FATCA tax deal forces Canadian banks to send info to IRS

When Canada's banks reopen for business on July 2, they will begin formally operating as informants for the United States Internal Revenue Service — the IRS.

Financial institutions in Canada will be required to ask all new and existing clients opening a new account questions such as where they were born, and possibly where their parents were born.

Those who indicate they have a connection to the U.S. will have their files sent to the Canada Revenue Agency — which will automatically pass them along to the IRS.

Canadian citizens who decline to answer the new set of questions could have their personal banking information passed along to Uncle Sam to determine if they are a "U.S. person." Or, the bank could refuse to open an account for those who refuse to answer the questions.

All U.S. citizens and "resident aliens" (green card holders) are required to file U.S. taxes every year — regardless of where they live. Eritrea is the only other country in the world with a similar law.

Accidental Americans

In 2010, the U.S. announced the Foreign Account Tax Compliance Act (FATCA), a law billed as an attempt to catch wealthy Americans stashing their money in offshore accounts. Critics quickly pointed out, however, the law makes no distinction between those intentionally engaging in tax avoidance and "accidental Americans."

It is estimated that one million U.S. citizens call Canada home, and while many are aware of the tax requirements that come with their dual citizenship, others are not.

More of a surprise to some is that the U.S. automatically confers citizenship to the children of U.S. citizens, even if they are born abroad, and with that comes the obligation to file taxes.

Banks fought law and lost

Canada's major banks and the association that represents them weren't available to comment on the new rules and the impact customers might expect — but did direct CBC News to their websites for general information concerning the new law.

The banks, and former federal finance minister Jim Flaherty complained bitterly to the U.S. about FATCA in an effort to obtain an exception for Canada — but to no avail.

The U.S. is threatening a 30 per cent withholding tax against any financial institution deemed "non-compliant," under FATCA. The Canadian government said that "could have significant negative impacts on the Canadian economy."

After lengthy negotiations, Canada eventually signed an agreement with the U.S. and passed its provisions into law in the most recent Budget Implementation Act.

Law could face challenge

Experts say the requirement for banks to handle the files of Canadians with dual U.S. citizenship differently than other clients could violate the Canadian Charter of Rights and Freedoms, which protects Canadians from discrimination based on, among other things, "national or ethnic origin."

The Office of Canada's Privacy Commissioner says questions about the charter fall outside of its jurisdiction — but has expressed concern about FATCA violating privacy rights and laws.

In a written statement, the office noted information sharing for tax purposes between Canada and the U.S. is not new — however it "expects the Canada Revenue Agency to carry out its new responsibilities under FATCA in a way that meets its obligations under the Privacy Act." 

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Canadian economy expands by less than expected in April

Canada's economy expanded in April, but not by as much as economists had been expecting.

Statistics Canada reported Monday that Canada's service sector expanded during the month, but the output of goods-producing industries actually declined.

"There were notable declines in mining and oil and gas extraction, construction and utilities, while manufacturing was up," the data agency said. Manufacturing was actually the only part of the goods-producing sector that expanded during the month.

Economists polled by Bloomberg had been expecting the overall GDP figure to come in at around a 2.3 per cent annual pace of growth.

For comparison purposes, data out of the U.S. showed the American economy contracted by 2.9 per cent in the first three months of the year primarily for weather-related reasons, but economists don't expect that weak showing to continue.

There were large declines in a number of sectors, including construction, agriculture, mining and oil and gas, that dragged the overall growth lower. But some say that trend won't continue. 

"The natural resources sector is fairly lumpy and the weak output numbers for April will likely be reversed in the months to come," Scotiabank said in a note following the release of the data.

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GM compensation plan for ignition switch scandal to be unveiled Monday

When Kenneth Feinberg announces the terms of General Motors' plan to pay victims of crashes caused by bad ignition switches, he'll have an open wallet.

Feinberg, the country's most well-known compensation expert, is scheduled to reveal the terms Monday, and GM CEO Mary Barra has said there will be no cap on payments.

Also, GM won't have any say in Feinberg's awards, she told a U.S. House subcommittee during a hearing earlier this month.

"He will have complete independence," Barra said under questioning. "General Motors wants to reach with this compensation program everyone who lost a loved one due to this issue, or who suffered serious physical injury."

The company says the faulty switches are responsible for at least 54 crashes and more than 13 deaths, but lawyers and lawmakers say the death toll is closer to 100, with hundreds of injuries. That would send GM's payments into the millions, if not billions of dollars. GM was sitting on a $27 billion cash stockpile as of March 31. So far, it has announced or taken charges of $2 billion for recall expenses.

Feinberg, who also administered the government's $7 billion fund for the 2,977 victims of the Sept. 11, 2001, terrorist attacks, is likely to follow a similar plan in the GM case, with detailed formulas setting payments based on severity of injuries and age. The average award to the 2,880 families who filed death claims from Sept. 11 was $2.1 million. The fund also paid an average of about $400,000 each for the 2,680 accepted claims of injuries; the smallest injury award was $500, the largest $8.6 million.

The Sept. 11 fund was set up to protect financially troubled airlines from thousands of potential lawsuits. It was a success, limiting the number of lawsuits to about 80.

The GM compensation likely will be limited to victims of crashes of older small cars, of which GM recalled 2.6 million earlier this year because the switches can cause engines to stall, shutting off power steering and brakes. That can cause drivers to lose control of their vehicles and also disables the air bags. The cars include the Chevrolet Cobalt and Saturn Ion, both of which are no longer made.

'He will have complete independence'- GM CEO Mary Barra, on Feinberg's job

Feinberg could use air bag activation to decide if people are paid. If the air bags deployed in an accident, that means they were not disabled by the switches, so the switches were not at fault.

GM has said Feinberg would start taking claims Aug. 1. Barra said she did not know how much the company would have to spend to settle the claims.

To get a payment, victims would have to agree not to sue GM. The company is vulnerable to legal claims because it has admitted knowing about the switch problem for more than a decade, yet it didn't recall the cars until this year.

Feinberg is scheduled to hold a news conference in Washington on Monday to release details "including eligibility, scope, rules for the program, and timing of submitting claims," a Feinberg spokeswoman said in an email. The program also will launch a website on Monday.

The spokeswoman, Amy Weiss, would not comment on the program before the news conference. GM has deferred comment to Feinberg.

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Guaranteed $20K income for all Canadians endorsed by academics

A group of academics and activists is trying to drum up interest in an ambitious plan to provide every Canadian with a guaranteed minimum level of income — whether or not they have a job.

Rob Rainer, a campaign director for the Basic Income Canada Network, envisions a country where everyone is assured a minimum of $20,000 annually to make ends meet.

"For many of us, we think the goal is no one should be living in poverty," Rainer said at a conference on the issue over the weekend at McGill University.

"That's essentially what we're striving to achieve."

More than 100 speakers and participants were on hand for the conference, which focused on the merits of a guaranteed minimum income that would either replace or exist alongside existing social programs.

The idea is hardly new — the Canadian and Manitoba government conducted an experiment with the issue in the 1970s — but it has enjoyed a resurgence lately.

Switzerland is expected to hold a non-binding referendum this fall on whether to guarantee every citizen an annual income of $35,900 Cdn.

And in the United Sates, the idea has supporters on both sides of the political spectrum.

Proponents on the left argue it represents an opportunity for greater redistribution of wealth, while those on the right see it as a chance to cut back on bureaucracy and return control to people's lives.

The two sides disagree, however, on whether there would be accompanying tax hikes and whether other social programs would remain place.

Almaz Zelleke, a professor at New York University, said guaranteed income has rarely had this much attention in the United States since President Richard Nixon tried to introduce such a program for families in the 1960s. That effort was ultimately thwarted by Congress.

Taxes could offset costs

At the conference, Zelleke gave a presentation laying out how a guaranteed income could be offset by taxes and work from a practical, fiscal standpoint. But even she admitted it would be a challenge to get such a plan on the agenda in Washington, D.C.

"To be very honest, it's not on the agenda of any mainstream political party in the United States," she said in an interview, but added a recent surge in media attention has, helpfully, "generated discussion among people who understand that there are problems with the welfare state."

In Canada, the town of Dauphin, Man., was famously the subject of a government pilot project where residents were provided with a guaranteed minimum income from 1974-1978.

The goal of the program, which cost $17 million, was to find out whether providing extra money directly to residents below a certain household income level would make for effective social policy.

The community's overall health improved and hospital rates declined during the period, according to a 2010 study by Evelyn Forget, a professor at the University of Manitoba.

Former Conservative senator Hugh Segal, who officially resigned from his post this month, argued for years in favour of the idea, saying it would provide more effective services at a reduced cost.

Quebec's new minister of employment and social solidarity was also once a prominent advocate.

'Bit of traction' among opposition parties

Francois Blais, a former political science professor, published a book in 2002 called Ending Poverty: A Basic Income for All Canadians, though Philippe Couillard's Liberal government has made no commitments on the issue.

At the federal level, Rainer conceded it's far from the agenda of the current Conservative government, but said there's a "little bit of traction" among opposition parties.

Liberal Party delegates passed two resolutions related to guaranteed minimum income at a meeting in Montreal this year — a move Rainer called "pretty significant."

The Green Party also endorses the notion in its party platform.

"The idea is not new, it's not really radical," Rainer said, pointing out that seniors and families with children receive a form of guaranteed income from the government.

"Where it does become more radical is when you get into the area of the working age population, and the idea that people should receive some income whether they are in the labour market or not. That's a fairly radical idea in our culture, because most of us were brought up to believe that in order to survive you have to work."

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TransPacific Partnership deal elusive as talks set for Ottawa

Next week, hundreds of negotiators from 11 Asia-Pacific countries descend on Ottawa as part of the Trans-Pacific Partnership (TPP) talks, viewed as the next big free trade deal after the European pact known as CETA.

But Ottawa is barely acknowledging the event is even happening; so much so that the Council of Canadians issued a release Friday wondering why the government is "setting (a) new global standard" for secrecy.

There may be good reason for the underwhelming embrace of TPP.

With more than 20 negotiating rounds to date, it's beginning to appear that the countries vying to create one of the world's biggest trading blocks are just going through the motions.

"Everyone is indulging in a charade where negotiations are going forward. It's the biggest game in town, but I'm not convinced TPP will see the light of day," says Lawrence Herman, a Toronto-based trade lawyer formerly with Cassels Brock.

Canada-EU deal in trouble

The situation is not much more clear with Canada's agreement-in principle reached with Europe last October. Officials say CETA is taking longer than anticipated to render into legal text, but observers believe the deal has run into substantive roadblocks.

Also perplexing is why Canada has not ratified the foreign investment protection agreement with China, called FIPA, when the two sides signed the treaty almost two years ago.

The one agreement that appears to have staying power is the free trade deal with South Korea, although that rates low in terms of significance next to the Canada-European Union pact, or even TPP.

Trade agreements aren't usually big vote-getters for governments, but the consequences for the Harper government of failure on CETA — or having to announce further concessions to the hard-bargaining Europeans — could be a serious issue entering an election year.

The federal government has made free trade deals a central plank of its economic agenda, and Prime Minister Stephen Harper all but declared "mission accomplished" for CETA at a ceremony in Brussels last October.

"The Conservatives have made this such a high-level issue for them that, if they can't close these deals, they will have problems and it's not just closing deals, it's closing good deals," said NDP trade critic Don Davies.

"But I think their rhetoric has never matched the reality."

Investor-state clause contentious

Matthew Kronby, a former Canadian trade negotiator who is now a partner with the Bennett Jones law firm in Toronto, says there are still issues to be worked out before CETA can be completed.

"It's very close, but getting over that last hump is a challenge right now," he said.

One key issue, sources say, involves the controversial investor-state clause that allows private firms to sue governments if they feel they have been unfairly thwarted in their operations.

Several European countries, including Germany, are said to be balking at signing because they fear they will have to offer the same arrangement to U.S. companies, which are notoriously more litigious than those in Canada. As well, the Europeans are concerned U.S. firms would be able to piggy-back on CETA to sue in Europe through their Canadian subsidiaries.

Further complicating matters, committee chairs from 16 European parliaments sent a letter last week to European trade commission Karel de Gucht asking him to consider CETA, and the Europe-U.S. trade deal if it comes to fruition, "mixed agreements" that require ratification from all 28 member national parliaments.

Trade consultant and former negotiator Peter Clark says the difficulties show that Canada never really had an agreement with Europe and the haggling continues on several fronts.

Worry over treaty with China

If the Europeans are getting cold feet over CETA, Davies says he has been told it is Ottawa that is having second thoughts about the investment protection treaty with China.

Reports of a cabinet rift over the agreement have surfaced, although a senior government official told The Canadian Press that concerns about labour mobility issues were alleviated somewhat last week by Ottawa's overhaul of the temporary foreign workers' program.

A substantive problem, says Davies, concerns the non-conforming measures clause grandfathered into the FIPA that would allow China to frustrate Canadian firms seeking to invest in the world's second-largest economy. Canada has the Investment Canada Act and a few other well-known restrictions, but barriers are far more numerous and, perhaps, more mysterious in China.

"There could be thousands," said Davies. "I asked for a list in committee and they (government officials) couldn't provide them."

But perhaps the most problematic is the talks surrounding TPP, which seek to create a trading block among 12 countries on both sides of the Pacific representing 40 per cent of the world's economic output and 26 per cent of global trade.

U.S. President Barack Obama has set his sights on the Asia-Pacific summit in November for arriving at an agreement-in-principle, although Australia's trade minister said recently the first half of 2015 is more realistic.

U.S. faces political roadblocks

Even that deadline may be too optimistic, say analysts, given that Obama has not secured fast-track authority to negotiate a deal from the Republican-controlled House of Representatives, or even the Senate. The prospects that the mid-term elections in November will return a more friendly Congress appear slim, they note.

Fast-track authority gives the White House the green light to negotiate an agreement and send it to Congress for an up or down vote but, without it, any deal struck with the U.S. can be picked apart later by special interests in Congress.

"If I was negotiating I'd be quite skeptical about what can be delivered," explained Kronby. "You make concessions and you make a deal and the U.S. comes back a year or two later and says it's not good enough."

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Loonie takes aim at 94 cents US

The Canadian dollar tested six-month highs Friday, but analysts say they don't expect the loonie's recent strength to be the new normal.

The Canadian dollar rose almost three-tenths of a cent to close at 93.80 cents US Friday — its fourth consecutive day trading higher following a strong inflation report last Friday. That's its highest level since the first week of January.  

The loonie hit a 2014 low of 88.94 cents on March 20, after a steady slide down from 98 cents in September and 96 cents as recently as November.

But don't expect the loonie to keep rising, foreign exchange experts say.

"The Canadian economic backdrop is not strong enough to withstand CAD/USD parity," Camilla Sutton, chief foreign exchange strategist at Scotiabank, told CBC News.

"A strong currency would weigh on exports and suppress inflation at a time when the economy is already fairly vulnerable and would relieve any pressure on the [Bank of Canada] to increase interest rates, likely fuelling financial stability risk."

Higher oil prices, inflation fuel loonie

Sutton also notes that investors had built up a large short position in the Canadian dollar during the fall and early winter. "This has fallen victim to short covering, driving a more dramatic move in [the Canadian dollar]."  She sees the Canadian dollar as being "well overvalued."

Oil prices, which have moved above $105 US a barrel, and Canada's May inflation figures, which showed annual inflation rising at an unexpectedly high 2.3 per cent, have also boosted the loonie.

"Higher oil prices (in the wake of the Iraq crisis) and higher inflation readings (with their presumed dimming of [Bank of Canada] rate cut prospects) helped strengthen the Canadian dollar to ... the strongest level since the start of the year," says a rate forecast from Michael Gregory, deputy chief economist with BMO Capital Markets.

"It also helped that the end-of-May release of Canadian GDP data revealed relatively stronger performance than south of the border."

BMO forecasts that the loonie will weaken dramatically through 2015, with a U.S. dollar costing $1.15 Cdn to buy by the end of that year. That converts to an exchange rate of 87 cents US.

Weak U.S. data

It's clear that broad weakness in the U.S. dollar is playing a major role in the Canadian dollar's recent strength.

According to data from Bloomberg, the American currency slipped Friday to its lowest level against a basket of major currencies in seven weeks.

The greenback's slump this week followed news that the U.S. economy contracted in the first quarter at an annual rate of 2.9 per cent.

"It's been a bad week in terms of the data released from the U.S., which has shown that the economy's a lot weaker than people anticipated," Lee Hardman, a foreign-exchange strategist at Bank of Tokyo-Mitsubishi UFJ, told Bloomberg.

"That's prompting investors to downgrade their outlook for growth this year in the U.S. and that's leading to lower yields and a lower [U.S.] dollar."

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GM issues 4 more recalls covering 500,000 vehicles; 57,000 in Canada

General Motors announced late Friday four more safety recalls covering more than half a million vehicles worldwide, including more than 57,000 in Canada.

It's the 48th recall the automaker has announced this year. More than 20 million vehicles have been targeted. That's more than the number of cars GM sold in the U.S. in all of 2013.

The biggest of Friday's recalls affects almost 467,000 four-wheel-drive Chevrolet Silverado and GMC Sierra pickups from the 2014 and 2015 model years, the 2015 Sierra Chevrolet Tahoe and Suburban, and the 2015 GMC Yukon and Yukon XL. More than 53,000 of the recalled vehicles were sold in Canada.

In these vehicles, GM says the transmission may electronically switch into neutral on its own. "If this occurs while a vehicle is in motion, no power will go to the wheels," says a GM release. The release goes on to say if the vehicle is stopped or parked, it may roll away if the parking brake is not set. The automaker says it knows of no crashes or injuries related to the issue.

In the second largest recall, dealers have been instructed to replace the driver's side airbag inflator in more than 33,000 2013 and 2014 Chevrolet Cruze sedans. Just over 4,000 of the affected vehicles are in Canada.

GM says the driver's front airbag may rupture, sending metal pieces into the passenger compartment, or the airbag may not inflate in a crash. The company says it's aware of one injury related to this issue. Reuters says an airbag accident that left a Georgia woman blind in one eye led to the Cruze recall order.

The other two recalls are smaller:

• Just over 2,000 2014 Chevrolet Corvettes (33 in Canada) are being recalled to replace faulty rear shock absorbers.
• Almost 4,800 2013-2014 Chevrolet Caprice police cars and 2014 Chevrolet SS sport sedans are being called back to inspect possibly defective windshield wipers. The affected vehicles were all sold in the U.S. 

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Supreme Court sides with Quebec unionized Wal-Mart workers

The Supreme Court of Canada has sided with the union representing former Wal-Mart employees who claimed the company violated Quebec labour law when it abruptly closed its store in Jonquière, Que., not long after the workers voted to unionize.

In a 5-2 decision delivered Friday morning, the court ruled that the 190 employees who were terminated when the store was closed are entitled to compensation.

Bernard Philion​, one of the lawyers who represented the United Food and Commercial Workers Union in the nearly decade-long battle, said the decision sends a message. 

"No matter how big the employer is, the Quebec legislation protects workers and their rights," he said. 

The Wal-Mart employees in Jonquière became the first in North America to be unionized when they joined the union in 2004.

However, attempts to reach a collective agreement failed.

On Feb, 9, 2005, the contract issue was sent to arbitration, but that same day, Wal-Mart told the workers it was closing the store. The store eventually closed on April 29, 2005, putting approximately 190 employees out of work.

The company said the store wasn't profitable, but appellants said the employer shut it down in response to the labour dispute.

The union's first attempt at legal action against the retail giant failed when, in 2009, the Supreme Court ruled that the workers' freedom of association rights weren't violated when the company decided to close the store.

However, the union filed a new appeal with the Supreme Court in 2013, this time arguing that the company violated a provision of the Quebec labour code by changing the workers' conditions of employment without consent while the terms of the collective agreement were being negotiated.

The court found Wal-Mart did not adequately prove the four-year-old store was in financial difficulty.

A spokesman for Wal-Mart Canada told CBC News in Montreal that the company is "disappointed" with the decision. 

"We will review the decision carefully in order to determine what our next steps will be," Alex Roberton, Wal-Mart Canada's director of corporate affairs, said in an email. 

Friday's ruling states that the Wal-Mart employees could be entitled to compensation beyond the severance pay they received when they were terminated. 

Wal-Mart has fought against worker unionization at several other Quebec stores.

In Gatineau, Que., Wal-Mart closed a tire and oil change garage in 2008, only a few months after workers there obtained the first collective agreement in the history of the Arkansas-based company. 

In 2010, workers at another Gatineau store won a collective agreement, becoming only the second group of workers to do so at any Wal-Mart store in North America 

A year later, the employees requested that the union at the store be decertified.

Michel Grant, a labour relations expert and associate professor at the University of Quebec at Montreal, said the Supreme Court decision is a significant step forward for workers and organized labour across Canada. 

"The message which is sent to other employers is if you decide implicitly, because I don't know many employers who will say explicitly that they closed because the unions came in to their enterprise, that if you do it for that reason, there will be a price," he said. 

"The impact is not only for the Wal-Mart workers. It's also for all the workers who may have less fear to unionize and thinking that unionization is not synonymous with closure and losing their jobs."

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Google gadgets, why Pride pays & summer of staycations: Business Week Wrap

An interesting week in financial news opened with a developer conference hosted by Google that showed what the technology giant has up its sleeve in its continuing attempts to move beyond being just a search engine on your desktop computer, and become an all-encompassing technological arm touching every aspect of your life.

The trend among the audience of more than 6,000 developers was a movement toward more wearable computing, and more details on other consumer products like the company's driverless cars and its Nest, the smartest thermostat on the market — for now.

The kids aren't all right

On the heels of an Ontario election campaign that was dominated by fuzzy math in jobs numbers, a think-tank made headlines this week with some eye-popping numbers of its own.

The Broadbent Institute says private industry and government need to do more to create jobs for young people, the only demographic group that hasn't recovered all the jobs lost in the recession.

Economist Rick Smith told Amanda Lang this week that "Canada's approach to youth unemployment at the moment is not working."

"In fact youth unemployment in our country right now is worse than it was pre-recession," he said.

Smith is calling on government and the private sector to each pitch $670 million into a fund that will give young workers a kickstart to their careers by creating 200,000 temporary gigs for 12 weeks.

Pride, not prejudice

With the world converging in Toronto for World Pride this week, the outgoing CEO of Toronto-Dominion Bank said encouraging diversity isn't just the right thing to do — it's also good for the long-term health of a business.

"The only way you can make people their best is to allow them to be their true selves," Ed Clark said, "and if you allow prejudices to get in to your institution you inhibit people from being everything they can be."

That's more than just tokenism. "We're not in here for the money," he said of the bank's Pride participation. "You have to start and say this is the right thing to do," he says, even going as far as encouraging customers and employees, in the past, of working with a different bank if they found the bank's policies not to their liking.

The bank's stellar record of shareholder returns over the last several decades is a strong argument in favour of the notion that Pride doesn't necessarily goeth before a fall in profits.

Staycations on the rise

And finally, some surprising results of a BMO-sponsored poll this week shows that Canadian have just as strong an appetite to travel as ever this summer — but we're staying closer to home.

The bank found that while Canadians plan on spending a little less this year on their summer vacation, eight out of 10 Canadians still say they plan on visiting some part of Canada this summer.

For those cutting back, finances were listed as the No. 1 reason, with more than a third of respondents said high gas prices were curbing their desire to give in to wanderlust.

That's all for this week. Check back with us daily for more business news on our website, and follow us on Twitter here

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Pick-and-Pay cable would mean changes to local TV funding, say Bell, Rogers

Two of Canada's biggest telecommunications companies, Bell and Rogers, are clashing over the future of local television and who should pay for it.

In its submissions to the CRTC, Bell said it believes changes should be made by the regulator to allow local TV stations to be reclassified as "local specialty services."

The move, said Bell, which is owned by telecommunications giant BCE Inc. (TSX:BCE), would allow stations to charge broadcast distributors, such as cable companies and satellite TV firms, wholesale rates subject to existing must-carry rules.

The money generated would be combined with advertising revenues and go towards supporting local television, it said.

However, fellow telecom giant Rogers Communications (TSX:RCI.B) says it won't support the plan for the new expenses, which it feels would likely filter down to the cable bills of customers.

"We are trying to avoid what some of the other groups are doing, which is loading up consumers with a lot of new fees," Ken Engelhart, senior vice-president of regulatory for Rogers, said in an interview.

In addition to Bell, BCE owns 30 local television stations including the CTV network as well as 35 speciality channels. The company also provides TV service by satellite and through its Fibe TV offering.

Rogers owns a smaller slate of 11 local TV stations under the City and OMNI banners.

Specialty channels

The disagreement came as the CRTC wrapped up a formal interventions process on Friday, part of its public consultations where it has collected comments from Canadians and the industry on the evolution of the broadcasting system.

While the public consultations were designed to take into account various aspects of the future of TV broadcasting, much of the focus has been on the so-called pick-and-pay model for cable television, which would give consumers more choice, rather then being locked into expensive bulk specialty channel packages.

The CRTC doesn't want consumers to be locked into expensive bulk specialty channel packages. (The Canadian Press)

Each telecommunications company highlighted its own concerns in their filings or statements issued Friday afternoon.

Some concerns within the industry were that the pick-and-pay concept could dramatically increase the price of paying for a single channel, basically pushing consumers into buying specialty channel packages they didn't want in the first place.

Bell said it supports pick-and-pay and believes Canadians "shouldn't have to pay for channels they don't want just to get the channels they do."

Shaw Communications said it wanted the CRTC to ensure that consumers aren't forced to purchase certain high-cost services, like sports, as part of their basic cable packages.

'Canada's sports services have overestimated the desire of Canadians to pay for their services.'- Telus submission

Telus (TSX:T) said it stands behind consumers having the option to choose which channels they want but that for consumers to benefit "those choices must be reasonably priced."

"In our submission, we propose some measures to address the spiralling cost of programming services, especially sports services, as well as restrictive requirements from channel owners that we bundle their offerings rather than offering them a la carte," Telus said.

"We urge the CRTC to ensure all Canadians continue to be able to access the content they want through the provider and technology of their choice."

More choice on packages wanted

In an executive summary on its submission, Telus added there was no link between the wholesale rate sought by sports specialty services and consumer willingness to pay.

"In their continuous attempts to out-bid each other on the acquisition of sports content rights, Canada's sports services have overestimated the desire of Canadians to pay for their services," the summary said.

"The commission needs to establish rules to negate the incentive for irrational bidding and thus ensure that sports services in Canada remain affordable and do not subject all Canadian TV subscribers to a sports tax."

The deadline for submissions was 8 p.m. ET on Friday.

'I think that if a specialty channel cannot attract enough viewers to financially survive, then they should fail.'- Brian Tychie, consumer

The public voiced its opinions in submissions on the CRTC's website, highlighting concerns with various issues that could shape how Canadians watch television, including the pick-and-pay model.

"For some this may be a significant savings, for others perhaps not, but any action that allows households choice will get my support," Jane Harrison of Picton, Ont., said in a comment posted on the CRTC site.

Brian Tychie, an Ottawa resident, posted that he pays for hundreds of TV channels yet he can never find anything worth watching.

"I think that if a specialty channel cannot attract enough viewers to financially survive, then they should fail," he wrote.

Other issues that could shape the future of Canadian television were highlighted in the comments, including the presence of the CBC.

"Please see the value in keeping the CBC as it is. It is my tax dollars well spent," said Bernetta Starkey of Elmvale, Ont. "To hear what the Albertans are thinking about the fisheries and Quebecers about the gas line is important to maintaining a sense of nation."

Some comments emphasized support for U.S. public broadcasters remaining outside of the pick-and-pay model.

"As a contributor to these stations ... I feel they provide a much needed, well-balanced alternative," said Frances Thompson.

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Pershing Square can go ahead with its call for Allergan shareholder meeting

Pershing Square Capital Management will begin to seek support from Allergan shareholders to call a special meeting to remove six directors after reaching a deal that ensures the Botox maker's poison pill defence from a hostile takeover bid isn't triggered.

Pershing Square Capital Management will begin to seek support from Allergan shareholders to call a special meeting to remove six directors after reaching a deal that ensures the Botox maker's poison pill defence from a hostile takeover bid isn't triggered.

The activist investment firm, which controls a 9.7 per cent stake in Allergan, is teamed up with Valeant Pharmaceuticals in the company's hostile takeover attempt.

"This resolution provides the clarification we were seeking to allow Allergan shareholders to proceed with the process of calling a special meeting without fear of tripping the pill," Pershing chief Bill Ackman said in a statement.

Investors holding 25 per cent of Allergan's shares need to support the call for a special meeting for one to be held.

The agreement avoids a trip to court for the companies after Pershing Square sued Allergan, arguing that the company's bylaws were making it difficult to gather the required support.

"The rights agreement was drafted in a manner to allow Allergan stockholders to seek to call a special meeting, and the stipulation simply makes it clear how the bylaws and the rights agreement work together," Allergan said in an email.

Quebec-based Valeant said the settlement ensures that Pershing's efforts to call a meeting won't further be delayed.

"We remain committed to the value-creating combination of Valeant and Allergan and are moving forward with our exchange offer," said spokeswoman Laurie Little.

Analyst Alex Arfaei of BMO Capital Markets said the deal puts Valeant "another step closer" in its pursuit of Allergan.

He said with hedge fund manager John Paulson's reported recent support of a deal, Valeant and Pershing need about another 13 per cent to call the special meeting.

"Given the significant overlap in Valeant and Allergan investors, we continue to believe that Valeant and Pershing Square should eventually be successful in their attempts to gain support from 25 per cent of Allergan shareholders to call the special meeting in an attempt to change the Allergan board," he wrote in a report.

Valeant chairman and CEO Michael Pearson has said that at least 20 per cent of Allergan shareholders are owned by arbitrage investors and hedge funds who are likely supportive of a deal.

Allergan has repeatedly refused to meet with Valeant to discuss its more than $50-billion US stock-and-cash bid.

It says the $72 US in cash and 0.83 of a Valeant share for each Allergan share offered undervalues the company and creates significant risks and uncertainties for its shareholders.

Allergan and Valeant's shares were up in Friday trading. Allergan's shares gained $1.65 at $172.20 in afternoon trading on the New York Stock Exchange, while Valeant shares gained $1.66 at $128.16.

In Toronto, Valeant shares were up $1.27 at $136.56.

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Supreme Court sides with Quebec unionized Wal-Mart workers

The Supreme Court of Canada has sided with the union representing former Wal-Mart employees who claimed the company violated Quebec labour law when it abruptly closed its store in Jonquière, Que., not long after the workers voted to unionize.

In a 5-2 decision delivered Friday morning, the court ruled that the 190 employees who were terminated when the store was closed are entitled to compensation.

Bernard Philion​, one of the lawyers who represented the United Food and Commercial Workers Union in the nearly decade-long battle, said the decision sends a message. 

"No matter how big the employer is, the Quebec legislation protects workers and their rights," he said. 

The Wal-Mart employees in Jonquière became the first in North America to be unionized when they joined the union in 2004.

However, attempts to reach a collective agreement failed.

On Feb, 9, 2005, the contract issue was sent to arbitration, but that same day, Wal-Mart told the workers it was closing the store. The store eventually closed on April 29, 2005, putting approximately 190 employees out of work.

The company said the store wasn't profitable, but appellants said the employer shut it down in response to the labour dispute.

The union's first attempt at legal action against the retail giant failed when, in 2009, the Supreme Court ruled that the workers' freedom of association rights weren't violated when the company decided to close the store.

However, the union filed a new appeal with the Supreme Court in 2013, this time arguing that the company violated a provision of the Quebec labour code by changing the workers' conditions of employment without consent while the terms of the collective agreement were being negotiated.

The court found Wal-Mart did not adequately prove the four-year-old store was in financial difficulty.

A spokesman for Wal-Mart Canada told CBC News in Montreal that the company is "disappointed" with the decision. 

"We will review the decision carefully in order to determine what our next steps will be," Alex Roberton, Wal-Mart Canada's director of corporate affairs, said in an email. 

Friday's ruling states that the Wal-Mart employees could be entitled to compensation beyond the severance pay they received when they were terminated. 

Wal-Mart has fought against worker unionization at several other Quebec stores.

In Gatineau, Que., Wal-Mart closed a tire and oil change garage in 2008, only a few months after workers there obtained the first collective agreement in the history of the Arkansas-based company. 

In 2010, workers at another Gatineau store won a collective agreement, becoming only the second group of workers to do so at any Wal-Mart store in North America 

A year later, the employees requested that the union at the store be decertified.

Michel Grant, a labour relations expert and associate professor at the University of Quebec at Montreal, said the Supreme Court decision is a significant step forward for workers and organized labour across Canada. 

"The message which is sent to other employers is if you decide implicitly, because I don't know many employers who will say explicitly that they closed because the unions came in to their enterprise, that if you do it for that reason, there will be a price," he said. 

"The impact is not only for the Wal-Mart workers. It's also for all the workers who may have less fear to unionize and thinking that unionization is not synonymous with closure and losing their jobs."

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Loonie takes aim at 94 cents US

The Canadian dollar tested six-month highs Friday, but analysts say they don't expect the loonie's recent strength to be the new normal.

The Canadian dollar rose almost three-tenths of a cent to close at 93.80 cents US Friday — its fourth consecutive day trading higher following a strong inflation report last Friday. That's its highest level since the first week of January.  

The loonie hit a 2014 low of 88.94 cents on March 20, after a steady slide down from 98 cents in September and 96 cents as recently as November.

But don't expect the loonie to keep rising, foreign exchange experts say.

"The Canadian economic backdrop is not strong enough to withstand CAD/USD parity," Camilla Sutton, chief foreign exchange strategist at Scotiabank, told CBC News.

"A strong currency would weigh on exports and suppress inflation at a time when the economy is already fairly vulnerable and would relieve any pressure on the [Bank of Canada] to increase interest rates, likely fuelling financial stability risk."

Higher oil prices, inflation fuel loonie

Sutton also notes that investors had built up a large short position in the Canadian dollar during the fall and early winter. "This has fallen victim to short covering, driving a more dramatic move in [the Canadian dollar]."  She sees the Canadian dollar as being "well overvalued."

Oil prices, which have moved above $105 US a barrel, and Canada's May inflation figures, which showed annual inflation rising at an unexpectedly high 2.3 per cent, have also boosted the loonie.

"Higher oil prices (in the wake of the Iraq crisis) and higher inflation readings (with their presumed dimming of [Bank of Canada] rate cut prospects) helped strengthen the Canadian dollar to ... the strongest level since the start of the year," says a rate forecast from Michael Gregory, deputy chief economist with BMO Capital Markets.

"It also helped that the end-of-May release of Canadian GDP data revealed relatively stronger performance than south of the border."

BMO forecasts that the loonie will weaken dramatically through 2015, with a U.S. dollar costing $1.15 Cdn to buy by the end of that year. That converts to an exchange rate of 87 cents US.

Weak U.S. data

It's clear that broad weakness in the U.S. dollar is playing a major role in the Canadian dollar's recent strength.

According to data from Bloomberg, the American currency slipped Friday to its lowest level against a basket of major currencies in seven weeks.

The greenback's slump this week followed news that the U.S. economy contracted in the first quarter at an annual rate of 2.9 per cent.

"It's been a bad week in terms of the data released from the U.S., which has shown that the economy's a lot weaker than people anticipated," Lee Hardman, a foreign-exchange strategist at Bank of Tokyo-Mitsubishi UFJ, told Bloomberg.

"That's prompting investors to downgrade their outlook for growth this year in the U.S. and that's leading to lower yields and a lower [U.S.] dollar."

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Google gadgets, why Pride pays & summer of staycations: Business Week Wrap

An interesting week in financial news opened with a developer conference hosted by Google that showed what the technology giant has up its sleeve in its continuing attempts to move beyond being just a search engine on your desktop computer, and become an all-encompassing technological arm touching every aspect of your life.

The trend among the audience of more than 6,000 developers was a movement toward more wearable computing, and more details on other consumer products like the company's driverless cars and its Nest, the smartest thermostat on the market — for now.

The kids aren't all right

On the heels of an Ontario election campaign that was dominated by fuzzy math in jobs numbers, a think-tank made headlines this week with some eye-popping numbers of its own.

The Broadbent Institute says private industry and government need to do more to create jobs for young people, the only demographic group that hasn't recovered all the jobs lost in the recession.

Economist Rick Smith told Amanda Lang this week that "Canada's approach to youth unemployment at the moment is not working."

"In fact youth unemployment in our country right now is worse than it was pre-recession," he said.

Smith is calling on government and the private sector to each pitch $670 million into a fund that will give young workers a kickstart to their careers by creating 200,000 temporary gigs for 12 weeks.

Pride, not prejudice

With the world converging in Toronto for World Pride this week, the outgoing CEO of Toronto-Dominion Bank said encouraging diversity isn't just the right thing to do — it's also good for the long-term health of a business.

"The only way you can make people their best is to allow them to be their true selves," Ed Clark said, "and if you allow prejudices to get in to your institution you inhibit people from being everything they can be."

That's more than just tokenism. "We're not in here for the money," he said of the bank's Pride participation. "You have to start and say this is the right thing to do," he says, even going as far as encouraging customers and employees, in the past, of working with a different bank if they found the bank's policies not to their liking.

The bank's stellar record of shareholder returns over the last several decades is a strong argument in favour of the notion that Pride doesn't necessarily goeth before a fall in profits.

Staycations on the rise

And finally, some surprising results of a BMO-sponsored poll this week shows that Canadian have just as strong an appetite to travel as ever this summer — but we're staying closer to home.

The bank found that while Canadians plan on spending a little less this year on their summer vacation, eight out of 10 Canadians still say they plan on visiting some part of Canada this summer.

For those cutting back, finances were listed as the No. 1 reason, with more than a third of respondents said high gas prices were curbing their desire to give in to wanderlust.

That's all for this week. Check back with us daily for more business news on our website, and follow us on Twitter here

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GM issues 4 more recalls covering 500,000 vehicles; 57,000 in Canada

General Motors announced late Friday four more safety recalls covering more than half a million vehicles worldwide, including more than 57,000 in Canada.

It's the 48th recall the automaker has announced this year. More than 20 million vehicles have been targeted. That's more than the number of cars GM sold in the U.S. in all of 2013.

The biggest of Friday's recalls affects almost 467,000 four-wheel-drive Chevrolet Silverado and GMC Sierra pickups from the 2014 and 2015 model years, the 2015 Sierra Chevrolet Tahoe and Suburban, and the 2015 GMC Yukon and Yukon XL. More than 53,000 of the recalled vehicles were sold in Canada.

In these vehicles, GM says the transmission may electronically switch into neutral on its own. "If this occurs while a vehicle is in motion, no power will go to the wheels," says a GM release. The release goes on to say if the vehicle is stopped or parked, it may roll away if the parking brake is not set. The automaker says it knows of no crashes or injuries related to the issue.

In the second largest recall, dealers have been instructed to replace the driver's side airbag inflator in more than 33,000 2013 and 2014 Chevrolet Cruze sedans. Just over 4,000 of the affected vehicles are in Canada.

GM says the driver's front airbag may rupture, sending metal pieces into the passenger compartment, or the airbag may not inflate in a crash. The company says it's aware of one injury related to this issue. Reuters says an airbag accident that left a Georgia woman blind in one eye led to the Cruze recall order.

The other two recalls are smaller:

• Just over 2,000 2014 Chevrolet Corvettes (33 in Canada) are being recalled to replace faulty rear shock absorbers.
• Almost 4,800 2013-2014 Chevrolet Caprice police cars and 2014 Chevrolet SS sport sedans are being called back to inspect possibly defective windshield wipers. The affected vehicles were all sold in the U.S. 

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Quebec unionized Wal-Mart workers win Supreme Court victory

The Supreme Court of Canada has sided with the union representing former Wal-Mart employees who claimed the company violated Quebec labour law when it abruptly closed its store in Jonquière, Que., not long after the workers voted to unionized.

In a 5-2 decision delivered this morning, the court ruled that the 190 employees who were terminated when the store was closed are entitled to compensation.

The Wal-Mart employees in Jonquière were the first in North America to be unionized when they joined the United Food and Commercial Workers Union in 2004.

However, attempts to reach a collective agreement failed.

On Feb, 9, 2005, the contract issue was sent to arbitration, but that same day, Wal-Mart told the workers it was closing the store. The store eventually closed on April 29, 2005, putting approximately 190 employees out of work.

The company said the store wasn't profitable, but appellants said the employer shut it down in response to the labour dispute.

The union's first attempt at legal action against the retail giant failed when, in 2009, the Supreme Court ruled that the workers' freedom of association rights weren't violated when the company decided to close the store.

However, the union filed a new appeal with the Supreme Court in 2013, this time arguing that the company violated a provision of the Quebec labour code by changing the workers' conditions of employment without consent while the terms of the collective agreement was being negotiated.

The court found Wal-Mart did not adequately prove the four-year-old store was in financial difficulty.

Today's ruling states that the Wal-Mart employees could be entitled to compensation beyond the severance pay they received when they were terminated. 

Wal-Mart has fought against worker unionization at several other Quebec stores.

In Gatineau, Que., Wal-Mart closed a tire and oil change garage in 2008, only a few months after workers there obtained the first collective agreement in the history of the Arkansas-based company. 

In 2010, workers at another Gatineau store won collective agreement in 2010, becoming the only the second group of workers to do so at any Wal-Mart store in North America 

A year later, the workers applied to decertify from the union. 

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Sobeys closing 50 stores across Canada

Closing some stores will enhance the overall performance of the chain, CEO Marc Poulin said. (Nathan Denette/Canadian Press)

Grocery store chain Sobeys Inc. will close about 50 underperforming stores across Canada following its $5.8-billion acquisition of Safeway.

The company made the announcement in an earnings release on Thursday from Empire Inc., parent company of Sobeys. 

"During the fourth quarter of fiscal 2014, Sobeys completed a detailed full review of its retail store network," the company said. "Based on this detailed review, Sobeys has determined that consistently underperforming stores, representing approximately 50 stores ... and 3.8 per cent of the total retail network gross square footage will close."

About 30 of the stores are in Western Canada, the company said, without divulging any more details about specific locations. But CIBC analyst Perry Caicco, who covers the company, said in a research note "it is probable that 20 of these closures will be in the terrible Ontario market."

Sobeys' parent company says it will close four Sobeys locations in Calgary as well as one Safeway store there in the coming months.

• Sobeys Deer Point, 14939 Deer Ridge Drive S.E.
• Sobeys Fairmount, 9919 Fairmount Drive S.E.
• Sobeys Douglas Square, 11520 24 Street S.E. 
• Sobeys London Town, 3545 32 Avenue N.E.
• Glenmore Safeway in Ogden, 7740 18 Street S.E. 

A store on Front St. in downtown Toronto was also shuttered on Thursday. The store closures will "strengthen the quality of our store network and is expected, along with other initiatives, to enhance overall performance and net earnings," CEO Marc Poulin said.

The 213 stores it acquired in the Safeway deal are in Western Canada and the Competition Bureau has already ordered Sobeys to sell 23 stores.

The move comes as Sobeys and other grocers are finding their margins squeezed as well-financed U.S. players such as Wal-Mart and Target set up shop here.

The company made the announcement as its earnings results showed profit up slightly to $131.3 million and revenue up to $5.94 billion — just shy of expectations.

The store closure plan will come with a restructuring charge of $169.8 million

It also upped its dividend 3.8 per cent to 27 cents a share.

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Russia haggles over Ukraine ceasefire extension

Russia would welcome a three-day extension of a ceasefire in east Ukraine but it must not simply delay an "ultimatum" for  separatists to lay down their arms, Foreign Minister Sergei Lavrov was quoted as saying on Friday.

"We hope that this does not only mean a postponement of the ultimatum for three days," Lavrov was quoted by Interfax news agency as telling reporters in Moscow after Itar-Tass news agency reported that Kiev had decided to extend the ceasefire.
 
Ukrainian President Petro Poroshenko, speaking in Brussels at the European Union summit, said he would decide later on Friday whether to extend the week-long unilateral ceasefire with insurgents.

In an interview with the Guardian and four other European newspapers, he said Ukrainian soldiers have been targeted in more than 150 attacks since the ceasefire began and that five soldiers have been killed on Friday alone. Poroshenko said Russia has done "nothing" to end the "distastrous" war.

On Thursday, he said he might not extend the truce if it appeared that rebel groups were using the break in fighting to rearm. When he announced the ceasefire on June 20, he offered rebels amnesty if they lay down their weapons.
 
Pro-Russian separatist leaders and mediators for the Kyiv government met in the city of Donetsk on Friday in new consultations on ending the fighting in Ukraine's Russian-speaking east, a spokeswoman for the rebels
said.
 
Interfax news agency said the rebels were talking to the so-called "contact group" which includes former President Leonid Kuchma, Moscow's ambassador to Kyiv and representatives of the OSCE rights and security watchdog.

A first round of talks was held last Monday and ended with a rebel commitment to honour the ceasefire.

But the Kyiv government says the rebels have carried out numerous breaches of the ceasefire over the past week, including the downing of a military helicopter on Tuesday killing nine service personnel.  

Ukraine, EU sign trade, economic pact

In a separate development, Poroshenko on Friday signed a trade and economic pact with the European Union, saying it may be the "most important day" for his country since it became independent from the Soviet Union.

It was the decision of his pro-Moscow predecessor, Viktor Yanukovych, to back out of the same EU association agreement in November that touched off massive protests in Ukraine that eventually led to Yanukovych's flight abroad, Russia's annexation of the Crimean Peninsula and the ongoing tensions between Russia and Ukraine.

Ukraine's President Petro Poroshenko signed a broad political and trade accord with the European Union on Friday, making a historic shift away from Russia and closer to the West. (Philippe Wojazer/Reuters)

Later Friday, EU heads of state and government were expected to consider whether to ramp up sanctions against Russia over its conduct toward Ukraine.

Before the signing ceremony, Poroshenko brandished a commemorative pen inscribed with the date of EU's Vilnius summit where Yanukovych balked at approving the agreement.

"Historic events are unavoidable," he said.

At Friday's proceedings, the European Union signed similar association agreements with two other former Soviet republics, Moldova and Georgia.

Businesses in the three countries whose goods and practices meet EU standards will be able to trade freely in any of the EU's 28 member nations without tariffs or restrictions. Likewise, EU goods and services will be able to sell more easily and cheaply to businesses and consumers in Ukraine, Georgia and Moldova.

"It's absolutely a new perspective for my country," Poroshenko said.

"There is nothing in these agreements or in the European Union's approach that might harm Russia in any way," insisted EU President Herman Van Rompuy. But almost immediately, Moscow made clear it was reserving the right to react.

Russian reaction

Dmitry Peskov, a spokesman for President Vladimir Putin, told Russian news agencies that the Kremlin would respond to the EU-Ukraine accord "as soon as negative consequences arise for the economy."

But Peskov dismissed the threat of immediate action against Poroshenko's government. "In order for those (consequences) to arise, the signed agreement needs to be implemented," he said.

Russian President Vladimir Putin has previously imposed trade embargoes against its neighbours in response to political or economic moves that the Kremlin views as unfavourable. (Bernadett Szabo/Reuters)

Russia has previously imposed trade embargoes against its neighbours in response to political or economic moves that the Kremlin views as unfavourable.

European Commission experts estimate implementation of the deal is expected to boost Ukraine's national income by around $1.6 billion US a year. EU Enlargement Commission Stefan Fule said the trade bloc has made clear to Moscow its willingness to demonstrate that Russian economic interests will not be harmed.

Perhaps more important than the trade clauses is an accompanying 10-year plan for Ukraine to adopt EU product regulations. Such rules ease the way for international trade beyond Europe.

The deal also demands that Ukraine change the way it does business. Adopting EU rules on government contracts, competition policy and the copyright for ideas and inventions should improve the economy by making it more investor-friendly and reducing corruption.

Reminding EU leaders of the Ukrainians who died opposing Yanukovych's government and in the ongoing battle against the pro-Russian insurgency in the country's east, Poroshenko said Ukraine "paid the highest possible price to make her Europe dreams come true."

He asked EU leaders to take a further step, and formally pledge that one day Ukraine will be able to join the EU as a full-fledged member. That "would cost the European Union nothing, but would mean the world to my country," he said.

Putin calls for long-term ceasefire

Meanwhile, Putin called Friday for a long-term ceasefire in Ukraine to allow talks between representatives of Kyiv and eastern regions where rebels are waging an armed insurgency.

Poroshenko has warned a ceasefire now in place may not be extended beyond Friday night when it is due to expire if peace talks with pro-Russian separatists fail to yield a favourable outcome.

"Most important is the securing of a long-term ceasefire as a necessary condition for substantive talks between the authorities in Kyiv and representatives of the southeastern regions," Putin said.

"We sincerely strive to help the peace process," he told delegates at a diplomatic ceremony in the Kremlin.

Western governments have piled pressure on Putin to take steps to disarm the rebels who Kyiv accuses of numerous breaches of the truce aimed at giving the two sides time to find a political solution to the crisis.

Putin also said that the violence in Ukraine had forced tens of thousands of Ukrainians to seek refuge abroad, including in Russia.

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CRTC races to stay ahead of telecom system in flux

The chair of the Canadian Radio-television and Telecommunications Commission admits the regulator is dealing with an outdated rulebook and says his goal is to modernize the entire system by the end of his five-year term.

Jean-Pierre Blais, who took over the role from Konrad von Finckenstein in 2012, has the task of regulating a wireless, telephone, internet and broadcasting sector in the midst of unprecedented change.

"We're trying to get ahead of the curve. We've got three big proceedings this fall and they're all about setting the stage for the future of Canada's telecommunications system," he said in an interview with CBC's Amanda Lang.

Hearings are scheduled to:

• Look at the state of television and determine new rules for cable offerings.
• Look at wireless roaming rates.
• Set new terms for private radio.

That list only scratches the surface of the changes in broadcasting and communications. Canadians have changed their TV watching habits and expect to watch TV online or on mobile devices, so how should the regulator be involved with that?

Wireless and telecom services are increasingly carrying data – so what rules can ensure all Canadians have fair access to networks that can handle internet?

The model for traditional radio or TV broadcasting is less and less sustainable, with conventional networks losing money, so how can a federal agency ensure Canadian content in the face of cash-strapped broadcasters?

"Everything is changed now. Everyone realizes the way they consume their onscreen content has changed. Yes, there's still people who watch in the traditional way in the family room ... but people are also seeing it on the move, in mobile devices," Blais said.

"I think there's a realization, even in the past 12 months, I see there is a facing the fact that the world will be fundamentally different," he added.

Consultation with Canadians on TV

That's one reason why Canadians were consulted first to determine which direction the CRTC should take on regulating cable and providing channel choice.

"We're trying to get Canadians, regulated industries, producers, those that watch TV together in a room and say 'OK how can we prepare in a sustainable way for the next five to 15 years?'" Blais said.

What Canadians said was that they wanted more flexible choices on cable and satellite, rather than bundled subscriptions, but Blais warns there is a price to be paid for choice.

"We proposed a model that is the subject of our TV policy consultation where you could have the choice of purchasing on a pick and pay or stand-alone basis. People often forget there is the word 'pay' in the pick and pay option," he said.

"We're also going to explore a smaller offering – having a basic that goes back to basic."

Providing Canadian content is in the public interest and the CRTC will continue to play a role in ensuring Canadian stories are told and there is money to do it, he said.

Canadian content part of mandate

"Yes we have content from the U.S., it's great content in the English-language market and it's very popular, but we have to be able to see the news and information in our neighbourhoods, in our towns and our cities and our country – a Canadian perspective. That's important because it defines us as who we are," Blais said.

Blais said the CRTC's role as a regulator is to balance public interest.

"All broadcasters, even private broadcasters, have a public service role. That's the reason they have access to these airwaves – they have to give back," he said.

On Wednesday, the CRTC revised rules for the national Do Not Call system that was set up in 2008 to prevent unwanted phone calls from telemarketers.

The CRTC ruled that Canadians will no longer be required to register their numbers every five years to keep them active on the list — despite industry opposition to permanent registrations. On Thursday, Blais said in a speech that the CRTC is also reviewing ways to extend its reach and track down international telemarketers that don't abide by Canadian rules.

"It's our job to make sure citizens can enjoy peace and quiet in their homes and a more secure online world," he said.

Amanda Lang's interview with Jean-Pierre Blais will air Friday afternoon on The Lang & O'Leary Exchange.

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Encana to sell Bighorn assets to Jupiter Resources for $1.8B

Encana has focused on cost-cutting so far under Doug Suttles. (The Canadian Press)

Calgary-based energy company Encana will sell its Bighorn operations in Alberta to another Alberta-based ompany, privately-held Jupiter Resources for $1.8 billion.

The deal includes about 1,500 square kilometres of land in Alberta containing total net proved reserves of about 1.1 trillion cubic feet of predominantly natural gas. But Encana said the deal also includes the company`s working interests in all pipelines, facilities and service arrangements in the area.

"Bighorn is a high quality asset that has not been receiving significant investment in 2014," Encana CEO Doug Suttles said in a statement. "Going forward, it should serve as an excellent foundational asset for Jupiter Resources."

The deal is expected to close in the third quarter of this year.

The deal is the latest move by Encana to retrench to its core assets since Suttles took over and announced a cost-cutting program that includes axing job and slashing the company`s dividend

Suttles says in future, the company wil focus its efforts on a half-dozen high quality resource assets across the continent, instead of maintaining interests in up to 30 scattered all over.

In March, Encana reached a deal to sell Wyoming's Jonah field, one of the America's largest natural gas fields, for $1.8 billion to an affiliate of TPG Capital, a global private investment firm.

In May, the company said it would spend about $3.1 billion to by the oil-rich Eagle Ford Shale assets in Texas.

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Great Lakes' low water levels could cost $19B by 2050

Unclear if water level rebound since 2013 is start of a trend, new report by the Mowat Centre says

The Canadian Press Posted: Jun 26, 2014 10:49 AM ET Last Updated: Jun 26, 2014 10:49 AM ET

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A new report by a public policy think tank says low water levels in the Great Lakes and St. Lawrence River could result in severe economic fallout for the region.

The Mowat Centre study says it could cost the United States and Canada more than $19 billion by 2050 if water levels remain low.

The report says water levels in the Great Lakes and St. Lawrence basin "fell dramatically" in 1997-98.

Since then, it says much of the basin has experienced the longest extended period of lower water levels since the two countries began tracking levels in 1918.

The report adds that while water levels have "rebounded" since 2013, due to factors including cooler temperatures in winter, it's "unclear" if this is the beginning of a trend.

The Great Lakes — which hold about 20 per cent of the world's surface freshwater supply — are also home to industries including hydroelectricity and commercial shipping, as well as recreational boating and fishing.

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Google starts editing EU search results post privacy ruling

Google has begun deleting some search results at the request of its users, following a court ruling that European Union citizens have a right to ask for the removal of embarrassing personal information that pops up on a search of their names.

Several weeks after the May ruling by the European Court of Justice on the so-called "right to be forgotten," the company set up an online interface for users to register their complaints.

The company said Thursday it has begun taking down results this week. But Google's European spokesman Al Verney said there is a significant backlog to work through. At last report, more than 50,000 people from multiple nationalities had filed requests to have information removed.

"Each request has to be assessed individually," Verney said.

The company is not releasing information on what percentage of complaints appear to fall into areas the court specified as potentially objectionable: results that are "inadequate, irrelevant or no longer relevant."

Europe's national data protection agencies have said they expect a mixed bag of 'legitimate' complaints, as well as some that are clearly not and some borderline cases.

Critics of the ruling say removing result links is censorship, and will lead to politicians and criminals requesting elimination of information. But supporters note the court specified Google should not remove links to information when the public's right to know about it outweighs an individual's right to privacy.

Under the system Google has set up, any search on a user's name from within the European Union is supposed to show a warning that information may have been removed due to privacy considerations, though the system is not yet fully operational.

In cases where the company decides to reject a response to scrub results, it informs the person that complained of its decision. Then it tells them how to contact their national data protection agency if they disagree with the decision and want to pursue the matter further.

Google is only deleting information that appears on its own results pages. It has no control over information on external websites, which did not fall under the court's ruling.

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Pay TV won the Aereo battle, but they haven't won the cord-cutting war

Although Aereo lost a landmark court decision, the underlying business case for conventional paid television has been shaken to its core, experts say. (Ed Bailey/Associated Press)

Just because Aereo's business model has been shot down by the Supreme Court, that doesn't mean customers' desire for a better TV experience has gone away.

People are still fed up with huge channel bundles, high prices, poor service and the lack of ability to watch all their shows on all their devices. That's part of why Aereo was attractive: It offered local broadcast channels and a few others on multiple devices for just $8 a month.

Industry watchers say the pay TV business must continue to evolve to win over unhappy customers, even if the nation's top court said grabbing signals from the airwaves and distributing them online without content-owner permission isn't the way.

Long-term trend

"Even without Aereo, the reason people were cutting the cord, for cost reasons and so on, those don't go away," said Robin Flynn, an analyst with market research firm SNL Kagan.

Last year, the number of pay TV subscribers in the U.S. fell for the first time, dipping 0.1 per cent to 94.6 million, according to Leichtman Research Group.

Into that breach have leapt companies that have offered quality TV content online for low cost, like Netflix and Amazon. Hulu, which is owned by major broadcast networks ABC, NBC and Fox, offers full episodes of popular shows like The Colbert Report the next day for free.

While that's not live TV, which Aereo offered, for many it's a good-enough substitute.

The decision against Aereo is a setback, but not a fatal one for people who want to break away from traditional TV, said Bill Niemeyer, senior analyst at TDG Research.

"While the content on the major broadcast networks is very important for some people, it's not important for everyone," Niemeyer said. "So it's a dent, but I don't think it's going to significantly change the trends."

If anything, the rise and fall of Aereo has highlighted an important fact — that high-quality TV signals are available on the airwaves for free — something that might have been forgotten if Aereo hadn't insisted that its technology simply replicates the antenna and wire that an average person could set up on their own.

"What Aereo has really done in our perspective is to address the lack of understanding that over-the-air is free," said Mark Buff, CEO of Mohu, a company that makes flat indoor antennas that attach to walls.

Mohu has sold 1.5 million antennas since it began in 2011 and they work in the kind of dense urban areas like New York where Aereo is believed to have had a small subscriber base. It is about to launch Mohu Channels, a device that blends Internet video services like Netflix with free-to-air TV in a single channel guide.

"We certainly do see and believe that the cord-cutting movement is on the rise," he said.

Growing market

Alki David, the CEO of online streaming company FilmOn, said the Supreme Court's ruling actually creates an opportunity for startups because the court said that Aereo bears an "overwhelming likeness" to cable companies.

According to David, that means online video companies can compel broadcasters to license their TV signals under the "retransmission consent" rules outlined in the 1976 Copyright Act.

'Even without Aereo, the reason people were cutting the cord ... those don't go away'- Analyst Robin Flynn

That could help online video companies create small broadcast-channel only bundles for consumers rather than 100-plus channel packages from traditional pay TV operators that cost more than what some consumers are willing to pay.

"This might be the undoing of the bundling system," David said. "The only compulsory license we're after are the four or five local channels in the city we're in. Of course it would be great. What else can it mean?"

But it's not like the pay TV industry is standing still.

Incumbents fight back

Satellite TV company Dish Network Corp. said it's preparing to launch an online TV service with channels like ESPN, ABC, Disney Channel and others for about $20 to $30 a month before the end of the year. The target audience is young urban professionals who don't want to watch more than 20 or 30 channels.

Since last year, Comcast Corp. has offered a slimmed down package combining Internet service, a little more than 10 local TV channels and HBO for $40 a month for 12 months. That's just $10 more than getting the Internet alone.

Niemeyer says the incremental $10 charge for broadcast TV and HBO seems like a very Aereo-like offering, especially because the HBO GO app allows for online viewing, and having a pay TV subscription will allow customers to sign in to different online offerings by networks.

"It's something they wouldn't have done five years ago, but they're doing it," he said. "I think they're trying to think long-term about how to still be a big-dollar business. It means they have to change. They have to change on channel bundling, how they deliver services to people, using what pipes and how."

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Tsilhqot'in First Nation granted B.C. title claim in Supreme Court ruling

The Supreme Court of Canada has granted declaration of aboriginal title to more than 1,700 square kilometres of land in British Columbia to the Tsilhqot'in First Nation, the first time the court has made such a ruling regarding aboriginal land.

The unanimous 8-0 decision released Thursday resolves many important legal questions, such as how to determine aboriginal title and whether provincial laws apply to those lands. It will apply wherever there are outstanding land claims.

The decision, written by Chief Justice Beverley McLachlin, also has implications for future economic or resource development on First Nations lands.

'It only took 150 years, but we look forward to a much brighter future. This without question will establish a solid platform for genuine reconciliation to take place in British Columbia.'- Grand Chief Stewart Phillip, president of Union of B.C. Indian Chiefs

The case focused on the Tsilhqot'in First Nation's claim to aboriginal title over 440,000 hectares of land to the south and west of Williams Lake in the B.C. Interior.​

A B.C. Court of Appeal ruling in 2012 gave the Tsilhqot'in sweeping rights to hunt, trap and trade in its traditional territory. But the Court of Appeal agreed with the federal and provincial governments that the Tsilhqot'in must identify specific sites where its people once lived, rather than assert a claim over a broad area.

The Supreme Court of Canada has recognized the Tsilhqot'in First Nation's aboriginal title over a wide area to the south and west of B.C.'s Williams Lake, which it considers its traditional territory. (CBC)

The Tsilhqot'in, a collection of six aboriginal bands that include about 3,000 people, argued the court's decision failed to recognize the way its people had lived for centuries.

The court heard the Tsilhqot'in people were "semi-nomadic," with few permanent encampments, even though they saw the area as their own and protected it from outsiders.

In its decision, Canada's top court agreed that a semi-nomadic tribe can claim land title even if it uses it only some of the time, and set out a three-point test to determine land titles, considering:

• Occupation.
• Continuity of habitation on the land.
• Exclusivity in area.

The court also established what title means, including the right to the benefits associated with the land, and the right to use it, enjoy it and profit from it.

However, the court declared that title is not absolute, meaning economic development can still proceed on land where title is established as long as one of two conditions is met:

• Economic development on land where title is established has the consent of the First Nation.
• Failing that, the government must make the case that development is pressing and substantial, and meet its fiduciary duty to the aboriginal group.

In other words, the decision places a greater burden on governments to justify economic development on aboriginal land.

The court also makes it clear that provincial law still applies to land over which aboriginal title has been declared, subject to constitutional limits.

'Absolutely electrifying'

Grand Chief Stewart Phillip, president of the Union of B.C. Indian Chiefs, was with Roger William, who brought the case, and Tsilhqot'in chiefs when they learned of the top court's decision, and said the mood in the room was "absolutely electrifying."

"We all heard the decision at the same moment, and the room just erupted in cheers and tears. Everybody is absolutely jubilant. It's very emotional," Phillip told CBC News.

"It only took 150 years, but we look forward to a much brighter future. This without question will establish a solid platform for genuine reconciliation to take place in British Columbia.

"I didn't think it would be so definitive," Phillip added. "I was actually prepared for something much less. It's not very often that I'm without words, and I'm quite overwhelmed at the moment."

Mobile users, read the ruling here

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CBC to cut back supper-hour news, in-house productions

The CBC is shifting its priorities from television and radio to digital and mobile services, a move that will reduce staff, and supper-hour news broadcasts and programs produced in-house, says CBC president and CEO Hubert T. Lacroix.

"We used to lead with television and radio. Web came and then mobility came. We are reversing, we are inverting the priorities that we have," Lacroix said, referring to the broadcaster's 2020 strategy. "We're going to lead now with mobility, we're going to lead with whatever widget you use.

"You're going to see an investment in mobility that's going to rise as the investment in perhaps television ... is reduced."

Lacroix said there will be job cuts over the coming years, but they will be made in "prudent steps."

In 2020, the corporation will have 1,000 to 1,500 fewer employees. This would be in addition to the reductions announced to date.

Currently, 1,000 employees are eligible for retirement and through attrition, while about 300 leave every year, according to the broadcaster.

"The goal is that to be able to meet a financially stable and sustainable CBC/Radio-Canada, we have to reduce the infrastructures ... but we also have to reduce the number of people who are working at CBC/Radio-Canada," Lacroix said.

In April, Lacroix announced that funding shortfalls and revenue losses had forced the broadcaster to cut $130 million from its budget this year, a move that the CBC said will eliminate 657 jobs over the next two years and take the network out of competing for the rights to broadcast professional sports.

But Lacroix characterized Thursday's announcement as "a good day, it's an important day. This is a plan that's going to work."

No stations to close, Lacroix says

Lacroix said CBC won't close any of its stations across the country, but the 90-minute evening television newscasts will be reduced to either 30 minutes or 60 minutes.

"The base service across Canada is going to be 30 minutes. In some regions, depending on whether they're successful, the reaction of the audience, where there are revenue opportunities, our mandate, minority language commitments, conditions of licence, we are then going to go in some of these markets to 60 minutes."

Those services will be augmented by mobile and web services, he said.

The CBC's move to "significantly reduce" in-house production across the organization will exclude news current affairs and radio. This will mean fewer documentaries directly produced by the broadcaster.

"Why are we doing this? Again, to scale it down, to be able to open our content creation to other actors, other participants in the cultural industry," Lacroix said.

'We're in the business of content'

A number of CBC personalities have gone public with their opposition to the cuts.

Lacroix said this doesn't mean the CBC is "out of docs [documentaries]," but instead will use the whole of the creative community to fill the slots.

"To be the public broadcaster, we don't need to be always the producer," he said.

The CBC also plans to cut its real estate presence in half by approximately two million square feet.

At the Montreal station, for example, there will be a "substantial reduction in square feet." Toronto will also try to reduce its real estate by acquiring new tenants.

"If there should be an offer on the building, yes, we'd take it, but the offer on the building would not necessarily mean that we'd move away. We'd become a tenant. 

"We're not in the business of real estate. We're in the business of content," Lacroix added.

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Google developer conference: Android news expected

An Android update, wearable gadgets and so-called smart home devices are just some of the innovations Google is likely to show off at its two-day developer conference, which begins Wednesday in San Francisco.

In recent years, the conference has focused on smartphones and tablets, but this year Google's Android operating system is expected to stretch —into cars, homes and smartwatches.

Pacific Crest analyst Evan Wilson believes Google will unveil a new version of its Android operating system — possibly called Lollipop — with a "heavy focus" on extensions for smartwatches and smart home devices.

"We think Google will directly counter Apple's recent announcements of health products (Apple HealthKit) and home automation (Apple HomeKit)," Wilson wrote in a note to investors.

Google's I/O event comes at a time of transition for the company, which makes most of its money from advertising thanks to its status as the world's leader in online search. The company is trying to adjust to an ongoing shift to smartphones and tablet computers from desktop and laptop PCs. Though mobile advertising is growing rapidly, advertising aimed at PC users still generates more money.

At the same time, Google is angling to stay at the forefront of innovation by taking gambles on new, sometimes unproven technologies that take years to pay off —if at all. Driverless cars, Google Glass, smartwatches and thinking thermostats are just some of its more far-off bets.

On the home front, Google's Nest Labs —which makes network-connected thermostats and smoke detectors— announced earlier this week that it has created a program that allows outside developers, from tiny startups to large companies such as Whirlpool and Mercedes-Benz, to fashion software and "new experiences" for its products.

Integration with Mercedes-Benz, for example, might mean that a car can notify a Nest thermostat when it's getting close to home, so the device can have the home's temperature adjusted to the driver's liking before he or she arrives.

Nest's founder, Tony Fadell, is an Apple veteran who helped design the iPod and the iPhone. Google bought the company earlier this year for $3.2 billion.

Opening the Nest platform to outside developers will allow Google to move into the emerging market for connected, smart home devices. Experts expect that this so-called "internet of things" phenomenon will change the way people use technology in much the same way that smartphones have changed life since the introduction of Apple's iPhone seven years ago.

Google is also likely to unveil some advances in wearable technology. In March, Google released "Android Wear," a version of its operating system tailored to computerized wristwatches and other wearable devices. Although there are already several smartwatches on the market, the devices are more popular with gadget geeks and fitness fanatics than regular consumers. But Google could help change that with Android Wear. Android, after all, is already the world's most popular smartphone operating system.

Google may also have news about Glass, including when the company might launch a new and perhaps less expensive version of the $1,500 internet-connected eyewear. Google will likely have to lower the price if it wants Glass to reach a broader audience. But that's just one hurdle. Convincing people that the gadget useful, rather than creepy, is another one.

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Recreational property sales rebounding, Remax says

The Canadian Press Posted: Jun 25, 2014 7:31 AM ET Last Updated: Jun 25, 2014 7:31 AM ET

Realtor group Remax says young families and near and recent retirees are driving the majority of recreational property sales across the country.

Remax says sales are rebounding after a late spring and is forecasting a modest increase in sales and prices for cottages, cabins, vacation condos and camps throughout the rest of the year.

It says while some potential buyers may have been discouraged by the Canada Mortgage and Housing Corporation's recent decision to eliminate insurance on second mortgages, there has been little to no impact on sales from the change.

The national realtor group says Canada's strong residential real estate market in urban centres has had a spillover effect on recreational property sales with homeowners using equity gains in their homes to buy a second property.

Remax also says buyers are purchasing properties from where they can work throughout the summer and use all-year round.

Aa weaker Canadian dollar has prompted buyers to remain in Canada rather than buying south of the border, the company says.

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U.S. targets Canadian ships with proposed inspection fee hike

Canadian cargo ships may soon be facing a hefty new bill at American ports on the Great Lakes.

The U.S. Department of Agriculture has proposed a significant hike on inspection fees and the elimination of annual inspection caps on Canadian ships sailing the St. Lawrence Seaway and Great Lakes.

The Canadian shipping industry is crying foul.

Considered fees

The USDA also considered proposing fees for the following:

• Rail passengers
• Bus passengers
• Pedestrians
• Private aircraft
• Private maritime vessel

According to the Chamber of Marine Commerce's estimates, increased inspection costs for Canadian ships could more than double under the new rules.

Washington's proposed fee increase could increase a ship's annual cost of doing business by as much as 238 per cent, the chamber said.

"They are unjustified on the grounds of environmental risk and would make Canadian Great Lakes vessels less competitive against U.S. Great Lakes ships carrying the same products in the same waters," the chamber's president, Stephen Brooks, said in a media release.

It has proposed to raise the fees for agricultural quarantine and inspection services of ships from $496 to $825 per inspection.

The agency would also eliminate the annual fee cap of charging a maximum of 15 times per vessel.

"These staggering fee hikes fly in the face of President Obama's oft-spoken commitment to the efficient flow of goods between our two nations."

The United States Department of Agricultural Animal and Plant Health Inspection Service says the increase is needed to recover costs of performing the inspections.

Other vehicles subject to increase

It's also looking at adjusting current fees charged for certain agricultural quarantine and inspection services that are provided in connection with certain commercial trucks, railroad cars and aircraft.

Certain commercial rail cars are also subject to an inspection fee increase should they be approved by the U.S. government in December. (Canadian Press)

"We have determined that revised user fee categories and revised user fees are necessary to recover the costs of the current level of activity, to account for actual and projected increases in the cost of doing business, and to more accurately align fees with the costs associated with each fee service," the agency says in its proposal.

The agency reviews manifests and documentation accompanying incoming cargo. It also looks for contaminants, pests, or invasive species and inspects containers, compliant wood packaging material and packing materials.

Proposed Fee Increases

Fee service activity	Current	Proposed
Air passenger	$5	$4
Commercial aircraft	$70.75	$225
Commercial maritime cargo vessel	$496	$825
Commercial truck	$5.25	$8
Commercial truck transponder	$105	$320
Commercial cargo railcar	$7.75	$2
Sea passenger	No fee	$2
Treatments	No fee	$375

The Chamber of Marine Commerce has filed an official complaint with the U.S. Department of Agriculture, the agency behind the proposal.

"It's clear to us that Canadian Great Lakes-St. Lawrence ships have been caught in a system intended to prevent
international ships from bringing in pests and infestations from foreign ports. This does not apply to us as our vessels carry primarily non-agricultural products including minerals in bulk," Algoma Central Corporation CEO Greg Wright said in a release.

The fee increases were proposed in April. The comment period ended Tuesday. A final ruling is expected in December.

The Chamber of Marine Commerce says Canadian ships should be exempt since they never leave the bi-national Great Lakes area.

David Cree, president and CEO of the Windsor Port Authority, says the drastic changes would hamper business in Windsor.

He calls the port one of the Great Lakes' most vital shipping hubs.

"It's one thing to absorb increased costs over a period of time, but to have costs go up that quickly all in one year is very difficult to explain to the shipping industry that wants to use the Great Lakes," Cree said.

Cree says the changes would affect both shippers and consumers.

"Impact on costs can certainly have an impact on end users and cost end users, so we're concerned about an increase of that magnitude and share the Chamber of Marine Commerce's sentiments," he said. "We need to have a careful look at it."

Canadian Great Lakes ships carry more than 33 million tonnes of products across the border. Their cargo includes iron ore for steel production; coal for energy production; salt for winter de-icing; and construction materials.

The bi-national Great Lakes-St. Lawrence Seaway marine industry generates $35 billion in business revenues and supports 227,000 jobs in the U.S. and Canada, the Chamber of Marine Commerce says.

Marine Chamber of Commerce (PDF)
Marine Chamber of Commerce (Text)

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