No consumer sympathy

A warning from Canada’s biggest media companies that their survival is under threat from unregulated foreign rivals and illicit content pirates has sparked a massive influx of submissions to the federal telecommunications regulator from consumers with little sympathy for their cause.

Midway through a 30-day public consultation that is open until March 1, more than 5,440 responses have been posted with the Canadian Radio-television and Telecommunications Commission — predominantly focused on one issue.

There's been a huge outpouring of criticism against an anti-piracy proposal launched last month by a coalition led by BCE Inc., the owner of the CTV television network and specialty channels such as TSN.

"Those numbers are pretty remarkable," said University of Ottawa law professor Michael Geist, an outspoken critic of the industry's calls for increased protections.

FairPlay Canada, which also includes Rogers Communications Inc., Cineplex Inc., the Canadian Broadcasting Corp. and others, are calling for a new federal agency to locate and shut down websites that are portals for pirated content.

But the organization shouldn't be surprised that the public is actively interested in how the internet is run, Geist said.

"I think they realize that we're all dependent on the internet for so many aspects of our lives."

In fact, many of Canada's major media companies have said that the life-blood of their industry — money — is flowing through the internet to unregulated foreign rivals and to illegal websites that haven't paid for content rights.

For BCE, which owns the Bell Canada telecommunications business in addition to its media holdings, the problem is multi-pronged.

Not only must BCE help pay for Canadian content, it wrote, but its deep-pocketed foreign rivals like Netflix are bidding up the price of Canadian rights to foreign programs — primarily popular American television shows.

"We rely on this content to bring in audiences and advertising dollars, which then supports the production of Canadian content," Bell said.

And while the Trudeau government seems determined to support Canadian content as a cultural imperative, there's little consensus on how to accomplish that goal.

Heritage Minister Melanie Joly has given the CRTC until June 1 to submit a report to cabinet that outlines the possible future of the broadcast distribution system, including how it can support Canadian content.

But many of the public submissions about the future form of the industry, like those about content piracy, are unsympathetic to the domestic industry's concerns about being required to fund Canadian content as they have in the past.

3-D printed teeth?

3-D printing has been around for some time now, but one of the most interesting implications of it is in the field of dentistry.

Dentists can now print you a new tooth, or a new smile. And you can get it done in Kelowna at Landmark Dental.

You can even choose the smile you’d like (maybe J-Lo has the teeth you’ve always wanted?) from an online “smile library,” taking fandom to a whole new level.

Starting with a 3-D scan, the process of getting a crown has become much simpler, eliminating the “goop” everyone speaks about that used to be necessary to create an impression (and thereby 3-D rendering) of your pearly whites. 

After the scan, the file goes to a ceramic lab, where they come up with a 3-D rendering for you to try on to see if you like it. They call this, endearingly, your “trial smile.”

Your teeth are then created on a 3-D printing machine, and fitted at your next visit.

They are now working on making the teeth bacteria-resistant as well, to prevent cavities.

The era of the six-million-dollar man is upon us. Watch as host Leanne Allen goes through the process from start to finish.

– Leanne Allen

Lumber industry spirits high

Softwood lumber duties aren't dampening the spirits of Canadian lumber producers as strong demand from rising U.S. housing starts and tight supply is expected to keep prices high throughout 2018.

The number of U.S. housing starts beat expectations by surpassing 1.33 million in January on a seasonally adjusted basis, with single family starts increasing 7.6 per cent. Housing permits approached 1.4 million.

Conifex Timber Inc. chairman and CEO Kenneth Shields said last week he also expects repair and remodelling markets will remain robust.

"With this favourable demand backdrop coupled with duties on Canadian lumber exports to the U.S., we expect lumber prices to remain strong in 2018," he said during a conference call about its 2017 results.

The Vancouver-based producer said its earnings per share more than doubled last year as it posted record revenues that rose 15 per cent.

Shields added that the growth in demand is going to outstrip the increase in supply of lumber for the next 18 to 36 months in the U.S.

"Although prices could very well remain volatile, the trends will be pointing upwards, not down."

Prices have been creeping up annually and stood at US$528 per thousand board feet for Western SPF slumber hipped from Canada, up from an average of US$278 in 2015 and US$401 last year.

At these prices, harvest reductions in British Columbia will likely be deferred while production will accelerate, Shields said.

Paul Quinn of RBC Capital Markets said the thinking among Canadian producers has changed over the past year. They originally expected to absorb half the duties with the other half being passed on to consumers.

What happened was that producers pushed all of the duty to consumers and more, he said in an interview.

"They're cautiously optimistic but if you ask them internally they're giddy inside."

Quinn said lumber prices, which reached a nominal high last year, will abate once a new softwood lumber agreement is negotiated in a year or so after the U.S. government is forced by an administrative review panel to drop the duty rate.

West Fraser Timber Co. Ltd. CEO Ted Seraphim said North American lumber demand should grow by two-billion board feet per year while U.S. production will only modestly increase by 750-million to one-billion board foot range annually.

Volatility last year over uncertainty about duties made buyers reluctant to buy lumber but Seraphim said he's encouraged by the improving supply-demand fundamentals.

"Our longer-term view is really positive," he said during a conference call.


Liberals seek equality

The Liberal government is trying to move beyond the obvious in its quest for gender equality, thinking outside the daycare box to more thoroughly examine how the federal budget would impact men and women in different ways — even before committing to a dime of spending.

"They definitely received the message that it needs to be not just a list of things that are true about gender inequality," said Kate McInturff, a senior researcher with the Canadian Centre for Policy Alternatives.

"It needs to be really fundamentally integrated into their economic policy."

The idea behind gender-based analysis is to think about how a government policy, legislation or spending might affect men and women, or boys and girls, in different ways, while accounting for other intersecting factors such as income, ethnicity, disability and sexual orientation.

If the analysis, which is ideally done early on in the process, reveals one gender would experience disproportionately negative impacts, then policy-makers can change course or pay added attention to other areas that could help mitigate those effects.

Last year, the government of Prime Minister Justin Trudeau got some on-brand attention for adding some feminist flavour to the federal budget, including a 25-page chapter that touched on how some of its commitments would benefit women, including child care spending.

This time around, government officials — speaking on condition of anonymity ahead of the Feb. 27 budget — took a more holistic approach to gender-based analysis, including a framework that will help determine the impact on a larger scale, rather than one line item at a time.

It was no doubt a big help that the Liberal government has decided to make gender equality an overarching theme of its G7 presidency. The budget is expected to include elements that would help Canada lead by example as it hosts the June gathering of world leaders in La Malbaie, Que.

Finance Minister Bill Morneau has previously said the budget would include measures to boost the participation of women in the workforce.

Several stakeholders who took part in his gender-related consultations said they heard a lot about women in leadership, but they hope the budget will also include things like dedicated leave for new fathers or non-birthing parents, funding for the pay-equity legislation the Liberals promised to introduce this year and, potentially, something more on child care.

The officials said the goal of the gender-based analysis this year is to figure out how the entire budget will move the dial on equality in Canada. They began thinking this way right at the outset, so that the analysis informed the choices made along the way before they were set in stone, they added.

The picture will not always be rosy, said the officials, and so it is also set up to track progress — or a lack thereof — into the future.

There is also a need for more and better data to make the gender-based exercise more effective, they added.

Since the Trudeau government would have already been focused on improving opportunities for women and girls in this budget, even without the more rigorous gender-based analysis, the officials said the true test of the process will be a few years down the road.

A memo prepared for Morneau last August proposed five strategic objectives for the gender equality framework, with core indicators to measure and an assessment of how Canada is doing on those fronts.

They include ensuring equal opportunities for men and women when it comes to education and skills training, business leadership and economic influence, as well as the economy more generally, even looking at the distribution of unpaid housework and caregiver responsibilities.

The other goals are ensuring both men and women are safe from physical and emotional harm, such as by reducing intimate partner violence and sexual assault, which disproportionately victimize women and girls, as well as tackling poverty and improving health.

The Canadian Press obtained the memo through the Access to Information Act.

Canada committed to using gender-based analysis in 1995, as part of ratifying the UN Beijing Declaration and Platform for Action, but two decades later the auditor general revealed relatively few departments and agencies were using it, while those that did were doing so in an incomplete and inconsistent way.

Over the past two years, Trudeau is said to have pushed his ministers for more robust gender-based analysis, and the officials say the culture has now reached the point where departments know it must be done, and done well, to be considered at the cabinet table.

The Finance Department also devoted about six months last year to consulting with gender experts on a made-in-Canada approach to the budgeting exercise, which includes a greater focus on intersectionality — including ethnicity — than seen in other countries.

What to watch for this week

Five things to watch for in the Canadian business world in the coming week:

Bread battle fallout Loblaw Co. Ltd. releases fourth-quarter and year-end results on Thursday. The grocery giant rocked the food retail industry in December when it admitted to participating in an alleged price-fixing conspiracy. Loblaw and George Weston Ltd. were granted immunity from prosecution by the Competition Bureau, and have been threatened with legal action from rival Sobeys Inc. for implicating it in the scheme.

Big Six earnings begin CIBC and Royal Bank of Canada release first-quarter results on Thursday and Friday, respectively. The two banks are among six named in a class-action lawsuit filed in a U.S. court that alleges Canadian banks and three others conspired to increase the profitability of their derivatives trading business by manipulating an interest rate benchmark for about seven years.

Train to profitability? CP Rail president and CEO Keith Creel presents at the Citi 2018 Industrials Conference in Miami Beach on Thursday. An RBC Dominion Securities analyst said Thursday that service at rival Canadian National Railway Co. was deteriorating so badly — including below-average train speeds and above-average “dwell time” in terminals — that clients are switching their cargoes to Canadian Pacific Railway CP Rail.

Some pirates are better than others Cineplex Inc. discusses fourth-quarter and year-end results on Thursday. The movie exhibitor chain has joined other prominent members of Canada's entertainment industry to call for a new federal agency to locate and shut down websites that are portals for illegally obtained video and audio content. Dubbed FairPlay Canada, the group argues that Canadian jobs are at risk because consumers can get access to TV shows, movies and music from websites that don't pay for the content that they stream to consumers.

Winner! Gagnant! SNC-Lavalin Group Inc. releases fourth-quarter and year-end results on Thursday. The Montreal-based Engineering consulting and construction firm was the big winner on Feb. 8 when it was awarded rights to help build Montreal's new light-rail project connecting the city to its suburbs and its international airport. SNC-Lavalin is part of the two consortiums that will both build the infrastructure and furnish the trains.

Alberta Spitz plant to close

The Spitz sunflower seed plant in southeastern Alberta is to close later this year, throwing 53 people out of work.

PepsiCo, the plant’s owner, says production will move to another plant in the U.S.

The company says it will help the employees with financial support, counselling and job placement services.

The plant in Bow Island is about 300 kilometres southeast of Calgary.

Spitz International was founded in 1982 by Dutch immigrants Tom and Emmy Droog.

It eventually became a leading sunflower seed producer and was bought by PepsiCo in 2008.

"We hope you get out there and enjoy all our delicious flavours and taste the Spitz difference for yourself," the Spitz website said on Friday. "And when you do, think of the folks in Bow Island, who couldn’t be prouder."

Drew Barnes, the United Conservative Party's finance critic, pointed the finger at Alberta's NDP government for the plant closure.

"You look at our ever-increasing electricity rates, you look at our minimum wage changes, you look at our oil and gas people not working in Alberta," he said.

"They didn’t make their decision only in this vacuum, but I’m sure when I’m talking to the people in Bow Island in the coffee shop tomorrow morning, they’ll be feeling the current NDP government's a big part of their decision."

PepsiCo's statement about the plant closure made no mention of politics or government policies.

The company said it had to make a difficult business decision based on an extensive evaluation of the long-term viability of plant "and its ability to meet our increasing volume requirements for the brand, which will continue to play an important role in our North American portfolio."

Rouge adding more aircraft

Air Canada is looking to cut operating costs and defend against competition from upstart low-cost competitors by adding more planes to its Rouge fleet and flying them on regional routes within Canada.

Narrow-body Rouge planes that operate at lower cost could replace smaller regional aircraft operated by airline partners like Jazz on some routes.

For example, one of several flights per day on a popular route could be converted to an Airbus plane, industry analysts were told Friday.

Rouge aircraft are also available to compete if necessary with ultra low-cost carriers like WestJet's new Swoop subsidiary, Flair Airlines or Canada Jetlines.

"We needed to have the capability of introducing a lower-cost competitive vehicle, both on offence and on defence," Air Canada CEO Calin Rovinescu said during a conference call about its 2017 results.

The increased use of Rouge planes domestically is permitted under changes to the collective agreement with pilots negotiated last year.

Several more Rouge planes are being added this summer and once all Boeing 787s are delivered next year there will be no limit on the number or type of single-aisle planes that can be flown by Rouge.

Ben Smith, president of passenger airlines at Air Canada, said Rouge Airbus A320s and 321s can be converted to high density single class cabins or possibly another airplane type such as the Boeing 737 Max.

Rovinescu also told analysts that a joint venture with Air China expected to be concluded in the coming months would enable it to be more aggressive in the competitive Pacific market.

The joint venture would expand the relationship beyond the use of lounges and codesharing as it faces pressures on flights to China and Hong Kong.

"It should certainly be an assistance to us in competing more aggressively," Rovinescu said.

Meanwhile, Air Canada announced Friday a new $250-million cost-cutting plan to be implemented by the end of 2019. That follows the completion of a $500-million plan launched in 2009 that eventually netted about $575 million in savings.

Deadly dog food?

The J.M. Smucker Co. is withdrawing some shipments of dog food amid reports that it could be tainted with traces of a drug used to euthanize animals.

The company said Thursday it is pulling back shipments of several varieties of wet canned Gravy Train , Kibble 'N Bits , Skippy and Ol' Roy brands. It said it is investigating how the euthanasia drug pentobarbital got into its supply chain and is focusing on a single supplier of a minor ingredient used at one manufacturing facility.

The recalls come after WJLA-TV in Washington, D.C., said it tested 15 cans of Gravy Train. It found nine cans, or 60 per cent of the sample, tested positive for pentobarbital.

Smucker cited experts noting that the low levels of the drug cited in the report do not pose a threat to pets.

"However, the presence of this substance at any level is not acceptable to us and not up to our quality standards," said the company, which is based in Orrville, Ohio. It said it does not use meat from euthanized animals in its pet food.

Enbridge earnings slide

Enbridge Inc. is reporting that special items pushed its fourth quarter net income down to $207 million, a 42 per cent decline from the year-earlier period.

As a result, the Calgary-based pipeline and utility company's net income per share was 13 cents per share, well below analyst estimates.

The special items included a non-cash accounting charge from the write down of assets held for sale of $2.8 billion after tax, partially offset by a $2.0 billion non-cash accounting benefit resulting from U.S. Tax Reform.

Excluding the special items, however, Enbridge's adjusted earnings were above estimates at $1.01 billion or 61 cents per common share.

Analysts had estimated 55 cents per share of net income and 56 cents per share of adjusted earnings, according to data from Thomson Reuters.

Record revenue at Air Can

Air Canada's fourth-quarter revenue and adjusted earnings came in ahead of analyst estimates, as the Montreal-based airline posted record-high annual revenue for 2017.

Its adjusted net income was $61 million, or 22 cents per share for the quarter — ahead of analyst estimates of 14 cents per share, according to Thomson Reuters data.

The airline's operating revenue was $3.82 billion in the fourth quarter, up from $3.43 billion a year earlier and above the estimate of $3.745 billion.

Net income was $8 million or two cents per share for the three months ended Dec. 31, which was an improvement over a 2016 fourth-quarter loss of $179 million but lower than expected.

Analysts had estimated 15 cents per share of net income.

"Overall, we liked what we saw in the Q4 results," wrote analyst Walter Spracklin of RBC Dominion Securities in a note to clients.

He added that Air Canada's new guidance shows its costs will be higher in the first quarter and full year than the RBC estimate, and includes a number of one-time costs.

Spracklin said analysts would be looking for more information about management's margin expectations for 2018, which weren't mentioned in the press release.

ATB forecast: modest growth

Alberta's Crown-owned bank is forecasting moderate economic growth this year, but no big drop in the province's jobless rate.

ATB Financial is projecting GDP will increase by 2.8 per cent.

Chief Economist Todd Hirsch says that is better than the recession years of 2015 and 2016, but not as strong as 2013 and 2014 before the economic downturn.

Hirsch says the unemployment rate is expected to come down gradually from 7.9 per cent to about 6.8 per cent.

He says U.S. oil prices have strengthened, but Alberta isn't benefiting because there isn't enough pipeline capacity to get the province's heavier crude to markets.

ATB says non-energy industries such as agriculture, tourism and technology are expected to perform well this year.

Housing prices are projected to improve, but housing starts will remain the same or decrease slightly.

"We’re expecting 2018 to be okay for the housing market, probably some modest price increases as some optimism comes back," he said Thursday.

"However, pulling against that is changes in the mortgage lending. That is going to restrict some buyers from getting into the market or it’s going to force them to look at lower priced properties." 

Big cuts at Global News

Corus Entertainment cut nearly 80 jobs, mostly in traditional TV production, at Global News newsrooms across Canada as part of a restructuring geared toward boosting online coverage.

Global News will add about 50 new positions, mostly journalists who will file for new, local versions of the company's news website in Ottawa, Kitchener, Guelph and Barrie, the company said in a story posted on Global News online. The company already operates 18 local websites.

“With digital platforms, our audience no longer is tied to just the locations where we have TV and radio licences, so we will be adding journalists to cover local news in markets where we see opportunity created by the recent closure or consolidation of local newspapers," said Troy Reeb, senior vice-president of Global News and Corus Radio.

Employees who lost their jobs and qualify will be given the opportunity to apply for the new positions, the company said.

The company also plans to expand its international content and launch a podcast production team.

Unifor, a union representing some Global employees, said 69 of its members who worked as reporters, anchors, camera operators, control room staff, make-up artists and other production crew lost their jobs.

In Vancouver, 21 employees — the most of any local operation — were laid off, Unifor said.

In Halifax, the studio will no longer produce the Nova Scotia and New Brunswick evening news, said David MacPherson, president of the Maritimes unit of Unifor local M1, which represents workers at Global.

It will be anchored and broadcast from Toronto as of Monday, he added.

"Our studios will be empty after the morning show ends at 9 a.m."

The company's broadcast revenues continue to shrink, Unifor said, and the outlook is bleak if the government fails to act now. It called on Canada's broadcast regulator to make strong local coverage a binding condition of having a license.

“The CRTC paved the way for the cuts announced today by watering down the obligations for big media companies like Corus to protect local news and it’s proving disastrous," said Jerry Dias, Unifor's national president, in a statement.

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