Alberta credit downgraded

Alberta's credit rating has once again been knocked down over concerns of rising debt levels and unbalanced budgets.

S&P Global Ratings says it has reduced the province's rating two notches from AA to A+ on its expectation of continued high deficits in the next two years as Alberta tries to stimulate the economy.

"Our assessment of the province's budgetary performance ... has significantly deteriorated and is materially weaker compared with that of both domestic and international peers," the agency said.

Finance Minister Joe Ceci said the NDP government made a choice to keep spending to foster growth, rather than to make budget cuts to please bond raters.

He said efforts are starting to pay off. Alberta's economy is expected to grow 2.6 per cent this year, the highest rate in Canada.

"Had we made deep cuts that might have satisfied some bond raters, it would have resulted in a much deeper and longer recession," said Ceci.

Wildrose leader Brian Jean said it was the government's "reckless spending" that led to another downgrade and that will lead to higher debt-servicing costs.

"Today's credit downgrade is yet another example of how much damage the NDP is inflicting with its disastrous budgets and policies at a time we can least afford it," said Jean in a statement.

S&P expects Alberta to borrow more than $55 billion between fiscal 2018 and 2020, bringing total tax-supported debt to $94 billion by the end of fiscal 2020.


Nortel to start paybacks

Nortel Canada's long-suffering creditors will finally begin to receive their share of more than US$4 billion to be distributed under a plan approved in January, eight years after the former technology titan began bankruptcy proceedings.

Nortel Networks Corp. — the formerly public multinational company that was headquartered in Canada — announced Friday that the initial distribution of the money is expected to be made in late June or early July.

The distributions will include US$4.165 billion that Nortel Canada has now received as its share of a negotiated settlement after a years-long battle over a total of US$7.3 billion raised by the sale of the company's worldwide assets.

Nortel Canada will make its payments in stages to bondholders, suppliers and former employees who filed claims against the Canadian portion of the business, which was at one time among the world's biggest network suppliers.

The exact timing and amounts of the payments are yet to be determined but Nortel's court-appointed monitor has said that creditors will get less than half of what they'd claimed.

Creditors with claims primarily in Canadian dollars will be entitled to between 45 cents and 49 cents per dollar owed. Creditors with claims in other currencies will receive between 41.5 cents and 45 cents in U.S. currency.

Zuckerberg: have 'purpose'

Mark Zuckerberg returned Thursday to Harvard, where he launched Facebook and then dropped out, telling graduates it's up to them to bring purpose to the world, fight inequality and strengthen the global community.

"Change starts local. Even global changes start small — with people like us," the Facebook CEO said. He shared stories about graduates such as David Razu Aznar, a former city leader who led the effort to legalize gay marriage in Mexico City, and Agnes Igoye, who grew up in conflict zones in Uganda and now trains law enforcement officers.

"And this is my story too," Zuckerberg added. "A student in a dorm room, connecting one community at a time, and keeping at it until one day we can connect the whole world."

Such lofty talk now comes naturally to Zuckerberg, a 33-year-old billionaire who has committed to giving away nearly all of his wealth. In February, he sketched out an ambitious, if vague, vision for Facebook that committed the company to developing "social infrastructure" that would help build a "global community that works for all of us."

But it also strikes a sharp contrast with the criticism Facebook has taken recently — not so much for connecting the world (a big chunk of it, anyway) as for failing to anticipate how vulnerable that connectedness could be to those who abuse it.

He told the graduates how, when Facebook's investors and executives wanted him to sell the company early on, he resisted. "You see, my hope was never to build a company, but to make an impact," he said.

Seeking CRTC review

Videotron wants Canada's telecom watchdog to review its decision that requires the company to stop offering its unlimited music service by mid-July, saying it will otherwise suffer irreparable harm.

The CRTC ruled last month that Internet service providers can no longer exempt some content from counting towards customers' data caps and gave Videotron until July 19 to ensure its unlimited music streaming service complied with the new regulations.

Quebecor-owned Videotron filed a review application Thursday, asking the CRTC to allow current subscribers who use the streaming service to be allowed to continue to do so until their contracts reach the end of their handset subsidy amortization period or are otherwise renegotiated or renewed.

Alternatively, Videotron wants the CRTC to postpone the deadline for shutting down the program for existing subscribers, saying the mid-July date doesn't provide enough time to create alternative services or benefits for customers, among other things.

Videotron is also seeking a stay on the CRTC's original decision until the regulator rules on Videotron's review application.

The CRTC did not immediately respond to a request for comment.

In its application, Videotron asks the CRTC to decide whether or not to grant the stay no later than June 9.

OPEC to cut output

OPEC and other oil nations meeting Thursday were set to extend their production cuts in an effort to shore up prices. But the intended impact could be short-lived.

That's due to U.S. shale producers. With crude prices above $50 a barrel from lows of last year, they are increasingly moving back into the market. Their output already is partially offsetting the cuts, and even more U.S. companies are poised to return if prices rise further.

The upshot is that the price of oil — and derived products like fuel —is unlikely to increase much in coming months, analysts say. That will be welcome news to consumers and energy-hungry businesses worldwide but could continue to strain the budgets of some of the more economically-troubled oil-producing nations, like Venezuela and Brazil.

The latest reductions have been in effect since November, when the Organization of the Petroleum Exporting Countries agreed to cut production by 1.2 million barrels a day. Non-OPEC countries led by Russia chipped in with a further 600,000-barrel reduction.

With the deal due to expire at the end of June, one participant said the group had opted for a nine-month extension. He spoke only on condition of anonymity because he was not authorized to divulge the information prematurely.

Earlier, Saudi Oil Minister Khalid A. Al-Falih spoke of a "nine-month straight" extension going into the meeting. Iran's Bijan Namdar Zanganeh floated possible extensions of three months, six months or even a year and said his country had "no difficulty" with any of the options, while Jabbar Ali Hussein Al-Luiebi, his Iraqi counterpart, mentioned "the scenario of a nine-month freeze."

Al-Falih said that the cuts had achieved a key aim. "Inventories are drawing down," he told reporters.

The price of oil, however, slumped $1.03 a barrel to $50.33 in New York trading Thursday on the realization that the extension is unlikely to substantially boost prices in the longer term.

Some weed with your wine?

Bill and Barbara Steele moved to this sleepy corner of Oregon to start their own winery after successful, high-powered business careers.

Now, more than a decade later and with award-winning wine to show for their hard work, they are adding a new crop: marijuana.

Oregon's legalization of recreational pot two years ago created room for entrepreneurial cross-pollination in this fertile region abutting California's so-called Emerald Triangle, a well-known nirvana for outdoor weed cultivation.

Recreational marijuana won't be legal in California until next year, but a few miles north of the border in Oregon, a handful of winemakers are experimenting with pot in hopes of increasing their appeal among young consumers and in niche markets.

"Baby boomers are drinking less. Millennials are coming into their time, economically, where in 2016 they were the fastest-growing consumers of wine, both in dollars and volume," said Barbara Steele, who runs Cowhorn Vineyard & Garden in rural Jacksonville with her husband.

"They're looking for an experience of 'wine and weed.'"

The Steeles leased their land to grow 30 medical marijuana plants last year, and this year they are growing double that amount to be branded with the same label as their wine. They started with seeds in plastic cups under incubators in their laundry room, and pride themselves on a "seed to smoke" philosophy.

This year's crop also is for medical use, but the Steeles are seeing the benefits of the expanding market from legal recreational pot. Their weed was reviewed alongside one of their white wines in Stoner Magazine, an Oregon cannabis publication.

Graco recalls car seats

Graco Children's products is recalling 1,393 child car seats in Canada due to a problem with harness webbing.

An advisory from the company's Canadian division says the recall covers "My Ride 65" seats which were made between May 14, 2014 and July 30, 2014.

It says harness webbing on the car seats failed to meet Canadian standards for breaking strength.

Graco says it will provide free replacement kits with new harness restraints and installation instructions.

While waiting for a replacement kit, the company says consumers may continue to use My Ride 65 convertible car seats.

The company has issued a similar recall in the United States affecting more than 25,000 car seats.

Big banks rake in profits

Canada's big banks are raking in the profits.

CIBC reports $1.05 billion of net income in its second quarter, up 11 per cent from a year ago, when it reported $941 million of net income.

The earnings amounted to $2.59 per share, compared with $2.35 during the second quarter of 2016.

The Toronto-based bank had $3.70 billion of revenue during the quarter, compared with $3.63 billion a year ago.

Royal Bank of Canada, meanwhile, has boosted its second-quarter net income by nine per cent to $2.81 billion.

That compares with $2.57 billion during the second quarter of 2016.

The profit amounted to $1.85 per share, compared with $1.66 per share during the same period last year.

The Toronto-based bank had $10.31 billion of revenue for the period ended April 30, up from $9.53 billion a year ago.

TD Bank said it had $2.5 billion of net income during the second quarter, up 22 per cent from a year ago

The earnings amounted to $1.31 per share.

That compared with $1.07 per share or $2.05 billion of net income during the same period last year.

The Toronto-based bank had $8.47 billion of revenue during the three-month period ended April 30, up from $8.26 billion a year ago.

Serena goes high-tech

Tennis star Serena Williams has 39 Grand Slam titles, four Olympic medals, major endorsement deals and her own line of clothing and accessories. Now she is embarking on a new mission: She says she wants to help tech companies diversify their workforces and solve one of the industry's most vexing problems.

Williams, 35, will get her chance as she joins a Silicon Valley boardroom. Online survey service SurveyMonkey announced Williams' appointment to its board on Wednesday, along with Intuit CEO Brad Smith.

"I feel like diversity is something I speak to," Williams said in an interview with The Associated Press. "Change is always happening; change is always building. What is important to me is to be at the forefront of the change and to make it easier for the next person that comes behind me."

Silicon Valley's lack of diversity has become a recurring source of embarrassment in a region that has long sought to position itself as an egalitarian place that doesn't favour one gender, ethnicity or race over another. Yet that philosophy hasn't been reflected in high-tech workforces , despite the efforts of companies such as Google, Apple and Facebook to fix the problem.

Williams has been hanging around Silicon Valley more frequently now that she is engaged to high-tech entrepreneur, Alexis Ohanian, the co-founder of the online forum Reddit. Like many other African-Americans, she says she's disappointed that the vast majority of high-paying technology jobs are filled by white and Asian men.

At SurveyMonkey, which employs about 650 workers, only 27 per cent of technology jobs are filled by women. Just 14 per cent of its total payroll consists of African-Americans, Latinos or people identifying themselves with at least two races, according to numbers the company provided to the AP.

Williams' celebrity may help draw attention to the lack of diversity on corporate boards themselves, said Brande Stellings, vice-president of corporate board services for Catalyst, a group focused on fighting for women's rights at work. For instance, African-American women occupy only 122 of the more than 5,000 board seats among Fortune 500 companies, based on Catalyst's analysis.

$950M for 'supercluster'

The Trudeau government is opening the competition for its $950-million "supercluster" program that aims to bring together industry and academia as a way to lift the innovation economy.

Economic Development Minister Navdeep Bains announced the deadline details and qualifying criteria Wednesday for a five-year initiative central to the feds' innovation program.

Bains said the goal of the plan is to have government bring together post-secondary institutions and businesses to help develop new technologies, boost growth and create jobs in different parts of the country.

"We really want to see strong economic benefits," Bains said in an interview Wednesday.

"We want to be a meaningful partner, we want to promote collaboration and we're willing to put money to really foster and unlock more investment in research and development to help companies quickly commercialize their ideas, to help Canadian companies really scale and grow up and compete globally."

He said the first deadline to submit a letter of intent is July 21. Up to five bids from industry-led consortia will eventually be selected by the end of the fiscal year to receive a portion of the federal funding.

The government is expecting the public investment to be matched dollar-for-dollar by the winning partnerships.

Bombardier, Triumph settle

Bombardier and Triumph have reached a settlement about five months after the U.S. aerospace supplier filed a $455-million lawsuit against the Quebec-based aircraft manufacturer.

Details of the settlement announced Wednesday were not disclosed.

Triumph had alleged in a suit filed in Quebec Superior Court that Bombardier failed to pay for expenses related to changes in the design of wings for the Global 7000 business jet.

Bombardier (TSX:BBD.B) had rejected the allegations, saying they are without merit. It said the changes were made collectively by both sides and were within the scope of its contract with Triumph.

Triumph says it still supports the Global 700 program.

The Global 7000 had its maiden flight last November and is scheduled to enter into service next year.

Bombardier spokesman Mark Masluch says the legal dispute won't cause delays in the aircraft's deliveries and hasn't damaged its commercial relationship with Triumph.

Bank holds rate at 0.5%

Uncertainties continue to obscure the economy's stronger-than-expected start to the year, the Bank of Canada said Wednesday as it stuck with its trendsetting interest rate of 0.5 per cent.

In explaining its decision to hold the rate, the central bank once again highlighted weak wage growth and the slowing pace of underlying inflation as examples the economy still has room for improvement.

For balance, the bank's scheduled rate announcement pointed to the surprisingly healthy start to the year in areas such as employment, consumer spending and the housing markets. In Wednesday's statement, the bank added better business investment numbers to the list.

"Recent economic data have been encouraging," the bank said.

"Consumer spending and the housing sector continue to be robust on the back of an improving labour market, and these are becoming more broadly based across regions."

The bank's statement also said while recent government policy measures on real estate have contributed to more sustainable outlooks for household debt, the rules have yet to have a substantial cooling effect on hot housing markets.

Many economists later noted that the tone of the bank's brief, one-page statement was a little more upbeat than they had expected.

"There is one clear message embedded in these 300 words and that is the Bank of Canada is not spooked either by housing or by coming trade talks (with the U.S.)," said Frances Donald, senior economist for Manulife Asset Management.

"They are staying the course, confident in the growth path and not afraid of a recent deceleration in inflation."

Donald said the statement read a bit like a "placeholder" ahead of the Bank of Canada's July rate decision, which will be accompanied by its updated projections. She added that it was likely too difficult for the bank to summarize its nuanced views in Wednesday's release about the complex and developing issues Canada has faced over the past couple of months.

More Business News

Recent Trending
Castanet Proud Member of RTNDA Canada
Press Room