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Battle for your breakfast buck: Fast food attacks cereal's supremacy

Written By doni icha on Minggu, 21 September 2014 | 22.39

The invention of cereal more than 100 years ago transformed the average breakfast from a heavy, fat-laden pancakes-and-meat smorgasbord into a lighter, quick meal. However, after decades of dominating the breakfast tables of North Americans, cereal sales are falling and fast-food restaurants are trying to cash in on Canadians' craving for an even more convenient morning meal.

"Canadians are motivated by convenience," said Robert Carter, executive director of market research company NPD Group, adding that they visit drive-thrus far more than Americans.

That has helped drive the massive success of the breakfast sandwich in this country. It's the single-fastest growing menu item not just in the breakfast category, but Canada's entire restaurant market over the past five years, says Carter, and it's changing our morning habits.

Portable food you can eat on the run or at your desk is part of the breakfast war heating up between fast-food outlets as they vie to sell time-strapped customers a quick and easy breakfast, although the latest offerings are really an extension of an old concept. McDonald's pushed the breakfast sandwich into the mainstream when it began selling Egg McMuffins in 1971 and followed it with a breakfast menu five years later. 

The chain remains "best in class" when it comes to tapping into that breakfast market, says David Henckes, vice-president of food industry consultancy Technomic. Breakfast now accounts for 15 to 20 per cent of the chain's revenue, he says.

Other restaurants followed suit in the 1980s, but it's only in recent years that the breakfast and coffee battle has really heated up and attracted a slew of new competitors to the fray. 

In Canada, Tim Hortons currently sits in the top fast-food slot when it comes to breakfast. Analysts suggest its recent purchase by Burger King is part of the hamburger giant's attempts to tap into the burgeoning breakfast market south of the border as well as increase its presence here.

Restaurant breakfast sales began a marked increase during the 2008 economic downturn. While Canadians were avoiding spending on pricey sit-down dinners, many instead treated themselves to morning fast-food meal, says Carter.

As restaurants have increased their marketing efforts and expanded their offerings in recent years, the number of Canadians eating in the morning has been rising.

Companies also saw an opportunity to boost sales because breakfast used to be the No. 1 meal Canadians skipped. As restaurants have increased their marketing efforts and expanded their offerings in recent years, the number of Canadians eating in the morning has been rising.

"All that growth from that skipped meal has come from Canadians eating breakfast out of home," said Carter.

Food historian Ian Mosby says the rising demand for morning sandwiches may also be partly the result of a larger cultural change in what's perceived as "evil" in our diets. 

Whereas healthy eaters once worried about the perils of fat, they now concern themselves with the ills of sugar. Awareness of the dangers of added sugar has been rising in recent years as medical experts sounded alarms over the high levels of sugar in numerous products, such as cereals, yogurts, juices and baked goods. 

At its core, the breakfast sandwich marks the return to the type of morning meals people used to eat decades ago when a plate full of eggs, toast and meat dominated North American tables. Except this time, it's portable.

"Eggs went from being the No. 1 danger with cholesterol and suddenly the scientific consensus has shifted, and eggs are not dangerous and sugar is increasingly becoming the thing that people are worried about," said Mosby.

breakfast-sandwich-fast-food

Breakfast sandwiches are the single fastest-growing menu item in Canada in the past five years. (Shutterstock)

"Cereal has been getting a bad rap lately in terms of the sugar content," adds Janis Thiessen, a historian at University of Winnipeg who teaches a food history course and studies junk food.

She recalls eating Shreddies as a child. "We would add sugar to it because we thought of Shreddies as this sugarless cereal," said Thiessen. "As opposed to Cap'n Crunch, it was the healthy alternative.

"And then you go read the label as an adult and realize, 'Oh my gosh, there's tons of sugar in this stuff.'"

Those revelations are part of what's eating into the profits of the world's biggest cereal maker, Kellogg, and others. The company's earnings fell 16 per cent in the last quarter this year, the fifth consecutive quarterly sales decline. Rival General Mills is also struggling.

But Kellogg CEO John Bryant sees the decline in a different light. "It's more to do with protein seeking as opposed to avoiding items," he said in a recent interview with CNBC. 

The longtime cereal maker is rejigging its lineup to offer up more protein-laden cereals and gluten-free options. 

Despite the growing pressure from fast food chains, NPD Group's Carter agrees that do-it-yourself at-home breakfasts are not about to disappear. Single-serving coffee machines, yogurt and smoothies are en vogue — "all those convenient ready-to-consume" meals and drinks, he says.

But convenience is clearly the key. NPD Group research indicates that Canadians now typically take five minutes or less to prepare their in-home breakfasts.

"Even toast is declining because you've gotta push the button on the toaster," laughs Carter.

And whether people are eating at home or grabbing a breakfast sandwich en route to the office, the convenience factor appears to be changing Canadians' overall eating habits, according to NPD Group. Breakfast is no longer the No. 1 most-skipped meal - lunch now holds that dubious honour.


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What's in store for Scotland? Ask Quebec: Don Murray

For those with long memories, the morning after in Scotland — indeed the final days of the heated campaign — seemed an eerie replay of Quebec's first referendum in 1980.

There are differences, of course, some of them major, but consider: the loser, in conceding, hints at another referendum. 

Alex Salmond, the Scottish National Party First Minister, said the people had not chosen independence "at this stage."  Thirty-four years ago PQ Quebec premier René Lévesque conceded, saying, "If I've understood you, 'till the next time!"

Meanwhile, the winners wait until the last minute to promise huge constitutional  change. 

In 1980 the man with the promise was Prime Minister Pierre Trudeau.  In Scotland it was another native son, this time former Prime Minister Gordon Brown. He thundered into the campaign and galvanized the "No" camp with passionate speeches and a sweeping promise of "devo max" – maximum devolution, or in other words a major transfer of powers from London to the Scottish Assembly.

SCOTLAND-INDEPENDENCE-Referendum

British Prime Minister David Cameron followed up Friday morning's news of the No vote in Scotland with a speech in front of 10 Downing Street promising fast-track reform. (Suzanne Plunkett/Reuters)

Brown had the green light from British Prime Minister David Cameron, who followed it up Friday morning with a speech in front of 10 Downing Street promising fast-track reform, with an outline constitutional bill ready by January.

But Britain, unlike Canada, has a misshapen federal structure which appears to have been worked out on the back of an envelope — or rather, two. 

The first envelope was the Barnett formula, which dictates how much England, Scotland, Wales and Northern Ireland get in grants from the British treasury. 

To put it in Canadaspeak, it's an equalization formula. And the big winners are Scotland and Northern Ireland, while England pays out.

The Barnett formula was the brainchild of a Labour minister in the 1970s.  Twenty years later a Labour prime minister, Tony Blair, decided to offer assemblies and limited powers to three of the four nations making up the United Kingdom – Scotland, Wales and Northern Ireland.  England, by far the biggest nation, got nothing — but then, so the somewhat muddled thinking apparently went, it already had most of the power in the British parliament. 

Scotland referendum Yes voters react

The SNP could win another Scottish Assembly election and rule for another five years - it's still Scotland's most popular party. (Cathal McNaughton/Reuters)

Now that devo max is on the table, the English backlash is growing. To be precise, the English backlash among ruling Conservative MPs. They complain bitterly that Scotland, and Salmond's SNP, shouldn't be rewarded for trying to break up the union. The Barnett equalization formula should, they say, be retired. The Scots have lived high off the hog for too long.

The Scots, or at least the SNP, reply that the Barnett formula has never properly compensated them for all the North Sea oil money London has pocketed over the years.

The backlash has a second string. Why, the Conservative MPs mutter, should Scottish MPs in London be allowed to vote on issues that affect England such as its health service and education? In Scotland these questions are reserved for members of the Scottish Assembly only. 

A recent poll showed that that view was shared by more than 60 per cent of English voters.

One British leader who has been listening is Cameron himself. Friday morning he said, "We have heard the voice of Scotland and now the millions of voices of England must also be heard. The question of English votes for English laws … requires a decisive answer."

That could set the cat among the Scottish pigeons, with the SNP and its followers complaining that the promise of constitutional reform is simply a cloaked stick with which to beat the uppity Scots.

At the same time, amazingly for a country where all tax powers were completely centralized until 15 years ago, the main British parties in London are now talking about turning huge chunks of tax power over to Scotland's assembly. The corollary would be the retirement of the Barnett equalization formula. 

Scotland

In an amazing move for a country where all tax powers were completely centralized until 15 years ago, the main British parties in London are now talking about turning huge chunks of tax power over to Scotland's assembly.

It feels like another back-of-the envelope moment, with little thought being given to what powers Wales and Northern Ireland should have, let alone England.

It seems safe to say that whatever is offered, the SNP will say it's not enough.  Devo max, for them, would be total control over taxes – independence by the back door. 

And, like the Parti Québécois more than 30 years ago, the SNP could win another Scottish Assembly election and rule for another five years. It's still Scotland's most popular party.

And then … well, remember where Trudeau's promises of constitutional reform led.  To the repatriation of the Canadian constitution, angrily refused by the Quebec government of Lévesque. 

Then another prime minister, Brian Mulroney, tried to cobble together a deal to satisfy Quebec.  This was the Meech accord, which unravelled.

It was followed by the Charlottetown accord and a countrywide referendum, which rejected the whole deal roundly. 

Three years after that, in 1995, a third prime minister, Jean Chrétien, found himself facing the potential meltdown of this country in a second Quebec referendum.

The Brits clearly don't know what they're letting themselves in for.


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NFL sponsors pulling back, but not out, over domestic violence scandal

As the number of corporate sponsors speaking out about the domestic violence allegations plaguing the NFL grows, so does the prospect the scandal might have real implications for the league that go beyond a mere image problem.

The latest company to take action over the issue was Procter & Gamble, which on Friday announced that its Crest brand wouldn't be supplying the pink mouth guards NFL players wear during Breast Cancer Awareness Month in October and cancelled all "on-field" marketing associated with the campaign.

Cover Girl ad NFL

An altered version of an ad for the Procter & Gamble brand Cover Girl that became part of a protest campaign online calling on people to boycott NFL sponsors over the domestic abuse scandal.

Public pressure on the global maker of everything from toothpaste to tampons ramped up after a Photoshopped version of one of its NFL-related ads showing a Cover Girl model with a black eye went viral. 

Procter & Gamble was the first NFL sponsor to pull its support at a national level. Most other corporate actions have been directed at individual players or teams, even though many analysts see the problem as closely tied to a culture of impunity in the whole NFL.

Ray Rice NFL video domestic violence

The domestic violence scandal blew up when a video surfaced on the gossip site TMZ showing Baltimore Ravens running back Ray Rice punching out his girlfriend in a hotel elevator. (Patrick Semansky/Associated Press)

"In general, the national reaction has been tepid," said Irwin Raij, a New York-based lawyer who has represented teams, leagues and sponsors in the sports industry and is co-chair of the sports practice division at Foley & Lardner. 

"I think what a lot of the sponsors are waiting to see is what changes will there be to [the NFL's] policy."

NFL commissioner Roger Goodell gave some indication of that in a news conference Friday in which he announced measures to raise awareness of domestic violence among players and take violations more seriously, but it remains to be seen whether it'll be enough to satisfy those calling for decisive action and a zero-tolerance policy on domestic violence.

Boycotts targeting players, not league

NFL Nike

Nike, which supplies the jerseys for the 32 NFL teams, has terminated its endorsement contract with Rice and suspended its contract with Minnesota Vikings running back Adrian Peterson, who has been charged with causing reckless or negligent injury to a child. (Rod Mar/Seattle Seahawks/Associated Press)

Since the release in early September of a video of Baltimore Ravens running back Ray Rice punching his then-fiancée, details of four other cases of domestic violence involving NFL players have come to light (see details at the bottom of this article).

But the massive corporations that invest millions of dollars in the NFL each season have been strategic in how they've chosen to distance themselves from the issue.

Nike, which spent $13 million US on NFL TV ads last season, according to Kantar Media, and supplies the jerseys for NFL teams, has terminated its endorsement contract with Rice and suspended that of Minnesota Vikings running back Adrian Peterson. Peterson is facing charges of causing reckless or negligent injury to a child while disciplining his four-year-old son with a switch, or tree branch.

Rice was dropped by EA Sports from its Madden NFL 15 video game, while Peterson lost the endorsement of Castrol Motor Oil. Merchandise for both was pulled from Target store shelves, and the Radisson hotel chain suspended its endorsement of the Vikings team over the Peterson case.

Most of the NFL's big sponsors, however, have stopped short of pulling ads from NFL telecasts and cancelling sponsorships altogether, instead issuing general statements condemning violence against women and children and urging the league to address the problem.

Anheuser-Busch, Verizon, Pepsi, Campbell Soup and McDonalds have all put out such statements in the last week.

$10B US entertainment business

Adrian Peterson NFL domestic violence

Adrian eterson has defended himself against allegations of child abuse, saying he whipped his son with a switch because that's how he was disciplined as a child. (Charlie Neibergall/Associated Press)

Morality clauses in players' contracts make it easier for sponsors to cut ties with individuals than with the league, said Robert Tuchman, president of New York-based sports and entertainment marketing company Goviva.

​Companies like Anheuser-Busch, which spent close to $200 million on NFL ads last season, and Pepsi, which spent around $100 million, have structured their annual marketing campaigns around the football season.

"To have to pull out now would wreck their third and fourth [financial] quarters," Tuchman said.

Even if sponsors did start pulling out, chances are they would not stay away for long.

U.S. professional football is a massive, $10-billion entertainment business, and live game telecasts —​ one of the last examples of television that audiences want to watch in real time — are a huge draw for advertisers, averaging 18 million viewers a game and more than 100 million for the Super Bowl. 

The NFL, dubbed "the league that owns everything" in a recent Wall Street Journal article, makes $1 billion to $2 billion a year off corporate sponsorships, according to Navigate Research.

Anheuser-Busch-NFL-domestic violence

Anheuser-Busch makes Bud Light, the 'official' beer of the NFL, and is one of the league's biggest sponsors, but has so far only issued statements expressing disappointment with the NFL's handling of the domestic violence issue. (Fred Prouser/Reuters)

"Sponsorship revenues impact a variety of things, including what the salary cap is going to be for players," said Raij. "So, the leagues really do need sponsors. They can't ignore them."

But sports economist John Vrooman of Vanderbilt University in Nashville said the NFL has multiple levels of sponsorship, so actions companies take against a player or team don't necessarily impact the league.

"It is entirely possible, if not common, for clubs and the league to cross sponsors," he said in an email interview with CBC News. "For example, Budweiser (owned by Anheuser-Busch) may be widely viewed as the chosen beer of the NFL, but Miller Lite is the chosen sponsor of the Dallas Cowboys."

Fans remaining loyal

The NFL is also insulated from the potential financial consequences of the recent scandal because of the "bullet-proof shield" provided by its lucrative broadcasting deal, worth $59 billion over nine years, and its 10-year labour contract with players, which caps their share of overall revenue at an average of 48 per cent through 2020, said Vrooman.

'The NFL is a well-oiled, perfectly diversified, recession- and bullet-proof, legalized cartel.'- John Vrooman, sports economist

"The NFL is a well-oiled, perfectly diversified, recession- and bullet-proof, legalized cartel," he said.

The cancelling of players' corporate endorsements simply underscores how little power players have compared to the league and owners and is a way for sponsors to protect themselves by "throwing their respective endorsers under the NFL bus," says Vrooman.

To truly hurt the league financially, the economic boycott would have to come from football fans, he said.

So far, it hasn't. NFL games remained among the top-rated prime-time shows on U.S. television even at the height of the scandal, and ticket sales did not seem to take a hit either.

"At this point, what you see is people speaking their minds, saying, 'There's something wrong here. You need to do better,' but it doesn't appear yet that the fans are walking away from the game," Raij said.

An opportunity to act

Still, the controversy has attracted a degree of attention that would not have been there just a few years ago, when social media was not as widespread and images off Rice's elevator punch and Peterson's son's injuries would not have been as widely circulated, said Tuchman.

"The fact that it is blowing up is a chance for the league to do something," he said.

Vrooman says the NFL's response to the allegations of player misconduct has been chaotic and reactionary, but he also sees the scandal as a potential turning point.

"[The] violence against women problem is not new to the NFL; nor is the league's ambivalence. This unique in-our-face episode is perhaps the beginning of a deeper accountability," he said.

The players behind the scandal

Ray Rice: Baltimore Ravens running back caught on a hotel elevator security video punching out his girlfriend. He was initially suspended for just two games, but was later released from the team and suspended indefinitely after the video surfaced online. He is appealing his suspension. The league has hired a former FBI director to investigate allegations that it knew about the elevator video as far back as April.

Adrian Peterson: Minnesota Vikings running back who is facing charges of child abuse for an incident in which he disciplined his four-year-old son with a switch. He was also initially cleared to keep playing, but after a public backlash, the NFL placed him on the exempt/commissioner's permission list, which means he gets paid but is barred from playing while the case is before the courts.

Greg Hardy: Carolina Panthers defensive end who was found guilty in July of assaulting and threatening his girlfriend. He is appealing the case and in the meantime has been placed on the exempt/commissioner's permission list.

Jonathan Dwyer: Arizona Cardinals running back who was arrested last Wednesday on charges of aggravated assault relating to two domestic violence incidents in July involving a  27-year-old woman and an 18-month-old child. He is out on bail and has been deactivated from all team activities.

​Ray McDonald: San Francisco 49ers defensive end who was arrested in August on felony domestic charges related to an altercation with his girlfriend and released on bail. He has continued to play, with the team's CEO saying he wanted to see clear evidence of wrongdoing before punishing the player.


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Flying fees backlash and hotel room tips debated: the business week in review

Roughly half of Scotland woke up Friday disappointed, while the other half rejoiced over its renewed, 307-year-old union with the United Kingdom.

Although opinion polls predicted a far more even split in the vote, the final result of Scotland's referendum was still a close one — the No campaign won 55.3 per cent of the votes cast versus the Yes campaign's 44.7 per cent.

And with that announcement, many economists breathed a sigh of relief.

Scotland votes

Devolution is now in focus after Scotland rejects independence in referendum vote. ((Jeff J Mitchell/Getty Images))

A vote in favour of independence would have created much financial uncertainty, with questions unanswered over what currency Scotland would use, and how much of the U.K.'s £1.3 trillion debt it would acquire. Two of the nation's major banks, the Royal Bank of Scotland and Lloyds Banking Group, also said they would flee if Scotland voted 'yes' and set up their headquarters in England.

In some ways, the outcome is still a win for those disgruntled with the status quo. After the result was made public, British Prime Minister David Cameron said he is committed to giving more powers to Scotland.

Wind's new lifeline

Good news for cell phone users fed up with expensive bills and looking for more competition in the wireless market.

Canada is one step closer to getting a fourth national carrier, after Wind Mobile announced it will partner with Canadian private equity firm West Face Capital and others to buy out Wind's majority foreign shareholder, VimpelCom Ltd.

That opens the door to a potential merger with Mobilicity, or a deal with Quebecor Inc. which is looking to expand its wireless business, Videotron.

In an interview on The Exchange with Amanda LangWind founder and CEO Tony Lacavera said this week's buyout confirms that "Wind is here to stay."

Since launching the company in 2009, Lacavera has been trying to take a bite out of the Big Three's huge piece of pie; Rogers, Bell, and Telus currently control about 90 per cent of the total subscriber base. Wind still only operates in Ontario, Alberta and British Columbia with 750,000 subscribers. 

Baggage fees land in Canada

Frequent flyers could be heard groaning across the country this week. Two of Canada's largest airlines introduced a $25 fee for the first checked bag.

Air Canada says the fee will apply to economy-class passengers travelling within Canada, as well as those flying to and from the U.S., Caribbean and Mexico.

That move followed the announcement from WestJet that it would charge $25 for the first bag on Econo fares for travel within Canada and between the U.S. and Canada.

Both airlines say the new policy will affect about 20 per cent of their Canadian customers.

Earlier this year, Porter Airlines adopted the $25 fee for all of its flights.

As Don Pittis wrote this week, the trend first swept the U.S. and has now trickled into Canada. It happened when larger airlines took a cue from discount carriers and started to charge extra for everything to boost what's called "ancillary revenue" — sales from non-ticket sources like baggage fees, on-board food and services.

According to one annual from CarTrawler, this type of revenue grew 12-fold in six years, from $2.45 billion in 2007 to $31.5 billion in 2013.

Debating tip etiquette

The question of how much to tip housekeepers, or whether one even should or not, after checking out of a hotel room was raised and hotly debated this week after a controversial move by a major hotel chain.

Marriott International is the first hotel to join The Envelope Please program, in which envelopes will be left in its rooms across Canada and the U.S. to encourage guests to tip the hospitality workers who clean the sheets, scrub the toilets, and pick up garbage on a daily basis.

So what's an acceptable tip? The American Hotel and Lodging Association suggests between $1 and $5 US per night. 

"Room attendants arguably do the least glamorous job. And, because we don't see them, there's very much an out-of-sight, out-of-mind attitude to gratuity," according to etiquette expert Karen Cleveland. "So we should absolutely be tipping them."

The program stems from Maria Shriver's foundation, A Woman's Nation, and aims to bring attention to the hard work housekeepers perform that is often overlooked since they're not as visible to hotel guests as staff as the lobby desk or bellhops. Many of CBC's readers begged to differ — pay your staff better, they said.


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GM, Chrysler recalling hundreds of thousands of vehicles

General Motors and Chrysler are both recalling hundreds of thousands of vehicles with faulty parts that can cause injury. The impacted models include the Cadillac XTS, Chevrolet Impala sedans, the Jeep Grand Cherokees and Dodge Durangos.

General Motors is recalling 221,558 Cadillac XTS and Chevrolet Impala sedans because the brake pads can stay partially engaged even when they're not needed, increasing the risk of a fire.

The recall involves Cadillacs from the 2013-2015 model years and Impalas from the 2014 and 2015 model years. There are 205,309 vehicles affected in the U.S.; the rest of the vehicles are in Canada and elsewhere.

GM says the electronic parking brake arm that applies pressure to the back of the brake pads may not fully retract after use. If the brake pads stay partially engaged with the rotor, excessive brake heat may result in a fire.

GM says it knows of no accidents or injuries related to the defect.

GM will notify owners and repair the vehicles for free.

Fuel pump problem leads to stalling

Chrysler is recalling almost 189,000 Jeep Grand Cherokees and Dodge Durangos in the U.S. to fix a fuel pump problem that can cause the SUVs to stall.
 
But a safety advocate says the recall doesn't cover enough models, contending the same problem can happen in millions of other Chrysler, Jeep and Ram vehicles.

Behind The Wheel 2012 Jeep Grand Cherokee

Chrysler is recalling almost 189,000 Jeep Grand Cherokees and Dodge Durangos in the U.S. to fix a fuel pump problem that can cause the SUVs to stall. (Chrysler/Associated Press)

The recall, posted Saturday by the National Highway Traffic Safety Administration, covers some 2011 models with 3.6-liter V6 or 5.7-liter V8 engines. Chrysler says a relay can fail, increasing the risk of a crash, although the company said that as of Aug. 25, it wasn't aware of any crashes or injuries from the problem.

The company began looking into the problem in October 2013 and traced it to a spring that can become deformed because of heat.

The vehicles also might not start, and the fuel pump could keep working even when the engine is shut off. 

The recall covers SUVs built from Jan. 25, 2010 through July 20, 2011, according to the NHTSA documents.
 
Dealers will replace the fuel pump relay for free starting Oct. 24.

'Chrysler should recall them all'

The Center for Auto Safety, a non-profit advocacy group founded by Ralph Nader, says the recall is inadequate because more than 5 million other Chrysler vehicles have the same fuel pump power control module as the Grand Cherokee and Durango.
 
"Chrysler should recall them all," Clarence Ditlow, the centre's executive director, said Saturday.
 
Ditlow's group filed a petition last month asking NHTSA to investigate power system failures in Chrysler vehicles that could cause them to stall while being driven.

In the petition, the group contended that an electrical power control module used by Chrysler in millions of vehicles since 2007 can go haywire, causing them to stall in traffic and cut off devices powered by electricity.

Chrysler-Investigations

Safety advocate says the recall doesn't cover enough models, contending the same problem can happen in millions of other Chrysler, Jeep and Ram vehicles. (Gene J. Puskar/Associated Press)

The allegation covered Ram pickup trucks, Chrysler and Dodge minivans, the Jeep Grand Cherokee, Dodge Durango and Dodge Journey SUVs, the Jeep Wrangler, and other models.

The safety group says it has received over 70 complaints and that the government has received hundreds.

NHTSA has yet to make a decision on whether to investigate the matter. Chrysler said it is investigating consumer complaints and retrieving components from vehicles in the field for a closer analysis. The company says its vehicles meet all federal safety standards.

The centre's petition said that Chrysler's "Totally Integrated Power Module," which includes a computer, relays and fuses, distributes electrical power through the entire vehicle. In addition to stalling, the faulty modules have may have caused air bags not to inflate and fuel pumps to keep running, causing unintended acceleration and fires, the petition said.

Ditlow said the company started phasing them out in 2012, but they remain in the 2014 Jeep Wrangler and the Dodge and Chrysler minivans.
 
NHTSA also is looking into a New Jersey man's petition filed earlier this month alleging that Chrysler minivans can stall unexpectedly after refuelling.
 
Car owners and advocacy groups can petition the NHTSA asking for investigations that sometimes lead to recalls. The Center for Auto Safety has successfully petitioned NHTSA in the past, including one instance that led to the recent recall of 1.56 million older Jeep SUVs with fuel tanks mounted behind the rear axles.

The centre contended the tanks can leak fuel and cause fires in a crash, while Chrysler maintains the tanks perform as well as comparable models from other automakers.


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Expect to pay $83K more for a Canadian home than you initially planned: survey

Written By doni icha on Sabtu, 20 September 2014 | 22.39

New home hunters be warned: The price you expect to pay for a new home is likely $83,556 short of what you'll actually end up spending, according to a new survey.

The Bank of Montreal's Fall Home-Buying Report, released Friday, says four in 10 of potential homebuyers surveyed —43 per cent — can expect to pay an average 21 per cent more (to 483,397) than when they first started looking.

Only five per cent of those in the survey actually dropped their price range.

The disparity between expectation and reality is unsurprisingly widest in Toronto. Most of those surveyed initially planned to spend about $630,000, but with demand exceeding supply and prices rising steadily each month, they have to inflate their price point by an average of $100,000.

It's a similar story in the country's other hot real estate markets.

Home hunters raised their budget by:

  • 17 per cent ($48,883) in Montreal.
  • 19 per cent ($89,389) in Calgary.
  • 16 per cent ($81,095) in Vancouver. 

"Housing prices in Canada have risen 18 per cent over the past four years," said Martin Nel, vice-president of Personal Banking Products at BMO. "As prices rise, house hunters need to ensure their savings are keeping pace, especially first-time buyers who don't have the leverage of a current house in the market."

Most home hunters (55 per cent) also change their preference for the type of dwelling they'd like to purchase based on their first assessment of the market.

Condos and detached houses often start as the favoured investment. But with concern growing over the condo market overheating, and more detached homes topping $1 million, they're being swayed towards semi-detached homes and townhouses instead.

"By shifting toward semis and townhomes and away from detached and condos, buyers appear to want their cake and eat it too — a backyard for the kids to play in, but also something that won't break the budget, notably in Vancouver and Toronto," said BMO senior economist Sal Guatieri.

The survey was conducted by Pollara earlier this month and included about 1,000 adult Canadians who planned to buy a new home within the next five years. 

Data was weighted using past homebuyer research to be representative in terms of age, gender and region.


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IPhone 6 frenzy: Tempers, joy and long lineups

Hundreds stood in line this morning at shopping malls across Canada to buy iPhone 6, the newest release from Apple.

At a store in Toronto's Eaton Centre, the iPhone Plus, the larger-screen model, was sold out by 7 a.m. ET and Apple was only able to take orders. On eBay, the latest iPhone was selling for between $1,200 to $1,600.

RCMP were called in to control a crowd of more than 600 who turned out to buy the phones in a mall in Vancouver early in the morning.

"Apple plays a very different game than most of its competitors," Carmi Levy, a technology analyst told CBC News. "Its devices are fashion statements, lifestyle statements. When you pull an iPhone out of your pocket … you're making a statement about who you are and what you value."

With a larger screen and a new iPad-style design, the latest iPhones have an ultra-thin body and rounded corners. They also boast faster processors and a better camera.

"Apple doesn't create product categories. It reinvents existing ones and refines them and drives the mainstream," noted Levy.  "Smartphones existed before the iPhone but Apple made everybody buy one and install apps."

Another attraction is an easy-to-use operating system, iOS 8, offering a breadth of apps. While Android has long had larger screens, Apple has some longtime acolytes who now are no longer tempted to switch to get the big screen.

Customers are being encouraged to use the two-step verification process, which protects all the data stored in iCloud along with protecting Apple ID account information. Customer data such as photos, messages, email, contacts and call history is protected by each individual's passcode on iPhones and iPads running iOS 8.

'Apple doesn't create product categories. It reinvents existing ones.'— Tech expert Carmi Levy

The company is facing some criticism in law enforcement circles for its new security measures. Critical evidence such as a drug dealer's accounts or child pornography is often held on mobile devices such as smartphones. Apple has said that 93 per cent of requests by law enforcement is in the form of a "device request," where officers are working on behalf of a customer to locate a stolen device.

Wait lists grow

There may have been pent-up demand for an iPhone with a larger screen, which makes keyboard use easier and provides a better experience watching video.

Apple said it received a record four million first-day preorders of iPhone 6 and iPhone 6 Plus, meaning many customers will have to wait until October for their new phones.

Apple iPhone 6 and iPhone 6 Plus

The iPhone 6, left, and iPhone 6 Plus are shown next to each other during a new product release on Sept. 9. There is pent-up demand for a larger iPhone. (Marcio Jose Sanchez/Associated Press)

Most Canadian carriers are offering the 4.7-inch iPhone 6 at $265 for the 16 GB model, $375 for the 64 GB model and $484 for the 128 GB model with a two-year contract. The smaller models are $749, $859 and $969, respectively, with no contract.

The carriers are offering the 5.5-inch iPhone 6 Plus at $375 for the 16 GB model, $485 for the 64 GB model and $594 for the 128 GB model with a two-year contract. The larger phones are $859, $969 and $1,079 respectively with no contract.

Levy said Apple's launch will also have a positive effect on the rest of the industry.

"It's at the centre of a very large ecosystem of other companies," he said. "They almost hang off the Apple brand. We are seeing this very large economy building up around Apple technology hardware [and] software services … it benefits all these other companies."

Lineups around the world

Gadget lovers, entrepreneurs and early adapters flocked to Apple stores in New York, San Francisco and other cities around the world.

At the Apple store on Fifth Avenue in New York, the line of would-be buyers stretched for more than 10 blocks. Apple employees led them in a New Year's Eve-style countdown to herald the store's opening at 8 a.m. local time and high-fived customers as they entered the glass cube leading to the underground store.

Paul Terrebonne, a 26-year-old cook who had preordered his space-grey iPhone 6, said the size of the new devices had been enough to lure him back to Apple from his previous phone, a Motorola Moto X.

"It's all about screen size, plus I missed the iPhone's camera," he said, adding that he had shunned the iPhone 6 Plus because it was "a bit too big."

The launch attracted buyers from farther afield. Flavio Gondim, a 40-year-old Brazilian public sector employee, said he was buying an iPhone 6 in New York because "back home these are, maybe, 50 per cent more expensive."

In Asia, many who lined up to buy the new phones in Singapore, Hong Kong and Australia said they planned to resell the devices in China, where regulatory hurdles are holding up the new phones' debut.


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Canada's bank oligopoly is good for consumers, says outgoing TD CEO

TD Bank chief executive Ed Clark admits the Canadian banking sector is an oligopoly, but that structure has been and will continue to be good for the consumer.

Oligopolies "give enormous benefits to consumers because [the banks] compete so vigorously," said the outgoing CEO in an interview with CBC's The Exchange with Amanda Lang. "It's been good for Canada that we've had big strong banks. This has been a pretty good deal for the consumer as well as the investor."

Clark sat down with Lang this week ahead of his retirement on November 1st after 12 years at the helm of Canada's second largest bank.

Since his appointment in 2002, Clark has led a massive expansion south of the border through a series of acquisitions. TD now has more branches in the U.S. (1,300) than it does in Canada (1,100), putting it in the top ten largest banks in the U.S.

Chosen to continue that growth is Bharat Masrani, the head of TD's U.S. retail operation. He'll replace Clark immediately upon retirement.

hi-td-ed-clark

Toronto Dominion CEO Ed Clark retires November 1st after 12 years at the helm.

With one foot out the door, Clark says he'd like to see the government tighten lending rules to deal with the threat of asset bubbles.

"Low interest rates create these asset bubble," said Clark, adding that Ottawa should provide a framework on lending because it's unrealistic for the bank to make consumers borrow less.

"If we lean against people borrowing more, but no one else leans, it doesn't do any good and household debt will continue to rise," said Clark.

According to Statistics Canada, the household debt to income ratio rose to 163.6 per cent in the second quarter of the year — just shy of the record 164.1 per cent hit last year.​


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Flying fees backlash and hotel room tips debated: the business week in review

Roughly half of Scotland woke up Friday disappointed, while the other half rejoiced over its renewed, 307-year-old union with the United Kingdom.

Although opinion polls predicted a far more even split in the vote, the final result of Scotland's referendum was still a close one — the No campaign won 55.3 per cent of the votes cast versus the Yes campaign's 44.7 per cent.

And with that announcement, many economists breathed a sigh of relief.

Scotland votes

Devolution is now in focus after Scotland rejects independence in referendum vote. ((Jeff J Mitchell/Getty Images))

A vote in favour of independence would have created much financial uncertainty, with questions unanswered over what currency Scotland would use, and how much of the U.K.'s £1.3 trillion debt it would acquire. Two of the nation's major banks, the Royal Bank of Scotland and Lloyds Banking Group, also said they would flee if Scotland voted 'yes' and set up their headquarters in England.

In some ways, the outcome is still a win for those disgruntled with the status quo. After the result was made public, British Prime Minister David Cameron said he is committed to giving more powers to Scotland.

Wind's new lifeline

Good news for cell phone users fed up with expensive bills and looking for more competition in the wireless market.

Canada is one step closer to getting a fourth national carrier, after Wind Mobile announced it will partner with Canadian private equity firm West Face Capital and others to buy out Wind's majority foreign shareholder, VimpelCom Ltd.

That opens the door to a potential merger with Mobilicity, or a deal with Quebecor Inc. which is looking to expand its wireless business, Videotron.

In an interview on The Exchange with Amanda LangWind founder and CEO Tony Lacavera said this week's buyout confirms that "Wind is here to stay."

Since launching the company in 2009, Lacavera has been trying to take a bite out of the Big Three's huge piece of pie; Rogers, Bell, and Telus currently control about 90 per cent of the total subscriber base. Wind still only operates in Ontario, Alberta and British Columbia with 750,000 subscribers. 

Baggage fees land in Canada

Frequent flyers could be heard groaning across the country this week. Two of Canada's largest airlines introduced a $25 fee for the first checked bag.

Air Canada says the fee will apply to economy-class passengers travelling within Canada, as well as those flying to and from the U.S., Caribbean and Mexico.

That move followed the announcement from WestJet that it would charge $25 for the first bag on Econo fares for travel within Canada and between the U.S. and Canada.

Both airlines say the new policy will affect about 20 per cent of their Canadian customers.

Earlier this year, Porter Airlines adopted the $25 fee for all of its flights.

As Don Pittis wrote this week, the trend first swept the U.S. and has now trickled into Canada. It happened when larger airlines took a cue from discount carriers and started to charge extra for everything to boost what's called "ancillary revenue" — sales from non-ticket sources like baggage fees, on-board food and services.

According to one annual from CarTrawler, this type of revenue grew 12-fold in six years, from $2.45 billion in 2007 to $31.5 billion in 2013.

Debating tip etiquette

The question of how much to tip housekeepers, or whether one even should or not, after checking out of a hotel room was raised and hotly debated this week after a controversial move by a major hotel chain.

Marriott International is the first hotel to join The Envelope Please program, in which envelopes will be left in its rooms across Canada and the U.S. to encourage guests to tip the hospitality workers who clean the sheets, scrub the toilets, and pick up garbage on a daily basis.

So what's an acceptable tip? The American Hotel and Lodging Association suggests between $1 and $5 US per night. 

"Room attendants arguably do the least glamorous job. And, because we don't see them, there's very much an out-of-sight, out-of-mind attitude to gratuity," according to etiquette expert Karen Cleveland. "So we should absolutely be tipping them."

The program stems from Maria Shriver's foundation, A Woman's Nation, and aims to bring attention to the hard work housekeepers perform that is often overlooked since they're not as visible to hotel guests as staff as the lobby desk or bellhops. Many of CBC's readers begged to differ — pay your staff better, they said.


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What's in store for Scotland? Ask Quebec: Don Murray

For those with long memories, the morning after in Scotland — indeed the final days of the heated campaign — seemed an eerie replay of Quebec's first referendum in 1980.

There are differences, of course, some of them major, but consider: the loser, in conceding, hints at another referendum. 

Alex Salmond, the Scottish National Party First Minister, said the people had not chosen independence "at this stage."  Thirty-four years ago PQ Quebec premier René Lévesque conceded, saying, "If I've understood you, 'till the next time!"

Meanwhile, the winners wait until the last minute to promise huge constitutional  change. 

In 1980 the man with the promise was Prime Minister Pierre Trudeau.  In Scotland it was another native son, this time former Prime Minister Gordon Brown. He thundered into the campaign and galvanized the "No" camp with passionate speeches and a sweeping promise of "devo max" – maximum devolution, or in other words a major transfer of powers from London to the Scottish Assembly.

SCOTLAND-INDEPENDENCE-Referendum

British Prime Minister David Cameron followed up Friday morning's news of the No vote in Scotland with a speech in front of 10 Downing Street promising fast-track reform. (Suzanne Plunkett/Reuters)

Brown had the green light from British Prime Minister David Cameron, who followed it up Friday morning with a speech in front of 10 Downing Street promising fast-track reform, with an outline constitutional bill ready by January.

But Britain, unlike Canada, has a misshapen federal structure which appears to have been worked out on the back of an envelope — or rather, two. 

The first envelope was the Barnett formula, which dictates how much England, Scotland, Wales and Northern Ireland get in grants from the British treasury. 

To put it in Canadaspeak, it's an equalization formula. And the big winners are Scotland and Northern Ireland, while England pays out.

The Barnett formula was the brainchild of a Labour minister in the 1970s.  Twenty years later a Labour prime minister, Tony Blair, decided to offer assemblies and limited powers to three of the four nations making up the United Kingdom – Scotland, Wales and Northern Ireland.  England, by far the biggest nation, got nothing — but then, so the somewhat muddled thinking apparently went, it already had most of the power in the British parliament. 

Scotland referendum Yes voters react

The SNP could win another Scottish Assembly election and rule for another five years - it's still Scotland's most popular party. (Cathal McNaughton/Reuters)

Now that devo max is on the table, the English backlash is growing. To be precise, the English backlash among ruling Conservative MPs. They complain bitterly that Scotland, and Salmond's SNP, shouldn't be rewarded for trying to break up the union. The Barnett equalization formula should, they say, be retired. The Scots have lived high off the hog for too long.

The Scots, or at least the SNP, reply that the Barnett formula has never properly compensated them for all the North Sea oil money London has pocketed over the years.

The backlash has a second string. Why, the Conservative MPs mutter, should Scottish MPs in London be allowed to vote on issues that affect England such as its health service and education? In Scotland these questions are reserved for members of the Scottish Assembly only. 

A recent poll showed that that view was shared by more than 60 per cent of English voters.

One British leader who has been listening is Cameron himself. Friday morning he said, "We have heard the voice of Scotland and now the millions of voices of England must also be heard. The question of English votes for English laws … requires a decisive answer."

That could set the cat among the Scottish pigeons, with the SNP and its followers complaining that the promise of constitutional reform is simply a cloaked stick with which to beat the uppity Scots.

At the same time, amazingly for a country where all tax powers were completely centralized until 15 years ago, the main British parties in London are now talking about turning huge chunks of tax power over to Scotland's assembly. The corollary would be the retirement of the Barnett equalization formula. 

Scotland

In an amazing move for a country where all tax powers were completely centralized until 15 years ago, the main British parties in London are now talking about turning huge chunks of tax power over to Scotland's assembly.

It feels like another back-of-the envelope moment, with little thought being given to what powers Wales and Northern Ireland should have, let alone England.

It seems safe to say that whatever is offered, the SNP will say it's not enough.  Devo max, for them, would be total control over taxes – independence by the back door. 

And, like the Parti Québécois more than 30 years ago, the SNP could win another Scottish Assembly election and rule for another five years. It's still Scotland's most popular party.

And then … well, remember where Trudeau's promises of constitutional reform led.  To the repatriation of the Canadian constitution, angrily refused by the Quebec government of Lévesque. 

Then another prime minister, Brian Mulroney, tried to cobble together a deal to satisfy Quebec.  This was the Meech accord, which unravelled.

It was followed by the Charlottetown accord and a countrywide referendum, which rejected the whole deal roundly. 

Three years after that, in 1995, a third prime minister, Jean Chrétien, found himself facing the potential meltdown of this country in a second Quebec referendum.

The Brits clearly don't know what they're letting themselves in for.


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