in the next year that will feature restaurants with an expanded menu including beer and wine.

The first concept store will open in Eastchester, New York, in October, followed by locations in Edina, Minnesota; Folsom, California, and Loudon, Virginia.

The company said Thursday that it had named its chief operating officer, Jaime Carey, to head a newly created restaurant division.

Barnes & Noble on Wednesday reported lower total sales and lower sales in established locations in its most recent quarter. The chain, which owns 640 bookstores nationwide, now offers pastries, sandwiches, Starbucks coffee and Wi-Fi in its cafes.


Loonie rises against pound

The Canadian dollar is down more than a cent and half against against the U.S. greenback as markets around the world come to terms with the Brexit vote, which puts Britain on a path towards exiting the European Union.

The loonie was at 76.66 cents US about 7:30 a.m. ET, down 1.64 cents, or 2.5 per cent, from Thursday's close, with two hours to go before North American stock markets open.

Meanwhile, the British pound plunged even more sharply against other currencies this morning, including the Canadian dollar.

The British pound was at lows that it hasn't seen since the mid-1980s.

It was down more than eight per cent compared with the U.S. dollar and about 6.5 per cent against the Canadian dollar. The pound was worth just under US$1.37 and just under C$1.79.

"Commodity prices (except for gold . . . ) are taking a hit from lowered prospects for global growth," BMO Capital Markets analyst Jennifer Lee wrote in a commentary.

August bullion contracts were at two-year highs — up $59.80 at one point to US$1,322.90, August crude contracts were down $2.37 at US$47.73 per barrel and July copper contracts fell 5.4 cents to just under US$2.11 a pound.

Signs were pointing to a big drop on the major U.S. and Canadian stock market indexes.

Dow Jones futures contracts were down 505 points or nearly three per cent to 17,410.0, S&P 500 futures dropped 74.50 points to 2,031.25 and the Nasdaq futures lost 158.25 points to 4,304.25.

Financial and resource stocks will likely set the tone for Canada's largest stock market once the Toronto Stock Exchange opens at 9:30 a.m. ET.

"Central banks will now move to damage control mode," a CIBC commentary predicted.

It says the Bank of England could cut its key interest rate as early as Sunday and "we might also see co-ordinated actions with other central banks to smooth currency movement."

A Scotiabank foreign-exchange commentary said there had been reports that central banks in Switzerland and Denmark had directly intervened to dampen currency fluctuations.

The S&P/TSX index closed on Thursday at 14,131.38, up 127.57 points or 0.91 per cent before it became clear that the Leave side had won the vote on Britain's place within the European Union.

A great place to work

Many companies claim to be tops when it comes to caring for their employees, but Bannister Honda in Vernon can back it up.

The North Okanagan auto dealership recently received the Better Business Bureau Employer of the Year honours.

The BBB serving Mainland B.C. handed out 11 Torch Awards to local businesses, including the inaugural Employer of the Year award to Bannister.

BBB’s Torch Awards began in 1997 as a way to recognize companies that make big strides in advancing ethics and trust in the marketplace. BBB serving Mainland B.C. has been taking part in the awards for the past nine years.

“Every year I get involved with this, I just feel so much pride for the businesses involved,” said Danielle Primrose, president and CEO of BBB serving Mainland B.C. “We have so many great businesses in BC who operate with integrity that it’s difficult to pick just one winner for these awards. We had a small army of judges pouring over dozens of applications. I am also proud of those who get involved on their own time to make this event a reality.”

This year BBB serving Mainland BC added another award category – Employer of the Year.

"We felt it was important to include this award," said Primrose. "It was a way to recognize businesses that put employee well-being at the same level as productivity and service."

Seeking a work-life balance

The work-life balance in European countries seems the stuff of dreams to many Canadians.

France has a 35-hour work week and recently gave employees the right to disconnect from email after they leave the office.

Sweden, meanwhile, offers workers a minimum five weeks paid vacation time.

And many Scandinavian companies have implemented a system of flexible hours and working from home as management encourages employees to craft schedules that fit their personal needs.

While Prime Minister Justin Trudeau managed to sneak a day off during a recent work trip abroad to celebrate his wedding anniversary, that kind of flexibility isn't afforded to most working Canadians despite work-life balance being a hot topic for years.

The Organization for Economic Co-operation and Development has found that average the Canadian works 1,704 hours annually, more than in Germany and Australia although less than those apparently tireless workers in the United States.

But as younger generations in Canada move into the workforce and demand more scheduling flexibility and clearer divisions between the office and home, companies will have to do more than just talk the talk and actually implement concrete policies to attract and keep talented workers, says one researcher who's studied the issue here for more than 20 years.

"Balance is not going to be an optional discussion point pretty soon," said Linda Duxbury, a professor at Carleton University's Sprott School of Business.

"To keep younger talent, you're going to have to deliver on it."

Employees crave a supportive work culture that enables a work-life balance, said Lidia Pawlikowski, a senior consultant of health and wellness at Morneau Shepell, a human resources consulting company founded by the father of Canada's current finance minister, Bill Morneau.

Workers want to take guilt-free lunch breaks, squeeze a workout into their day and not remain glued to their smartphones after hours, she said.

They seek work arrangements that allow them to get their work done, said Pawlikowski, but offer adequate time off and flexibility to care for any children or ailing elderly relatives in their lives.

That type of workplace culture is often discussed but rarely achieved, said Duxbury, who has co-authored two national surveys on work-life balance and is working on a third.

"All of the indicators are going the wrong way," she said.

Her 2012 study surveyed more than 25,000 full-time Canadian employees and discovered that employees' perception of work flexibility and management support remained relatively unchanged since her 2001 findings. In 2012, 27 per cent of respondents said they believed they had high flexibility, while 45 per cent acknowledged high managerial support.

But she says the data for her latest study, expected to be released in several months, is likely to show those numbers have dropped.

Many firms have no problem talking about balance, but are still too focused on evaluating employee productivity through hours worked, in-office presence and how tethered they are to their smartphones outside the office, she said.

Some companies are also imitating Silicon Valley firms and offering perks like catered meals and dry-cleaning services — but those types of initiatives actually erode work-life balance, Duxbury said.

"Their aim is to help people work more, not less," added Gerry Ledford, a senior research scientist at the University of South Carolina's Center for Effective Organizations, referring to those kinds of in-office perks.

Employers offer them so that their employees never need to leave the workplace and can work as close to 24/7 as they're willing, he said.

In the future, Duxbury said, companies that are failing to implement true work-life balance strategies will find themselves struggling to attract and retain talented workers.

Younger Canadians entering the labour force fear the type of workplace culture their parents endured and are demanding more flexibility from employers, she said. They'll also be more likely to grapple with the double whammy of not only raising children, but caring for their aging parents as the baby boomer demographic grows older.

And before long, Canada will be dealing with a shortage of workers, she said. By 2020, for example, there won't be enough qualified people to fill more than 218,000 new information and communication technology jobs in Canada, according to the Information and Communications Technology Council.

"I think that's when balance is finally going to start," Duxbury said. "They're going to start taking this issue seriously."

VW to pay nearly $10.2B

Volkswagen has agreed to take a series of steps with a total cost of about $10.2 billion to settle claims from its unprecedented diesel emissions cheating scandal in the U.S., two people briefed on the matter said Thursday.

Most of the money would go to compensate 482,000 owners of cars with 2-litre diesel engines that were programmed to turn on emissions controls during lab tests and turn them off while on the road, said the people, who asked not to be identified because a judge has issued a gag order in the case.

One of the people said the agreement was tentative and could change by the time the terms are officially announced by the judge on Tuesday. The bulk of the cash would be used to fix the cars, buy them back and compensate owners. Some funds would go to government agencies as penalties and for a program to remediate the environmental damage caused by pollution, the person said.

Owners would have a choice between selling their vehicles back to VW at the value before the scandal broke on Sept. 18, 2015, or keeping the cars and letting the company repair them. Either way, they would also get $1,000 to $7,000 depending on their cars' age, with an average payment of $5,000, one of the people said.

Attorneys representing owners, VW and government agencies including the Environmental Protection Agency have not yet agreed on the steps VW will take to repair the cars, the person said. Any fix would be expensive and likely would require a bigger catalytic converter or injection of the chemical urea into the exhaust to help neutralize the pollution.

The EPA has said the cars, which include many of VW's most popular models, can give off more than 40 times the legal limit of nitrogen oxide, which can cause respiratory problems in humans.

First $500M for CSeries

Bombardier Inc. and the Quebec government have reached a definitive agreement for the province to invest US$1 billion towards the CSeries passenger jet program.

The two sides have been working out details of the agreement since the plan was originally announced in October.

The Montreal-based company (TSX:BBD.B) says it expects to receive the money in two instalments of US$500 million each, with the first to be received by Bombardier on June 30 and the second on Sept. 1.

Bombardier says a final deal will be reached when certain customary conditions are met.

Once the Quebec government's investment is complete, it will own 49.5 per cent of a new limited partnership with all the assets, liabilities and obligations of the CSeries aircraft program.

The CSeries aircraft is two years behind schedule and has incurred about US$2 billion in cost overruns. The first planes are slated to enter into service with Swiss Airlines in July.

Premier Philippe Couillard has said Quebec's timely intervention in the CSeries commercial aircraft program was key for securing orders from Air Canada and Delta Air Lines.

Oilpatch adds up losses

Calgary oil and gas producer Long Run Exploration (TSX:LRE) was riding high two years ago.

Fuelled by US$100 per barrel crude prices, the company was committed to reaching "critical mass" by assembling lands in northwestern Alberta that would allow it to become a large, profitable intermediate that could boost production while paying a healthy dividend to investors.

On June 12, 2014, it announced the latest in a string of acquisitions, a $357-million deal to buy fellow Calgary producer Crocotta Energy Inc. It agreed to pay with shares and take on $115 million in debt.

A week later, on Friday, June 20, benchmark West Texas Intermediate closed at a near-nine-month high of US$107.26 per barrel as traders reacted to reports of a violent uprising in Iraq.

Unfortunately for Long Run, that peak marked the end of a five-year price rally. World crude prices then began a collapse that would take them as low as $27 per barrel in January of this year, resulting in a battered Canadian economy, thousands of laid-off workers in Western Canada and the pending forced sale of debt-laden Long Run Exploration.

"Everybody paid too much. Anybody who transacted in that six months (leading to June 2014) on a relatively large asset paid too much, including Long Run," said John Brussa, a Calgary lawyer who has served on the company's board for several years.

"If you bought something thinking oil was going to be $100 and the last two years it's probably averaged $40, can you just imagine? It's no different than buying real estate at the peak and then watching it crash."

In December, with pressure mounting from creditors, Long Run announced it would sell itself to a Chinese company for $100 million in cash plus the assumption of $679 million in debt. This week, it announced that the buyer, Calgary Sinoenergy Investment Corp., had won Investment Canada Act approval for the deal.

Dinara Millington, vice-president of research for the Calgary-based Canadian Energy Research Institute, says the cause of the oil price collapse was supply and demand.

"If you look at the numbers, it's pretty simple," she said. "We were just in a non-sustaining price environment where the prices supported the growth in supply; however, the demand growth was not there to absorb all of that incremental supply."

North American producers assumed that Saudi Arabia would reduce output to support prices. Instead, the world's largest producer and exporter of oil elected to accept lower prices to protect market share and put pressure on fast-growing U.S. shale oil and gas producers.

Despite the recent modest recovery in oil prices to around US$50 per barrel, CERI says a full recovery will take years. It predicts that the 2016 average WTI price will be just $45 per barrel, rising to $52 in 2017.

The weak oil price has weakened the Canadian dollar compared to the U.S. greenback and that's positive for trading of B.C. lumber and Ontario manufactured goods, Millington said.

"But the oil and gas industry is such a large contributor to the Canadian economy that, overall, if the prices sustain themselves at a low level, we will see a net negative impact despite some of the positive attributes of non-energy sectors," she said.

Tim McMillan, CEO of the Canadian Association of Petroleum Producers, said prices may eventually recover but the Canadian oilpatch won't go back to the way it was in 2014. He expects the industry to emerge as a much leaner version of itself thanks to cost controls and more efficient oilfield technologies it has had to employ to survive.

"If we look at the economics of the Canadian industry even in 2014, returns on capital investment were about two per cent," he said.

"That, I think, should have been a warning sign at the time that even though oil prices were close to $100 per barrel, the returns on investment that were being achieved in the oil and gas sector were poor. And probably weren't going to maintain a good amount of investment even at those prices."

CAPP says Canadian oil and gas investment over the past two years fell from $81 billion in 2014 to an estimated $31 billion this year — a drop of 62 per cent that was deeper than seen in the biggest previous oil price crash of 1986.

The association estimates that 110,000 direct and indirect jobs in Canada have been lost because of the current price crunch.

Brussa said the oil crash of 1986 caused a lot of pain in Calgary as investors lost money and employees lost their jobs. But it also sparked the creation of junior oil and gas companies and energy trusts as major producers sold Canadian assets.

Some of those tiny startups like Canadian Natural Resources (TSX:CNQ) grew up to be the majors of today.

"I think this is like 1986, but there's very little institutional memory of what 1986 was like," he said, adding he often tells younger people to keep their hopes up, based on his 35 years of experience as an oil and gas company director.

"You can't look at this like you're at the bottom of a well," said Brussa.

"You have to say, 'Yeah, this too will pass.' It's part of a cyclical business. You're going to get through this and then there will be something on the other side."

Macy's CEO to step down

Macy's, which has been struggling with weak sales, said Thursday that its longtime CEO Terry Lundgren will leave the job early next year.

He will be replaced by Macy's President Jeff Gennette.

The retailer, which operates about 870 department stores, has reported disappointing sales during the important holiday season and into spring. Last month, the Cincinnati company slashed its full-year profit and revenue outlook for the year.

Macy's said Lundgren will continue with the company as executive chairman. Lundgren, 64, has been CEO of the Cincinnati-based department store operator for about 13 years. Gennette, 55, has had several executive roles at Macy's, including chief merchandising officer and CEO of its stores in California, Nevada and other Western states.

Besides its namesake stores, Macy's also owns upscale department store Bloomingdales and makeup seller Bluemercury.

Shares of Macy's Inc. rose $1.12, or 3.4 per cent, to $33.93 in morning trading Thursday.

Car quality improving

Despite adding sophisticated electronic safety features and touch screens that once were prone to glitches, most automakers improved their reliability scores this year in an annual survey of new-car buyers.

The latest survey by the J.D. Power consulting firm determined that quality improved for 21 of 33 auto brands in the survey. This year's scores improved 6 per cent over 2015, double last year's increase and the biggest jump in seven years. And for the first time in 27 years, a brand for the masses led the pack as Kia edged out Porsche as the automaker with the fewest problems.

"It has become clear that automakers are listening to the customer, identifying pain points and are focused on continuous improvement," said Renee Stephens, vice-president of U.S. auto quality at J.D. Power.

Touch screens, voice recognition and Bluetooth technology have long been bugaboos for automakers, and for years they have brought down scores in the surveys. But last year automakers turned a corner, and this year they improved even more, Stephens said. The improvement in part is due to people getting used to new technology, but automakers also are simplifying the devices, taking out screens that seemed cool but were hard for users to grasp, she said.

The study also found that U.S. nameplates collectively scored better than foreign-based competitors for just the second time in the survey's 30-year history. And for the first time since 2006, mainstream brands had fewer problems than more expensive premium brands.

The 2016 survey of more than 80,000 car buyers from February through May found that Korea's Kia had the fewest problems per 100 vehicles at 83. It was closely followed by Porsche at 84, Hyundai at 92, Toyota wit 93 and BMW with 94. The survey asked owners about problems in the first 90 days of ownership.

The worst-performing brands were smart, Fiat, Volvo, Land Rover and Mini, according to the survey.

The average score for all brands was 105, seven problems fewer than last year. The Chrysler and Jeep brands, which for many years have been toward the bottom of the survey, showed the most improvement. Chrysler's problems fell from 143 to 114, boosting the brand from 31st place in 2015 to 20th this year. Jeep rose from 29th place to 18th, improving its problems per 100 vehicles from 141 to 113.

General Motors led all manufacturers with seven top finishers by segment, followed by Toyota with six.

GM's Chevrolet Spark led the city car segment, and the Buick Cascada convertible tied with the Scion tC for top sporty car. GM's Chevy Equinox and GMC Terrain tied for top compact SUV, and the Chevy Tahoe was the most reliable large SUV. Chevrolet's Silverado won in both the light duty and heavy duty large pickup categories.

The survey is the first major assessment of quality for 2016 vehicles, and it's closely watched by car shoppers. Consumer Reports magazine's influential quality study comes out in October and includes other years.

Among the findings from J.D. Power this year:

WINNERS AND LOSERS: Kia, which took top honours, had only 83 problems per 100 vehicles. Mercedes' smart minicar brand was last with 216 problems.

MOST IMPROVED: Chrysler and Jeep climbed 11 places each. Jeep finished 18th with 113 problems, while Chrysler finished 20th with 115 problems.

BIGGEST SLIDE: The Jaguar luxury brand plummeted 24 spots to 27th with 127 problems.

Stephens said that brands with the most revamped models tend to score lower, while those with older vehicles that were carried over into the new model year score higher.

Automated business loans

Scotiabank is pairing with online lender Kabbage to offer small business loans in the latest example of how traditional banks are working alongside so-called "fintech" startups to boost their digital offerings.

The partnership will allow Scotiabank (TSX:BNS) customers in Canada and Mexico to apply for small business loans of up to $100,000 using Kabbage's technology platform.

The service will be available — beginning in July in Canada and in Mexico in August — to existing Scotiabank small business customers who are not currently borrowing from the bank.

The bank also plans to expand the service to all Canadians by early next year, and also hopes to launch the offering in Colombia, Chile and Peru in the future.

Kabbage uses data analytics to determine a borrower's creditworthiness in minutes, removing the need to visit a bank branch, fill out paperwork and wait days for a decision.

Scotiabank had previously invested in Kabbage, which has its headquarters in Atlanta.

It's not the first time that one of the big Canadian banks has partnered with a financial technology upstart.

Late last year CIBC (TSX:CM) announced a partnership in the small business online lending space with Montreal-based Thinking Capital.

Others, such as the Bank of Montreal (TSX:BMO), have opted to build their own financial technology platforms in house.

Earlier this year, BMO launched an online portfolio manager, making it the first of the "Big Five" Canadian banks to get into the so-called "robo-adviser" business.

A report published by business consultancy firm EY earlier this year predicted that adoption rates of fintech offerings could triple this year, making it important for traditional banks to innovate or risk losing market share.

Industry insiders have predicted that banks will look to partner with existing fintech companies, rather than building their own systems from scratch.

"What we've found is that going to somebody who has already thought through the customer experience is a great way to get to market a lot faster," Jeff Marshall, head of Scotiabank's digital factory, said Wednesday.

Marshall said there is a team within Scotiabank's digital factory that is constantly scanning the fintech space looking for potential partners and acquisition targets.

"We're open for business as it relates to fintech and partnering with other companies," Marshall said.

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