Sunday, September 21st9.6°C
23284

SpaceX launches fresh space station supplies, including first 3-D printer bound for orbit

CAPE CANAVERAL, Fla. - A SpaceX cargo ship rocketed toward the International Space Station on Sunday, carrying the first 3-D printer for astronauts in orbit.

In all, the unmanned Dragon capsule is delivering more than 5,000 pounds of space station supplies for NASA.

Dragon should reach the space station Tuesday. It's the fifth station shipment for the California-based SpaceX.

The space station was soaring over the South Pacific when the SpaceX Falcon 9 thundered into Florida's pre-dawn sky. Sunday's weather was ideal for flying, unlike Saturday, when rain forced a delay. The rocket was visible for nearly three minutes as it sped out over the Atlantic.

The 3-D printer was developed by Made in Space, another California company. It's sturdier than Earthly models to withstand the stresses of launch, and meets NASA's strict safety standards. The space agency envisions astronauts one day cranking out spare parts as needed. For now, it's a technology demonstrator, with a bigger and better model to follow next year.

A $30 million device for measuring ocean winds is also flying up on Dragon, along with 20 mice and 30 fruit flies for biological research and metal samples for a golf club manufacturer looking to improve its products.

Much-needed spacesuit batteries are on board as well, along with the usual stash of food, clothes and electronic gear. Routine U.S. spacewalks were put on hold following last year's close call with an astronaut's flooded helmet. That problem was solved, then the battery fuses were called into question. NASA hopes to resume spacewalks next month.

NASA is paying SpaceX and Virginia-based Orbital Sciences Corp. to make regular station deliveries. The SpaceX service began two years ago.

Just this past week, SpaceX — led by billionaire Elon Musk — won an even bigger and more prestigious contract to transport U.S. astronauts to the orbiting outpost, along with Boeing. Dragon rides could begin as early as 2016 or 2017.

NASA's ability to launch its own crews ended with the shuttle program in 2011. Russia has been providing rides on its Soyuz spacecraft for a hefty price.

Another American astronaut is scheduled to blast off from Kazakhstan aboard a Russian Soyuz later this week, along with two Russians, one of them a woman, a rarity for Russia.

They will join the one American, one Russian and one German already in orbit.

___

Online:

SpaceX: http://www.spacex.com/

NASA: htttp://www.nasa.gov

Made in Space: http://www.madeinspace.us/

The Canadian Press


22691


TransCanada says Keystone XL costs surged during six years in limbo

CALGARY - Costs for the long-delayed Keystone XL pipeline will likely balloon from US$5.4 billion to as much as US$10 billion, TransCanada Corp. confirmed Friday, as the project marked its sixth year in regulatory limbo.

CEO Russ Girling told the Wall Street Journal that the price tag could rise to a "number that gets you into the high single digits to a 10 number."

Company spokesman Shawn Howard confirmed the remarks.

"It is worth noting that increased project costs mean higher costs for refiners and consumers — and those costs will likely be passed on to all of us as consumers," he added.

TransCanada (TSX:TRP) marked Friday what it called an "unfortunate milestone" for Keystone XL — six years precisely since it applied for a U.S. permit to build the pipeline.

Keystone XL would link 830,000 barrels per day of mostly oilsands crude to an existing network that feeds into the lucrative U.S. Gulf Coast refining market.

Environmental concerns over the project range from a potential spill's impact on drinking water to the enabling of further oilsands development and its accompanying increase in greenhouse gas emissions.

Backers of the project say it would create construction jobs and displace crude imports to the U.S. from unfriendly regimes.

"Our goal is to have more oil moving through pipelines which are safer, produce fewer emissions and provide safe, secure and reliable supplies of oil to American refineries," said TransCanada president of development Alex Pourbaix.

Meanwhile, Reuters reported this week that U.S. hedge funds are eyeing a restructuring of TransCanada.

TransCanada, commenting on "significant trading activity" in its shares, said Friday it's expected to generate significant cash flow, earnings and dividend growth in its current form.

"With its commercially secured $38 billion capital program and ongoing growth in its three core businesses, the company is well positioned to create significant shareholder value," it said.

"Since 2000, TransCanada has delivered a 16 per cent annualized return to its shareholders including an average increase in dividends of seven per cent per annum."

Speaking to reporters on the sidelines of the Global Business Forum in Banff, Alta., TransCanada's former CEO, Hal Kvisle, said a break-up of TransCanada would be "wild speculation."

Kvisle, now Talisman Energy Inc.'s CEO, said TransCanada's portfolio today "makes a ton of sense."

"The market wants yield, they want reliable companies that pay strong dividends and they want strong management teams and TransCanada's got all of that."

Phil Adams, an analyst at independent corporate bond research firm Gimme Credit, said TransCanada should stay as-is.

"We agree with management that a strong balance sheet is critical for tackling an enormous list of growth projects," he wrote in a report.

Follow @LaurenKrugel on Twitter

Note to readers: This is a corrected item. An earlier version referred to Gimme Credit as a ratings agency.

The Canadian Press


TSX falls more than 200 points, pulled down by metals, gold, materials

TORONTO - The Toronto stock market pulled back sharply in heavy trading Friday, weighed down by metals and mining, gold and financials stocks.

The S&P/TSX composite index dropped 200.19 points to close at 15,265.35 on volume of 694 million shares. The Canadian dollar was unchanged 91.35 cents US.

Metals and mining was the leading sector decliner on the Toronto market, down 4.03 per cent even as December copper was flat at US$3.09 a pound.

The gold sector followed, down 2.39 per cent as December bullion lost $10.30 to US$1,216.60 an ounce. Meanwhile, the November crude contract on the New York Mercantile Exchange fell 33 cents to US$91.65 a barrel and the energy sector faded 1.87 per cent.

The big decline in the Toronto exchange came despite optimism in most global markets following Scotland's decision to remain part of the United Kingdom. Fifty-five per cent of Scots voted against independence in the referendum Thursday, compared with 45 per cent in favour of separation.

The news came as a relief to investors because it avoids uncertainty in the U.K. economy and markets over the future value of the pound and public debt, among other issues.

"It certainly was believed by markets that this was the most profitable outcome," said Kash Pashootan, vice-president and portfolio manager at First Avenue Advisory in Ottawa, a Raymond James Company.

"What would've been catastrophic was if the vote was not what it was. In that case, you would've seen markets sell off considerably due to the unknown factor of how things would look moving forward."

Markets now can generally move on from the economic risks associated with Scotland, he said.

"The Scotland story is going to pass. It's not going to be a topic of interest in the short term, with the vote clearly stating that they're going to remain," said Pashootan.

Meanwhile, U.S. markets were mixed amid the stability from the vote and the blockbuster IPO debut of Chinese e-commerce company Alibaba.

The Dow Jones industrials advanced 13.75 points to 17,279.74, another record high. The Nasdaq dipped 13.64 points at 4,579.79 and the S&P 500 index was relatively flat, losing 0.96 of a point to 2,010.40.

Alibaba's stock rose 38 per cent above its IPO price to close at US$93.89 on the New York Stock Exchange and has surpassed the market value of tech giants such as Amazon, Cisco and eBay. It had debuted at US$68 a share.

In other corporate news, TransCanada Corp. says costs for its long-delayed Keystone XL pipeline will likely balloon to as much as US$10 billion, up from US$5.4 billion.

CEO Russ Girling told the Wall Street Journal that the price tag could rise to a "number that gets you into the high single digits to a 10 number" as the project remains in limbo. Company spokesman Shawn Howard has confirmed those remarks, adding the higher costs will be passed on to refiners and consumers in the end.

Keystone XL would link 830,000 barrels per day of mostly oilsands crude to an existing network that feeds into the lucrative U.S. Gulf Coast refining market.

Environmental concerns over the project range from a potential spill's impact on drinking water to the enabling of further oilsands development and its accompanying increase in greenhouse gas emissions. Backers of the project say it would create construction jobs and displace crude imports to the U.S. from unfriendly regimes. Shares in TransCanada (TSX:TRP) gained nearly one per cent, or 57 cents, to $61.38 on the Toronto Stock Exchange.

In economic news, Statistics Canada says the country's annual inflation rate was 2.1 per cent in August, unchanged from the previous month. However, core inflation, the number the Bank of Canada closely monitors and which excludes some items from the volatile energy and food categories, also rose by 2.1 per cent, after an increase of 1.7 per cent in July.

Follow @LindaNguyenTO on Twitter

Note to readers: This is a corrected story: A previous version gave an incorrect closing price for TransCanada

The Canadian Press


20630


Most actively traded companies on the TSX

Some of the most active companies traded Friday on the Toronto Stock Exchange:

Toronto Stock Exchange (15,265.35, down 200.19 points):

Teranga Gold Corp. (TSX:TGZ). Miner. Up four cents, or 5.26 per cent, to 80 cents on 55.9 million shares.

Rio Alto Mining Ltd.(TSX:RIO). Miner. Down 24 cents, or 7.72 per cent, to $2.87 on 25.9 million shares.

Torex Gold Resources Inc. (TSX:TXG). Miner. Down 11 cents, or 7.05 per cent, to $1.45 on 18.3 million shares.

Banro Corp. (TSX:BAA). Miner. Down 5.5 cents, or 25 per cent, to 16.5 cents on 17.8 million shares.

Semafo Inc. (TSX:SMF). Miner. Up 40 cents, or 10.44 per cent, to $4.23 on 15.9 million shares.

Romarco Minerals Inc. (TSX:R). Miner. Down nine cents, or 10.98 per cent, to 73 cents on 14 million shares.

Companies reporting major news:

Algonquin Power and Utilities Corp. (TSX:AQN): Utilities. Up 12 cents, or 1.35 per cent, to $8.98 on 2.3 million shares. The company said Friday it has signed a deal to buy regulated water distribution utility Park Water Co. for US$327 million, including the assumption of US$77 million in debt. Park Water owns and operates three water utilities in Southern California and western Montana.

TransCanada Corp. (TSX:TRP). Oil and gas. Up 57 cents, or 0.94 per cent, to $61.38 on 6.4 million shares. The company said the cost of the long-delayed Keystone XL pipeline will likely balloon from US$5.4 billion to as much as US$10 billion as the project marked its sixth year in regulatory limbo.

The Canadian Press


Canada's top court finds Quebec consumer protection law can apply to banks

OTTAWA - Canada's top court has restored a Quebec trial judge's decision that penalizes five banks for failing to meet provincial disclosure requirements when they charged currency-conversion fees to their credit card customers.

The banks had argued that Quebec's Consumer Protection Act didn't apply to them because of the constitutional division between provincial and federal powers — a position rejected by the Supreme Court of Canada and the lower courts.

The Supreme Court's decision found that both Ottawa and Quebec have detailed rules about the way in which credit card charges must be computed and disclosed but the two sets of rules are not inconsistent with each other.

The court said the banks were seeking "a sweeping immunity" from provincial laws but decided "there are many provincial laws providing for a variety of civil causes of action that can be potentially raised against banks."

The Canadian Bankers Association, which was chosen to speak on behalf of the industry, said the decision would require "further study to determine what the implications will be for consumers."

"Banks take the protection of their customers very seriously," the CBA said. "The federal consumer protection requirements of the Bank Act ensure that credit cardholders across Canada benefit from a clear, comprehensive and consistent set of rules that guarantee clear and simple disclosure of credit card terms and costs, and strong consumer protection monitored by the federal consumer protection regulator, the Financial Consumer Agency of Canada (FCAC)."

The class action suit that sparked the court battle with the banks was launched in April 2003 with Real Marcotte as the representative plaintiff. Marcotte had Bank of Montreal and Desjardins credit cards, but the class action was filed on behalf of similar customers at nine banks and Quebec's largest credit union, Desjardins.

Marcotte later filed a separate class action against the provincially regulated Desjardins after the federally regulated banks indicated they'd make a constitutional challenge. Another class action against Amex was filed on similar grounds to include non-consumer card holders who weren't covered by Quebec's Consumer Protection Act.

The trial judge found that five of the nine banks and Desjardins had violated the provincial rules for disclosing how foreign exchange fees were calculated, but that four of the nine banks had disclosed the information in accordance with the Quebec Consumer Protection Act and federal rules — a position upheld on appeal.

However, Quebec's appeal court overturned the judge's punitive damages against Amex Bank of Canada, Bank of Montreal (TSX:BMO), Citibank and National Bank (TSX:NA). It upheld punitive damages against Toronto-Dominion (TSX:TD).

The Supreme Court of Canada partially disagreed with the appeal court and restored the trial judge's decision that held all five banks should pay punitive damages — about $25 per affected cardholder — for failing to disclose the currency conversion charges to their cardholders.

The Supreme Court also upheld the appeal court's decision that four other banks that were named in the original class action — Royal (TSX:RY), CIBC (TSX:CM), Scotiabank (TSX:BNS) and Laurentian (TSX:LB) — weren't subject to penalties or repayments because of the nature of their cardholder agreements.

A separate Supreme Court ruling involving the Desjardins credit union found that it should return the foreign exchange fees collected from its cardholders but that punitive damages weren't warranted.

The appeal court's decisions were appealed to the Supreme Court.

"The banks submit that the applicability of the relevant provisions of the CPA to banks would impair the core federal banking power. We disagree," the Supreme Court said in its decision on Bank of Montreal vs Marcotte.

"While interjurisdictional immunity remains an extant constitutional doctrine, the court has cautioned against excessive reliance on it. . . . We note that there is no precedent for the doctrine's application to the credit card activities of banks."

It says the Quebec's Consumer Protection Act does affect how banks carry out certain activities but that the rules don't amount to impairing federal powers and it is hard to imagine how these provisions would force Parliament to pass legislation to countermand them.

"For these reasons, we conclude that the Court of Appeal was correct in holding that interjurisdictional immunity is not engaged," the unanimous decision says.

— By David Paddon in Toronto

— Follow @DavidPaddon on Twitter.

The Canadian Press


Differing visions in New Brunswick campaign aim to revive Frank McKenna miracle

Starkly differing Liberal and Progressive Conservative visions of how to reignite New Brunswick's jobs renaissance of the 1990s — still referred to as "the McKenna Miracle" — are being presented to voters worried about the economy in Monday's provincial election.

As the 32-day campaign enters its final hours, jobs and the economy have emerged as the major issue.

The province is looking for a way to renew former Liberal premier Frank McKenna's successful run of job creation from 1987 to 1997, when calls centres and technology startups helped lift the province from economic decline.

That period stands in sharp contrast to the province today, as employment for workers between the ages of 25 and 44 has fallen by 3,800 people since 2010 when Tory Premier David Alward took power, and the public debt stands at $12.2 billion and rising.

"My sense is the electorate is ... wondering what is the path forward to prosperity," says economist Yves Bourgeois, who teaches at the University of New Brunswick in Saint John.

Alward is trying to win support by promising a shale gas industry and carrying through on his plan to boost the forestry industry by making more softwood available on Crown lands.

In the final debate of the campaign, Alward also associated Liberal Leader Brian Gallant's promise to spend almost a billion dollars on infrastructure with former Liberal premier Shawn Graham's economic record.

"The reality during Shawn Graham's last budget, he spent more than any government in the history of New Brunswick on a capital project, he still lost 7,000 jobs," he said. "It (Gallant's plan) will not create real jobs."

Graham's government was the first in the province's history to last only a single term when it was defeated by Alward's Tories four years ago.

Gallant's central economic promise is to spend $900 million over six years to pave roads, repair bridges and upgrade other infrastructure to create jobs, which he concedes would drive the province further into debt.

On the first weekend of the election, Gallant entertained Liberal Leader Justin Trudeau on the campaign trail as they teamed up to attack Alward over shale gas. The federal leader backed Gallant's call for a moratorium to do more study, drawing a rebuke from Alward at the annual premiers conference.

Bourgeois says the various proposals being offered to voters lack the innovative flavour of the McKenna era or the long-term vision of other efforts to rebuild economies around the globe.

"We wired all the communities of New Brunswick, we attracted call centres, we had momentum. But we weren't going to be able to sustain this on low-cost call centres. We needed to build on that," he said.

"Megaprojects like pipelines and shale gas wells are three to seven years at most," he wrote in a followup email.

"That seems to be the extent of the vision for the Conservatives. The Liberals talk about education and infrastructure, but these are means to ends, and it's not clear what those ends are."

David Murrell, an economist who teaches public finance at the University of New Brunswick, said in his volunteer church work in Fredericton he's encountering growing numbers of working poor who are unable to make ends meet.

"We are in a bad budgetary situation ... but you can't spend your way out of low growth," he said.

"I voted Liberal 20 or 30 years ago because McKenna created the call centre industry. ... He created a new industry from scratch."

He said he is supporting Alward's shale gas policy because the initiative is at least an attempt to find a similar focus for the future.

"You need a new sunrise industry come in to create jobs from scratch," said the professor.

But the shale gas policy is polarizing, he added, and doesn't inspire many New Brunswickers as they remain concerned about environmental issues and the impact on the province's large hunting and fishing industries.

In a province where recent politics is dominated by the Liberals and Tories, the NDP and Green party have drawn attention as Monday's vote approaches.

Murrell said NDP Leader Dominic Cardy has preached moderation in economic and fiscal policies that will attract some voters.

Cardy has reorganized the NDP, restored its finances and shifted economic policies to the centre, promising a balanced budget, tax credits for employers who create new jobs and an end to corporate subsidies.

The party has also attracted former Tory and Liberal members of the legislature and cabinet to run for the NDP, which has never held more than one seat in the legislature.

The Liberals, perhaps concerned that the NDP could split their vote in key ridings, have focused attacks on the third-party rival as much as the Tories in recent days.

Gallant's attacks on Alward also included accusations that the premier's Progressive Conservatives have been too close to Prime Minister Stephen Harper to New Brunswick's detriment on things like changes to the employment insurance system.

When the legislature dissolved, the Progressive Conservatives had 41 members, the Liberals 13 and there was one Independent. The election is being fought on a new electoral map that cuts the number of seats in the legislature to 49 from 55.

The Canadian Press


Loonie unchanged amid latest inflation figures, No vote in Scotland referendum

TORONTO - The Canadian dollar was unchanged Friday, closing at 91.35 cents US as the annual inflation rate held steady at 2.1 per cent in August.

Statistics Canada said the cost of living was unchanged from July, when the consumer price index also rose at an annual rate of 2.1 per cent.

However, core inflation, the number the Bank of Canada closely monitors and which excludes some items from the volatile energy and food categories, also rose by 2.1 per cent, after an increase of 1.7 per cent in July.

The central bank has set a target inflation rate at two per cent.

"Positive inflation numbers such as today's release could cause the Bank of Canada to get a little uncomfortable with their view on inflation and interest rates," said Rahim Madhavji of Knightsbridge Foreign Exchange in a note.

The BoC's next rate announcement is set for Oct. 22 when it is also expected to publish an update to its monetary policy report. It has kept its key rate at one per cent for the last four years.

The Canadian inflation data came on the same day referendum results showed Scotland will remain part of the United Kingdom.

Fifty-five per cent of Scots voted against independence, while 45 per cent voted in favour, providing relief for investors. The result avoided uncertainty in the U.K. economy and markets over the future value of the pound and public debt, among other things.

In commodities, the October crude oil contract on the New York Mercantile Exchange dropped 33 cents to US$91.65 a barrel, December gold bullion fell $10.30 to US$1,216.60 an ounce and December copper barely changed at US$3.09 a pound.

Follow @LindaNguyenTO on Twitter

The Canadian Press


US stock indexes finish mixed on day e-commerce giant Alibaba debuts

NEW YORK, N.Y. - U.S. stock indexes are ending mixed on a day when the Chinese e-commerce giant Alibaba made its big debut in the market.

The Dow Jones industrial average edged up 13 points, or 0.1 per cent, to close at 17,279 Friday, the third straight day the blue-chip index closed at an all-time high. The Dow is up 1.7 per cent for the week.

The Standard & Poor's 500 index fell less than one point, or 0.1 per cent, to 2,010, but finished the week up 1.3 per cent.

The Nasdaq ended down 13 points, or 0.3 per cent, to 4,579.

Alibaba soared 38 per cent on its first day of trading. The Chinese e-commerce giant rose $25.89 to close at $93.89.

The Canadian Press


Canada's inflation rate unchanged in August at 2.1 per cent: Statistics Canada

OTTAWA - Canada's annual inflation rate held steady at 2.1 per cent in August, according to new Statistics Canada figures released Friday.

But many observers were caught off guard by an unexpected jump in another key indicator that helps the Bank of Canada decide if it should raise or lower interest rates.

Core inflation, the number the central bank closely monitors and which excludes some items from the volatile energy and food categories, was 2.1 per cent, after an increase of 1.7 per cent in July.

Economists had expected a gain of 1.8 per cent, according to Thomson Reuters.

Statistics Canada said the prices for some of the components in the core index, such as telephone services and passenger vehicles, increased more in August than in July compared with a year ago.

Meanwhile, price increases for gasoline, fresh fruit, fresh vegetables and natural gas, which are excluded from the core index, slowed on a year-over-year basis in August.

Diana Petramala of TD Economics said the jump in core inflation was a bit of surprise, but consistent with the recent pick up in the economy.

"Still, we are inclined not to get worked up over one-month of data. There is still evidence of a significant amount of slack in the Canadian economy," she wrote in a note to investors.

The unemployment rate has held at around seven per cent for the past year, Petramala noted, and prices that are normally tied to economic conditions showed some signs of decelerating in August.

The central bank forecasts for inflation to be about two per cent for the next two and a half years, and for core underlying inflationary pressures to remain below the two per cent target until 2016.

The bank's key interest rate has held at one per cent for four years, and the consensus among economists is that it's not expected to edge upward until closer to mid-2015.

"The unexpected rise in the official core inflation rate, mainly due to recent price hikes in household communications, doesn't appear to reflect any tightening in domestic economic conditions and therefore won't change the Bank of Canada's neutral interest rate outlook," David Madani of Capital Economics wrote in an investors' note.

Meanwhile, Statistics Canada says prices were higher in all 12 categories it looks at. As well, prices were up in every province, with Saskatchewan seeing the highest gain and Prince Edward Island the smallest.

On a seasonally adjusted basis, inflation was up 0.1 per cent in August compared with the previous month, when it fell by 0.1 per cent.

The latest read on inflation came as Statistics Canada also reported that wholesale sales fell 0.3 per cent to $52.9 billion in July.

Economists had expected a gain of 0.6 per cent, according to Thomson Reuters.

The drop came as five subsectors, which together represented 81 per cent of wholesale sales, slipped lower, more than offsetting an increase in the motor vehicle and parts subsector.

Wholesale sales declined 1.0 per cent when the motor vehicle and parts subsector was excluded.

Follow @steve_rennie on Twitter

Note to readers: This is a corrected story. An earlier version incorrectly referred to cigarettes as contributing to core inflation.

The Canadian Press


Measure of the economy's future health slows to 0.2 per cent gain in August

WASHINGTON - A gauge designed to predict the economy's future health rose in August but at a much slower pace than in July.

The Conference Board said Friday that its index of leading indicators rose 0.2 per cent in August, the seventh straight increase. But that was much slower than the revised 1.1 per cent gain in July.

"The leading indicators point to an economy that is gaining traction, but most likely won't repeat its stellar second quarter performance in the second half," said Conference Board economist Ken Goldstein.

The economy, as measured by the gross domestic product, grew at an annual rate of 4.2 per cent in the April-June quarter after going into reverse and contracting at a 2.1 per cent rate in the January-March quarter, a decline that reflected the adverse impacts of a harsh winter.

Many economists say that the economy is growing at a solid pace of around 3 per cent in the current quarter and will also expand at that rate in the final three months of the year.

For August, the small gain in the leading index came from strength in financial market conditions as measured by low interest rates and a rise in factory orders.

The index is composed of 10 forward-pointing indicators. Three showed strength during the month, four declined and three were unchanged. The biggest negative factor holding the index back was a drop in applications for housing permits.

The Canadian Press


China fines British drug maker GlaxoSmithKline $492 million for bribery, orders exec deported

BEIJING, China - Drug maker GlaxoSmithKline was fined $492 million on Friday for bribing doctors in China, the biggest such penalty ever imposed by a Chinese court.

The court sentenced the company's former China manager, Briton Mark Reilly, and four Chinese co-defendants to prison but postponed the sentences for two to four years, suggesting they may never be served. The court said it granted leniency because the defendants confessed.

The case, first publicized in mid-2013, highlighted the widespread use of payments to doctors and hospitals by sellers of drugs and medical equipment in a poorly funded health system that Chinese leaders have promised to improve. The fine is the largest such penalty ever imposed by a Chinese court.

In a statement, Glaxo said it would pay the fine and had made changes in its business to remedy flaws cited by Chinese authorities. It said it would change the incentive system for employees and reduce its engagement with health professionals.

"Reaching a conclusion in the investigation of our Chinese business is important, but this has been a deeply disappointing matter for GSK. We have and will continue to learn from this," said CEO Sir Andrew Witty in the statement.

While large by Chinese standards, the fine is dwarfed by the $3 billion GlaxoSmithKline agreed to pay the U.S. government in July 2012 for paying doctors kickbacks to prescribe several of its drugs and for having sales representatives promote popular drugs for improper uses. The penalty is still the biggest U.S. health care fine in history, according to the non-profit group Taxpayers Against Fraud.

Reilly was sentenced by the court in the central city of Changsha to three years prison with a four-year reprieve and was ordered deported, which meant he might leave China immediately. His co-defendants received prison terms of two to four years, with reprieves of two to four years.

In other cases, convicts have been spared prison if they are deemed to have reformed during their reprieve.

The police ministry said in May that Reilly was accused of operating a "massive bribery network." It said Reilly ordered salespeople beginning in January 2009 to pay doctors, hospital officials and health institutions to use GSK's products.

A police investigation found that GSK employees funneled as much as 3 billion yuan ($490 million) through travel agencies and consulting firms, which kicked back some of that money for use as bribes. Police have not made clear how much was paid out in bribes.

Investigators said the scheme appeared to be aimed at evading GSK's internal controls meant to prevent bribery.

Glaxo had said earlier the employees acted without its knowledge and violated its policy. In December, it said it would stop offering financial support to doctors and other health care professionals to promote its products.

Such informal payments pervade China's dysfunctional health system. Low salaries and skimpy budgets drive doctors, nurses and administrators to make ends meet by accepting money from patients, drug suppliers and others. The Glaxo case brought the flow of illicit money to international attention, but within China the practice is common knowledge.

Many blame a system in which China's hospitals nearly all are state-run but get too little money from Beijing. Most of the country's 2.3 million doctors are hospital employees and are barred from adding to their income by taking on second jobs.

The ruling Communist Party has promised higher health spending as part of efforts to spread more of China's prosperity to its poor majority. But with a population of 1.3 billion, the cost of a full-scale overhaul will be daunting.

A second foreign drugmaker, AstraZeneca, said in July 2013 that police in Shanghai were investigating one of its salespeople.

In a separate case, China's biggest drug distributor, Sinopharm Group Ltd., said in January that two former executives were the target of a corruption investigation.

GlaxoSmithKline is among many multinational drugmakers that have crossed legal or ethical lines to boost sales of prescription medicines.

Most cases involve promoting prescription medicines for uses that aren't approved — and for which there is often no evidence that they are effective or safe. Some drugs have grown to become multibillion-dollar annual sellers primarily from patients taking them for unapproved uses.

It was also common practice for decades for drugmakers to pay doctors in the U.S. and elsewhere "consulting fees," send them on junkets and give them gifts, with the expectation that the doctors would prescribe more of that company's medicines and even encourage colleagues to do so. The industry has attempted to eliminate or at least reduce those excesses under pressure from the government and others. Companies will soon begin publicly reporting payments to doctors, as required under provisions of the Affordable Care Act.

____

Business Writer Linda A. Johnson in Trenton, N.J., contributed to this report.

The Canadian Press


As Scotland rejects independence, businesses and investors breathe sigh of relief

LONDON - Scotland's decision to reject independence from the United Kingdom gave British markets a short-term lift Friday but worries over future constitutional changes kept a lid on the relief rally.

The No campaign won 55.3 per cent of the votes cast in Thursday's referendum against 44.7 per cent who backed independence. The margin was wider than expected — most opinion polls on the eve of the vote were predicting a narrower 4-point victory for proponents of the union with England, Wales and Northern Ireland.

Investors breathed a sigh of relief that a host of thorny economic issues were not triggered by a Yes vote. The FTSE 100 index of leading British shares ended up 0.3 per cent at 6,837.92 but had been higher earlier in the session.

As well as worries over what currency an independent Scotland would use, investors had concerns over how the U.K.'s 1.3 trillion pounds ($2.1 trillion) debt would be split. There were even fears that a Yes vote may have triggered a bank run. The uncertainty was so great that Bank of England Governor Mark Carney flew back early from a summit in Australia.

"It might not have been financial meltdown territory, but the markets almost certainly would have been in turmoil if the Scots had voted yes," said Dennis de Jong, managing director at UFX.com.

Those companies with Scottish connections outperformed the general market. Among them, Royal Bank of Scotland PLC closed up 2.5 per cent, while Lloyds Banking Group PLC rose 1.3 per cent.

Royal Bank of Scotland, which is majority-owned by the U.K. government since receiving a bailout during the financial crisis in 2008, said it was abandoning a contingency plan that included moving its head office down south to England.

"That contingency plan is no longer required," the bank said in a statement. "Following the result it is business as usual for all our customers across the U.K. and RBS."

In the currency markets, the pound suffered a bit of a reverse Friday as traders raked in profits accumulated over the past week when the currency rallied strongly on growing expectations of a No vote.

Having earlier risen to a two-year high of 1.2817 euros, the pound settled around the 1.27 euro mark, down slightly on the day. Against the dollar, the pound was down 0.8 per cent at $1.6320, but still over two cents higher than it was ten or so days ago when the Yes campaign looked like it could win.

Uncertainty over the pound was likely a key element in the No campaign's victory. A key concern had been what currency an independent Scotland would use. The Yes campaign had hoped it would still use the pound through a currency union with what's left of the U.K. but the main British political parties insisted that wasn't going to happen.

Now that the independence issue has been resolved, the focus in markets is swiftly moving on. Late on in the campaign, Scotland, which has its own Parliament responsible for a wide array of policies such as health and education, was promised further devolved powers from London.

Cameron's statement to create a "balanced settlement, fair to people in Scotland and importantly to everyone in England, Wales and Northern Ireland as well" suggests more reforms are likely to be proposed as part of a broad-based constitutional rejig in the U.K.

"Precisely what this will entail may be unclear for some time, but it adds an additional coating of uncertainty to that provided by the 2015 general election that could keep the pound firmly on the back foot for the remainder of the year," said Neil Mellor, senior currency strategist at Bank of New York Mellon.

The Canadian Press


Burke says it's 'unacceptable' to bring aggression from ice into personal life

CALGARY - Players who take aggression from the ice into their personal lives don't deserve to earn pro-athlete wages, said Calgary Flames president Brian Burke.

Burke was asked at the Global Business Forum in Banff, Alta., how he would have handled the NFL's Ray Rice scandal.

"The notion that 'I get paid to fight on a hockey rink so that same level of violence is acceptable on the street or in my home,' I think that's just pure bulls--t," Burke said as the crowd of CEOs and other prominent figures applauded. "And if a player can't separate them, then the player doesn't deserve to earn professional athlete wages."

A recent video showing Rice, a star NFL running back, assaulting the woman who is now his wife has ignited a debate over how pro sports leagues ought to deal with an athlete's bad behaviour outside of the game.

Whenever there's an incident in another sport, Burke said he weighs how he would handle it with his team.

"What would we do if one of our players did this? How would we react? Every time we have an issue in another sport, we dry run it internally. We've done it a lot the past week."

Burke said it's a balancing act as any form of domestic violence is unacceptable, but citizens are entitled to due process if they're accused of a crime.

However, he says if he had evidence a player had assaulted someone off the ice, he'd have to act.

"So in the Rice case, when there's a video, we don't have to guess what happened there," he said. "That case, we'd say 'We're done with this player. He's done with us.' We're going to do the right thing first."

And if a financial penalty or lawsuit results, so be it, he said.

Professional athletes are in the public eye, so it's expected they be held to a high standard, said Burke.

"These jobs pay well," he said. "There's lots of people who will do them if you don't want to do them on those terms."

Mario Lefebvre, co-author of "Power Play: The Business and Economics of Pro Sports" said fans care how such issues are handled.

"And if they feel like the right decision's been taken, then they're going to go on and continue to support," he told the forum. "I think you're better to be proactive about it."

---

Follow @LaurenKrugel on Twitter

The Canadian Press


US stocks edge higher at midday as e-commerce giant Alibaba debuts on NYSE

NEW YORK, N.Y. - U.S. stocks are slightly higher at midday after Chinese e-commerce giant Alibaba made its big debut in the market.

The Dow Jones industrial average rose 27 points, or 0.2 per cent, to 17,293 as of 12:03 p.m. Friday, above its all-time closing high from the day before. The Standard & Poor's 500 index edged up less than one point, or 0.1 per cent, to 2,012, above its own record from the previous day.

The Nasdaq fell nine points, or 0.2 per cent, to 4,583.

Alibaba surged as it began trading on the New York Stock Exchange just before noon. It traded at $98 minutes after its debut, a 44 per cent rise from its initial public offering of $68 a share.

The Canadian Press




Read more Business News

22980


Recent Trending




Today's Market
S&P TSX15265.35-200.19
S&P CDNX955.06-10.73
DJIA17279.7413.75
Nasdaq4593.426-13.637
S&P 5002010.40-0.96
CDN Dollar0.9126+0.0004
Gold1216.90-10.00
Oil92.45-0.62
Lumber329.00-0.90
Natural Gas3.911-0.064

 
Okanagan Companies
Pacific Safety0.16-0.005
Knighthawk0.01-0.005
QHR Technologies Inc1.37+0.05
Cantex0.05-0.01
Anavex Life Sciences0.223-0.0031
Metalex Ventures0.060.00
Russel Metals35.75-1.26
Copper Mountain Mining2.66-0.02
Colorado Resources0.165-0.01
ReliaBrand Inc0.0249+0.0009
Sunrise Resources Ltd0.02-0.005
Mission Ready Services0.29-0.01

 



22967

FEATURED Property
2038583#14 2035 Boucherie Road, Westbank
$125,000
more details
image2image2image2
Click here to feature your property
Please wait... loading


Disruptive innovation

Last night I was privileged to be able to speak at the Greater Westside Board of Trade business awards dinner. Photo: ContributedI talked about Innovation and Collaboration which are two very interes...


Executors and their duties

There will be a time when you will need to decide who you should appoint as executor of your Will. As well, there may be a time when you will be asked by someone to act as the executor of his or her W...


Power-save your way to a down payment

Part 1 of 2 Photo: Thinkstock.com1. Move in with your parents or in-laws Explain that you're thinking strategically in moving back home. The quickest way to get into the housing market is to ma...

_








Member of BC Press Council


22962