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Regulator issued no fines over airlines' denying compensation for cancelled flights

Regulator issued no fines

Three years after new rules came into force, the regulator overseeing Canadian airlines has not issued any fines related to passenger compensation claims for flight delays and cancellations.

Air passenger rights advocate Gabor Lukacs says that reveals a reluctance by the Canadian Transportation Agency to exercise its authority on consumers' behalf.

The lack of fines so far comes despite a flood of complaints made by travellers both formally and through social media who say their claims for compensation were rejected after airlines cancelled or held up their trips amid the airport chaos of the past few months.

The country's passenger rights charter mandates airlines to pay up to $1,000 for cancellations or significant delays that stem from reasons within the carrier's control when the notification comes 14 days or less before departure.

But carriers including Air Canada and WestJet have denied payments on the basis of crew shortages, deeming the reason a safety issue exempt from compensation, despite the agency's stance that lack of staff typically falls within the airline's control and therefore should result in compensation.

The Canada Transportation Act grants the agency the power to probe companies and individuals that it believes have breached the legislation, allowing it to demand documents, search premises and issue fines of up to $25,000.





Hootsuite to lay off 30 per cent of staff, begin global restructuring

Hootsuite to lay off 30%

Hootsuite Inc. says it will lay off 30 per cent of its staff as part of a global restructuring.

The Vancouver-based social media business did not say what triggered the job cuts, but tech companies as large as Shopify, Netflix and Clearco have conducted similar layoffs in recent weeks as investor interest in tech stocks has faded.

Hootsuite CEO Tom Keiser says the move will help the company once considered a darling in Canada's tech scene to realign itself with strategies that can make it successful.

He says Hootsuite needs to refocus, so it can drive efficiency, growth and financial sustainability.

He declined to answer questions about the departments, exact number of staff and offices impacted.

However, he said, "Today our focus is on our people, both those who are leaving us and those who are staying, and ensuring our customers continue to receive the support they need."



Southwest flight attendant suffers broken back in hard landing in California

Broke back in hard landing

A Southwest Airlines flight attendant suffered a compression fracture to a vertebra in her upper back during a hard landing last month in California, according to federal safety investigators.

The National Transportation Safety Board said the impact of landing was so hard that the flight attendant thought the plane had crashed. She felt pain in her back and neck and could not move, and was taken to a hospital where she was diagnosed with the fracture.

The safety board completed its investigation without saying what caused the hard larding.

The NTSB said none of the other 141 people on board the plane were injured in the incident at John Wayne Airport in Santa Ana, California.

The pilots told investigators that they were aiming for the normal touchdown zone on the relatively short runway.

“However, it ended up being a firm landing,” the NTSB said in its final report, dated Friday.

Dallas-based Southwest said in a statement Monday, “We reported the matter to the NTSB in accordance with regulatory requirements and conducted an internal review of the event.”

A spokeswoman for the airline declined to provide further information when asked about the result of the internal investigation and whether the plane was inspected for evidence of damage that could occur during a hard landing. The plane has been making several flights a day, according to tracking services.

Shortly after the 18-year-old Boeing 737-700 taxied off the runway, the pilots — a 55-year-old captain and 49-year-old co-pilot — were told about the injury to the flight attendant, who was in a jump seat at the back of the plane.

The NTSB, which did not travel to the accident site, has not made its documents from the investigation publicly available.

The runway that the plane landed on is only 5,700 feet long. By comparison, runways at nearby Los Angeles International Airport range between 8,900 and nearly 13,000 feet.

The NTSB investigation was reported earlier by The Dallas Morning News.



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B.C.’s Big 3 lumber giants still making bank

Lumber giants making bank

B.C.’s big three forestry giants had lumber and other wood product sales of $6.5 billion in the second quarter of 2022, and net income of $1.4 billion, according to second quarter financials.

While second quarter earnings were down compared to Q1, due to lower lumber prices, demand and prices for lumber were still strong in the second quarter.

B.C.’s biggest forestry company, West Fraser Timber (TSX, NYSE:WFG), reported sales of $2.9 billion in the second quarter, and earnings of $762 million, which was down from $1 billion in earnings in the first quarter.

Canfor Corp. (TSX:CFP) reported Q2 sales of $2.2 billion and net income of $373 million.

Interfor Corp. (TSX:IFP) reported sales of $1.4 billion and net income of $270 million.

West Fraser rewarded shareholders with a major share buyback worth $1.5 billion.

“West Fraser generated strong financial results again in the second quarter of 2022, supporting the return of more than $1.5 billion of capital to shareholders through share repurchases and our quarterly dividend,” said West Fraser CEO Ray Ferris.

In the first few months of 2022, North American lumber prices hit record highs of $1,700 per thousand board feet, according to Trading Economics.

Western spruce-pine-fir lumber was selling at around $1,300 per thousand board feet earlier this year, according to Natural Resources Canada. Those prices are now down to about $680 per thousand board feet – still well above the long-term average of about US$300 per board feet ($385 Canadian.)

Interfor notes in its financials that of the 1 billion board feet of lumber it produced in Q2, about one-quarter was from its new Eastern Canadian operations – 211 million board feet. Its American sawmills accounted for 630 million board feet.

“Production in the B.C. region decreased to 174 million board feet from 196 million board feet in Q1’22, in part due to the sale of the Acorn sawmill during the quarter,” Interfor notes.

With the sale of its Acorn mill in Delta to an affiliate of San Industries Ltd., Interfor is now reviewing its coastal timber holdings.

“Interfor is currently undertaking a strategic review of its remaining Coastal B.C. operations, which consist solely of timber harvesting and sales related to its 1.67 million cubic meters of annual harvesting rights,” the company said.

Despite fears of a cooling North American economy, Canfor says in its Q2 financials that it expects lumber fundamentals to remain strong into the third quarter.

“Looking ahead, global lumber market fundamentals are anticipated to be relatively solid through the third quarter of 2022," the company says. "New home construction activity in North America is projected to weaken in the wake of high mortgage rates and decreasing housing affordability, particularly for first-time homebuyers, while activity in the repair and remodeling sector is estimated to be steady.”

In its Q2 financials, Canfor reported paying $96 million in American softwood lumber duties for the first half of 2022. Interfor reports paying $82 million in American duties in the first half of 2020; West Fraser reports paying $43 million.
 



FAA clears Boeing to resume deliveries of 787 Dreamliner

FAA clears Boeing plane

Federal regulators said Monday they are satisfied with changes Boeing has made in the production of its 787 Dreamliner passenger jet, clearing the way for the company to resume deliveries to airline customers “in the coming days.”

The Federal Aviation Administration announcement confirmed reports late last month and came days after the agency's acting chief met with safety inspectors who oversee Boeing.

The FAA said acting Administrator Billy Nolen wanted to hear about steps Boeing has taken to fix manufacturing problems and ensure independence for Boeing employees who work with regulators.

Production of the big, two-aisle 787 has been marred by several problems including gaps between panels of the carbon-composite skin, and use of unapproved titanium parts from a supplier in Italy. Those issues prevented Boeing from delivering any of the planes for most of the last two years, and about 120 have been parked while Boeing tried to fix the production process.

The FAA said it will inspect each plane before it is approved for delivery.

“We expect deliveries to resume in the coming days,” the FAA said.

Shares of Boeing Co., which is based in Arlington, Virginia, were up 1.8% in afternoon trading Monday.



Nutrien names Ken Seitz president, CEO amid sweeping changes in agriculture markets

Nutrien names new CEO

Saskatoon-based fertilizer giant Nutrien Ltd. has named Ken Seitz president and CEO following a months-long global talent search.

The company says Seitz, who has served as interim CEO since January and previously headed up its potash operation, brings 25 years of experience in agriculture and mining to the role.

Nutrien says it has achieved record results under Seitz's leadership amid sweeping changes in agricultural markets and unprecedented global food security challenges.

Russ Girling, chairman of Nutrien's board of directors, says the company's record performance during some of the most turbulent times in the sector underscore the strength of Seitz’s leadership.

Seitz, who grew up on a dairy farm in Saskatchewan, says he's "honoured and humbled" to work alongside growers during challenging times.

He says Nutrien is well positioned to help meet the global goals of food security and climate action.



Barrick Gold reports US$488 million second quarter profit

Barrick profits jump

Barrick Gold Corp. reported a second-quarter profit of US$488 million, up nearly 19 per cent from US$411 million in the same quarter last year.

The gold miner, which keeps its books in U.S. dollars, says the profit amounted to 27 cents per diluted share for the quarter ended June 30 compared with 23 cents per share a year ago.

Revenue for the quarter totalled US$2.86 billion, down from US$2.89 billion in the second quarter last year.

Gold production in the quarter was 1,043,000 ounces, up from 1,041,000 in the same quarter of 2021, while its average realized gold price rose to US$1,861 an ounce compared with US$1,820 a year ago.

On an adjusted basis, Barrick says it earned 24 cents per share, down from 29 cents per share a year ago.

President and chief executive Mark Bristow says the company has continued to take steps to increase its sustainability.

“There are challenging times ahead, but Barrick faces them with strong and agile leadership, a robust balance sheet, solid Life of Mine plans, a reliable cash flow and a strategy focused on sustainability and value creation," he said in a statement.



Unifor members to elect new national president in Toronto this week

Unifor to pick new leader

Unifor members from across Canada are gathering in Toronto this week to elect the union's next leader, several months after former national president Jerry Dias stepped down.

Monday will kick off the start of the union's fourth constitutional convention where elections for Dias' successor, the next secretary-treasurer and regional directors will take place throughout the week.

Delegates will also vote on key priorities and initiatives.

Earlier this year, Dias was charged with violating the code of ethics and democratic practices of the union's constitution.

Dias had long been the face of Unifor.

He led the union since 2013 and was reelected in 2016 and 2019.

He had a reputation for being tough-talking, scrappy and willing to push everyone from top companies to politicians to act in workers' best interests, and was a key figure during the negotiation of the United States-Mexico-Canada Agreement. He also successfully encouraged General Motors Canada to reopen a plant in Oshawa, Ont., invest up to $1.3 billion and hire up to 1,700 workers after it planned to close the facility.

Unifor has more than 315,000 members.



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

This week in business

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

Resources sector update

Miner Barrick Gold Corp. reports its second-quarter earnings this week, followed by Lundin Mining Corp. on Tuesday. Barrick released an update last month indicating it is on track to achieve its production targets for the year even as copper prices pulled back. Lundin is likely to face questions after a sinkhole was detected at a Chilean mining site last week.

State of commercial real estate

Several REITs are scheduled to release second-quarter financial results, with RioCan real estate investment trust set for Tuesday. Public health restrictions on shops and restaurants made the pandemic a difficult time for the sector, but RioCan CEO Jonathan Gitlin said in June that he's now seeing much less ambiguity in the retail sector.

Food inflation and grocers

Expect to learn more about how food inflation is affecting the bottom line for Canadian grocery stores when Metro Inc. releases its third-quarter results on Wednesday. Metro competitor Loblaw said last month that its customers were less eager to spend on its Joe Fresh clothing line and other non-food products.

Entertainment budgets

Cineplex Inc. is scheduled to report its second-quarter results and discussion with analysts on Thursday. The cinema and entertainment company saw a significant revenue climb in the first three months of the year compared with 2021, when many movie theatres were closed or operating at reduced capacity.

Investors keep eye on Brookfield

Investors will be keeping a close eye as Brookfield Asset Management Inc. reports its latest quarterly earnings before the bell on Thursday. In May, while releasing its Q1 results, the company announced it would be spinning off its asset management business into a separate publicly listed company.



Air Canada denying passenger compensation claims for staff shortages, citing safety

Denying compensation

Less than four hours before departure, Ryan Farrell was surprised to learn his flight from Yellowknife to Calgary had been cancelled.

Air Canada cited "crew constraints" and rebooked him on a plane leaving 48 hours after the June 17 flight's original takeoff time.

Farrell was even more surprised six weeks later, when he learned his request for compensation had been denied on the basis of the staff shortage.

“Since your Air Canada flight was delayed/cancelled due to crew constraints resulting from the impact of the COVID-19 pandemic on our operations, the compensation you are requesting does not apply because the delay/cancellation was caused by a safety-related issue,” reads the email from customer relations dated July 29.

The rejection “feels like a slap in the face," Farrell said.

"If they don't have replacement crew to substitute in, then the flight (was) cancelled because they failed to assemble a crew, not because any other factor would have made it inherently unsafe to run the flight,” he said in an email.

“I think the airlines are trying to exploit a general emotional connection that people make between ‘COVID-19’ and ‘safety,’ when in reality if you put their logic to the test it doesn't stand up.”

Air Canada’s response to Farrell's complaint was no outlier. In a Dec. 29 memo, the company instructed employees to classify flight cancellations caused by staff shortages as a "safety" problem, which would exclude travellers from compensation under federal regulations. That policy remains in place.

Canada’s passenger rights charter, the Air Passenger Protection Regulations (APPR), mandates airlines to pay up to $1,000 in compensation for cancellations or significant delays that stem from reasons within the carrier’s control when the notification comes 14 days or less before departure. However, airlines do not have to pay if the change was required for safety purposes.

The Canadian Transportation Agency (CTA), a quasi-judicial federal body, says treating staff shortages as a safety matter violates federal rules.

"If a crew shortage is due to the actions or inactions of the carrier, the disruption will be considered within the carrier’s control for the purposes of the APPR. Therefore, a disruption caused by a crew shortage should not be considered 'required for safety purposes' when it is the carrier who caused the safety issue as a result of its own actions," the agency said in an email.

That stance reinforces a decision made July 8 — three weeks before Farrell learned he'd been denied compensation — when the CTA used nearly identical language in a dispute over a flight at a different air carrier. The regulatory panel's ruling in that case emphasized airlines' obligations around advance planning "to ensure that the carrier has enough staff available to operate the services it offers for sale."

In the December memo, which was issued at the height of the Omicron wave of COVID-19, Air Canada said: "Effective immediately, flight cancellations due to crew are considered as Within Carrier Control — For Safety."

"Customers impacted by these flight cancellations will still be eligible for the standard of treatments such as hotel accommodations, meals etc. but will no longer be eligible for APPR claims/monetary compensation."

The staff directive said the stance would be “temporary.” But Air Canada acknowledged in an email on July 25 that the policy "remains in place given the continued exceptional circumstances brought on by COVID variants."

Gabor Lukacs, president of the Air Passenger Rights advocacy group, said Air Canada isbreaching the passenger rights charterand called on the transport regulator for stronger enforcement.

"They are misclassifying things that are clearly not a safety issue," he said of Canada's largest airline, calling the policy "egregious" and "unlawful."

Consumers can dispute an airline's denial of a claim via a complaint to the CTA. However, the agency's backlog topped 15,300 air travel complaints as of May.

Lukacs also noted that European Union regulations do not exclude safety reasons from situations requiring compensation in the event of cancellations or delays. Payouts are precluded only as a result of "extraordinary circumstances," such as weather or political instability.

"This document, along with the previous declarations and behaviour since the beginning of the pandemic, shows that Air Canada’s priority is clearly to try to limit the costs of the flight cancellations instead of providing good service to its clients," Sylvie De Bellefeuille, a lawyer with Quebec-based advocacy group Option consommateurs, said after reviewing a copy of the directive.

She said Air Canada aims to deter passengers from requesting compensation in the first place. "This tactic does not, in our opinion, demonstrate that the company cares about its customers."

Air Canada disagrees with that characterization.

"Air Canada had and continues to have more employees proportionate to its flying schedule when compared prior to the pandemic," the company said in an emailed statement, indicating it had done everything it could to prepare for operational hiccups.

"Air Canada follows all public health directives as part of its safety culture, and during the Omicron wave last winter that affected some crew availability, we revised our policy to better assist customers in their travels with enhanced levels of customer care for flight cancellations related to crew contending with COVID."

John Gradek, head of McGill University's aviation management program, said the transportation agency is partly responsible for the "debacle" because it established looser rules than those in Europe and the United States.

"Carriers have been making strong efforts to point fingers and claim delays are outside of their control to reduce liability," he said in an email.



Air Canada denying passenger compensation claims for staff shortages, citing safety

Air Canada denies claim

Less than four hours before departure, Ryan Farrell was surprised to learn his flight from Yellowknife to Calgary had been cancelled.

Air Canada cited "crew constraints" and rebooked him on a plane leaving 48 hours after the June 17 flight's original takeoff time.

Farrell was even more surprised six weeks later, when he learned his request for compensation had been denied on the basis of the staff shortage.

“Since your Air Canada flight was delayed/cancelled due to crew constraints resulting from the impact of the COVID-19 pandemic on our operations, the compensation you are requesting does not apply because the delay/cancellation was caused by a safety-related issue,” reads the email from customer relations dated July 29.

The rejection “feels like a slap in the face," Farrell said.

"If they don't have replacement crew to substitute in, then the flight (was) cancelled because they failed to assemble a crew, not because any other factor would have made it inherently unsafe to run the flight,” he said in an email.

“I think the airlines are trying to exploit a general emotional connection that people make between ‘COVID-19’ and ‘safety,’ when in reality if you put their logic to the test it doesn't stand up.”

Air Canada’s response to Farrell's complaint was no outlier. In a Dec. 29 memo, the company instructed employees to classify flight cancellations caused by staff shortages as a "safety" problem, which would exclude travellers from compensation under federal regulations. That policy remains in place.

Canada’s passenger rights charter, the Air Passenger Protection Regulations (APPR), mandates airlines to pay up to $1,000 in compensation for cancellations or significant delays that stem from reasons within the carrier’s control when the notification comes 14 days or less before departure. However, airlines do not have to pay if the change was required for safety purposes.

The Canadian Transportation Agency (CTA), a quasi-judicial federal body, says treating staff shortages as a safety matter violates federal rules.

"If a crew shortage is due to the actions or inactions of the carrier, the disruption will be considered within the carrier’s control for the purposes of the APPR. Therefore, a disruption caused by a crew shortage should not be considered 'required for safety purposes' when it is the carrier who caused the safety issue as a result of its own actions," the agency said in an email.

That stance reinforces a decision made July 8 — three weeks before Farrell learned he'd been denied compensation — when the CTA used nearly identical language in a dispute over a flight at a different air carrier. The regulatory panel's ruling in that case emphasized airlines' obligations around advance planning "to ensure that the carrier has enough staff available to operate the services it offers for sale."

In the December memo, which was issued at the height of the Omicron wave of COVID-19, Air Canada said: "Effective immediately, flight cancellations due to crew are considered as Within Carrier Control — For Safety."

"Customers impacted by these flight cancellations will still be eligible for the standard of treatments such as hotel accommodations, meals etc. but will no longer be eligible for APPR claims/monetary compensation."

The staff directive said the stance would be “temporary.” But Air Canada acknowledged in an email on July 25 that the policy "remains in place given the continued exceptional circumstances brought on by COVID variants."

Gabor Lukacs, president of the Air Passenger Rights advocacy group, said Air Canada is exploiting a loophole in the passenger rights charter to avoid paying compensation, and called on the transport regulator for stronger enforcement.

"They are misclassifying things that are clearly not a safety issue," he said of Canada's largest airline, calling the policy "egregious."

Consumers can dispute an airline's denial of a claim via a compliant to the CTA. However, the agency's backlog topped 15,300 air travel complaints as of May.

Lukacs also noted that European Union regulations do not exclude safety reasons from situations requiring compensation in the event of cancellations or delays. Payouts are precluded only as a result of "extraordinary circumstances," such as weather or political instability.

"This document, along with the previous declarations and behaviour since the beginning of the pandemic, shows that Air Canada’s priority is clearly to try to limit the costs of the flight cancellations instead of providing good service to its clients," Sylvie De Bellefeuille, a lawyer with Quebec-based advocacy group Option consommateurs, said after reviewing a copy of the directive.

She said Air Canada aims to deter passengers from requesting compensation in the first place. "This tactic does not, in our opinion, demonstrate that the company cares about its customers."

Air Canada disagrees with that characterization.

"Air Canada had and continues to have more employees proportionate to its flying schedule when compared prior to the pandemic," the company said in an emailed statement, indicating it had done everything it could to prepare for operational hiccups.

"Air Canada follows all public health directives as part of its safety culture, and during the Omicron wave last winter that affected some crew availability, we revised our policy to better assist customers in their travels with enhanced levels of customer care for flight cancellations related to crew contending with COVID."

John Gradek, head of McGill University's aviation management program, said the transportation agency is partly responsible for the "debacle" because it established looser rules than those in Europe and the United States.

"Carriers have been making strong efforts to point fingers and claim delays are outside of their control to reduce liability," he said in an email.



Vancouver junior miner to pay fine for advertorial

Mining firm fined for ad

A Vancouver-based junior mining company focused on a lithium salar mine project in Chile and a former CEO of the company have agreed to pay $35,000 in penalties for misleading advertising.

According to the British Columbia Securities Commission (BCSC), Bearing Lithium Corp. (TSX-V:BRZ) misled potential investors through an advertorial promoting the company and its lithium project without properly disclosing that Bearing had paid for the promotion.

The company had hired Stock Social Inc. to write an advertorial that was published and posted on newswires, and on Twitter, LinkedIn, Facebook, investFeed and iHub, according to the BCSC.

“The advertorial was written to look and read like objective journalistic content, but did not disclose that it was issued on behalf of Bearing, nor did any of the social media posts make such disclosures," the BCSC says in a press release.

That is a violation of the Securities Act, which requires anyone engaged in investor relations on behalf of a publicly traded company “to clearly and conspicuously disclose when promotional materials are issued by them or on their behalf.”

Bearing admitted it had violated the Securities Act by failing to disclose promotional materials had been issued on Bearing’s behalf. Former Bearing CEO Jeremy Arthur William Poirier admitted his involvement in the misleading promotion.

In a settlement with the BCSC, Bearing agreed to pay $25,000 in fines. Poirier was ordered to pay a $10,000 fine.

Bearing owns a 17% stake in the Maricunga project in Chile, a lithium brine salar. Australia’s Lithium Power International owns 51%. At the end of June, Lithium Power and Bearing announced an agreement in which Lithium Power will acquire 100% of the Maricunga project from Bearing and MSB SpA, a Chilean company that owns 31% of the project.

Chile has the world's largest known lithium reserves. Lithium is a critical component of lithium-ion batteries.
 



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