Argentina defaults again as debt talks break down

Debt talks between U.S. hedge funds and Argentina collapsed late Wednesday, and the country entered its second default since 2000.

Ratings agency Standard & Poor's declared Argentina had entered what's known as "selective default" after failing to make a deal with creditors on a $539-million bond payment. 

Technically, that means the bondholders have the right to demand immediate and full repayment. But that's unlikely to happen, as any drastic action would worsen the country's finances and make it unlikely that any lenders would get all their money back, much less turn any profit.

With interest, the value of the loans could be as much as $1.5 billion.

After the midnight deadline passed, Argentine Economy Minister Axel Kicillof reiterated his government's position that it could not accept a deal with U.S. hedge fund creditors it dismisses as "vultures."

Kicillof said the funds refused a compromise offer in talks that ended several hours earlier, although he gave no details of that proposal.

"We're not going to sign an agreement that jeopardizes the future of all Argentines," Kicillof said after he emerged from the meeting with creditors and a mediator in New York City. "Argentines can remain calm because tomorrow will just be another day and the world will keep on spinning."

Consequences 'certainly not positive'

"The full consequences of default are not predictable, but they are certainly not positive," court-appointed mediator Daniel Pollack said.

The move is just the latest debt problem in the country, as bondholders who separately agreed to restructuring plans in 2005 and 2010. Argentina also defaulted on its loans as recently as 2001, when the country's failed to pay back $95 billion in loans.

In that settlement, the owners of about 92 per cent of the bonds accepted a deal that would see them paid back about 30 cents on the dollar. But Argentina still owes almost $10 billion even from that more than 10-year-old settlement.

'Who believes in the ratings agencies?'

Kicillof dismissed a decision by ratings agency Standard & Poor's to downgrade Argentina's foreign currency credit rating to "selective default" because of the missed interest payments.

"Who believes in the ratings agencies? Who thinks they are impartial referees of the financial system?" he said.

Argentine President Cristina Fernandez had long refused to negotiate with the hedge fund creditors, often calling them "vultures" for picking on the carcass of the country's record $100 billion default in 2001.

Some experts suggest the country could likely scrounge up enough cash to pay off this round of creditors, but it would set a dangerous precedent to others who are owed money, and who would likely then demand similar treatment.

"They'll probably reach some deal over the next six months," BMO economist Doug Porter said.

A man holds up a sign during a demonstration in support of Argentina's government, who has taken a hard line approach in negotiations with U.S. bondholders. (Marcos Brindicci/Reuters)

The holdouts, led by New York billionaire Paul Singer's NML Capital Ltd., spent more than a decade litigating for payment in full rather than agreeing to provide Argentina with debt relief. They also sent lawyers around the globe trying to force Argentina to pay its defaulted debts and were able to get a court in Ghana to temporarily seize an Argentine naval training ship.

The threat of seizures forced Fernandez to stop using her presidential plane and instead fly on private jets.

2001 economic collapse

Restoring Argentina's sense of pride and sovereignty after the 2001-2002 economic collapse has been a central goal of Fernandez and her predecessor and late husband, Nestor Kirchner.

Argentina has made efforts to return to global credit markets that have shunned it since the default. The government paid its debt to the International Monetary Fund and agreed in May with the Paris Club of creditor nations on a plan to begin repaying $9.7 billion in debts unpaid since 2001. It also agreed to a $5 billion settlement with Grupo Repsol after seizing the Spanish company's controlling stake in Argentina's YPF oil company.

Analysts say a new default undermines all of these efforts.

"Argentina … has consistently reaffirmed low expectations," Scotiabank said in a research note early Thursday.

"It is an unfortunate situation which is pushing the country into another default. As defaults go, we all know when we get into one but it is very unclear when and how to get out of it," said Alberto Ramos, Latin America analyst at Goldman Sachs.

"We just added another layer of risk and uncertainty to a macro economy that was already struggling," Ramos said.

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Canada's economy expands in May for 5th straight month

Factory employees work on Ford Crown Victoria cars. Virtually all industries in Canada's economy expanded in May. (Dave Chidley/Canadian Press)

Canada's economy expanded by 0.4 per cent in May, a sharp improvement from 0.1 per cent the month before.

Statistics Canada reported Thursday that Canada's GDP has expanded for five straight months. On an annualized basis, the economy is growing at a 2.3 per cent pace. The expansion was broad-based, as most industries showed growth.

The service sector expanded by 0.4 per cent, and the goods sector fared even better, expanding by half a per cent.

Three key Canadian industries — manufacturing, mining and oil and gas extraction — all increased. Construction activity also expanded.

Wholesalers and retailers saw noticeable increases, along with the transportation and real estate sectors, warehousing services and professional services.

Two exceptions were the public sector, which was flat, and the finance and insurance industry, which shrank.

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Toronto restaurant brings home the bacon — on everything

There's lots of sizzle when you work with four types of bacon.

Andrew Motta first fries up a ground bacon patty, tops it with bacon strips, and tops that off with Canadian peameal bacon. "We're not done yet," he warns, as he piles on chipotle pulled pork and, to top it all off, a bun embedded with bacon bits.

"Because this is a sandwich you just don't eat, you actually conquer, you get the bacon flag," Motta explains, puncturing The Notorious P.I.G. burger with a tiny paper flag promoting his new Toronto restaurant, Bacon Nation.  

After downing the burger, customer Marcel Tualla concludes, "It was heaven." 

Tualla was a vegetarian for 10 years, but he always missed bacon: "the saltiness, the texture, the fattiness."  So he's returned to the processed pork treat he can't resist.

A new restaurant in Toronto caters to a seemingly insatiable appetite for bacon. (Shutterstock)

In an era when processed and fatty meats are vilified by health experts, and vegetarianism has gone mainstream, somehow, bacon is back — in dishes bolder and badder than ever before. It can be found sprinkled on donuts, baked in butter tarts, and slathered with Nutella and cream cheese in a sandwich.

That last dish — the Nutella Bacon Relapse — is another menu item at Bacon Nation, where every dish includes bacon — from tacos to cheesecake.

Motta and his brother and business partner Dan started their bacon creations two years ago at Toronto's Canadian National Exhibition. They either repulsed or delighted crowds with crazy concoctions such as the bacon-wrapped deep-fried Mars bar and a Nutella BBBLT. 

Sensing a bevy of bacon lovers, the brothers decided to quit their jobs and serve it full-time.

"We're here because of the demand. We're here because people actually asked for and wanted it," said Motta. According to the market research company NPD Group, over the past five years, Canadians have been increasing their bacon orders at restaurants.

According to NPD, orders rose six per cent last year alone. The research led the group to conclude: "When bacon is included in the meal, Canadians have a higher level of satisfaction and feel more valued."

Motta said bacon has always had a cult-like following, describing it as "the meat candy of the meat world." But he said it's sizzling now thanks to food connoisseurs who discovered that it can enhance just about any dish.

"The foodies got a hold of it and started throwing it on everything," Motta said. "It just took off. I don't know if it's the saltiness, the savouriness of it, but it makes everything taste that much better."

"It's such a weird combination but it works so well," said customer Keenan Horne after digesting his Nutella Bacon Relapse. "It's almost like breakfast and dessert at the same time."

Bacon Nation is just the latest bacon-themed restaurant. It comes on the heels of Canadian Bacon Eatery which opened in Oakville, Ont., earlier this year. In 2013, Canadian Bacon Cookhouse set up shop on Halifax's waterfront.

Offerings include bacon lollipops — skewered bacon strips coated in chocolate.Bacon has such a hold on our hearts, it's even celebrated at festivals across North America. The Leslieville Farmers' Market will host Baconfest III in Toronto on Aug. 17. It's the busiest day for the market, attracting 2,500 people last year.

Registered dietitian Casey Berglund noticed bacon was wrapped around many foods at this year's Calgary Stampede.

"It does seem to be true that bacon is coming back in many different forms," she said. But she also noted that we're not supposed to be eating it. Not only is it high in salt and fat, but "there have been some studies to suggest a link between processed meat and increased risk for certain types of cancer."

Andrew Motta said the peameal bacon is cut from a leaner part of the pig and, since it's ground up in the patties, they're leaner than a traditional beef burger. And the Bacon Nation brothers openly acknowledge they're not serving dietitian meals.

Instead, the restaurant is there for people who need to cheat on their everyday diets once in a while, said Dan Motta. "Bacon's a great vehicle for that."

Berglund even admitted she has bacon on occasion, and knowing some cannot resist, she advises bacon lovers to eat it sparingly and savour every bite: "If you have to have it, share it with friends and really enjoy it."

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Target thinks outside the big box to find new CEO

Brian Cornell was named Target's new president and CEO Thursday. (April L. Brown/Associated Press)

Target is bringing in an outsider as its CEO for the first time as the retailer fights to redefine itself to American shoppers.

The Minneapolis-based company said Thursday that it named PepsiCo executive Brian Cornell to the top spot, replacing John Mulligan, who had been acting as interim chief executive since May.

Mulligan had stepped into the temporary post after former CEO Gregg Steinhafel resigned following a large data breach in the runup to the holiday shopping season.

Steinhafel had been dealing with problems on a number of other fronts too, including perceptions that Target is pricier than its rivals and concerns the company lost its touch for trendier offerings.

Worked at Pepsi, Wal-Mart

Cornell, 55, most recently served as CEO of PepsiCo Americas Foods. Prior to that, he was CEO and president of Sam's Club of Wal-Mart International and CEO of Michaels Stores Inc.

PepsiCo Inc., which is based in Purchase, New York, said in a statement it expects to announce Cornell's successor soon.

Besides it's internal problems, Target faces an uneven economic recovery that has pressured the entire retail industry. In particular, the lower-income customers that discounters go after are still dealing with slow wage and job growth. That has hurt Target as rival Wal-Mart Stores Inc. has pushed lower prices even more aggressively to go after penny-pinching customers.

For its latest fiscal year, Target reported its first annual profit decline in five years.

On Thursday, Target said Cornell's top priorities will be to ramp up its performance and help it evolve into a retailer that seamlessly incorporates online and brick-and-mortar experiences for its shoppers.

Target is looking to start anew after announcing in December a data breach in which hackers stole millions of customers' credit- and debit-card records. The theft badly damaged the chain's reputation and profits and spawned dozens of legal actions that could prove costly. Target's response since the theft has included free credit monitoring for affected customers and an overhaul of security systems.

The company's expansion into Canada, its first foray outside the U.S., has also been a disappointment. Analysts have said that Target botched its Canadian expansion by moving too aggressively. The company opened about 120 stores in the latest year and lost nearly $1 billion in the Canadian business.

In May, it fired the president of its Canadian operations, Tony Fisher, and replaced him with Mark Schindele, a company veteran.

Turnaround plan

Target must also work to restore faith among its investors. In June at its annual shareholders meeting, the final shareholder vote tally showed a rise in dissent against key board members. All 10 nominees were elected to the board but the rise in votes against several directors shows how uneasy investors remain following the data breach.

Cornell is set to become Target's CEO on Aug. 12.

In an interview posted on Target's corporate blog, Cornell said he has a "deep respect for the challenging retail environment" and noted his ties to Minnesota as a board member for Polaris Industries, a company based in Medina.

"I'm already shopping for a new warm coat for next winter," Cornell is quoted as saying.

Target shares finished at $61.38 per share on Wednesday. They have fallen 3 per cent since the start of the 2014.

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Barrick Gold has $269M loss on weak gold, copper prices

Barrick Gold reported a $269 million loss, but says it has been successful in cutting production costs. (Adam Tanner/Reuters)

Barrick Gold Corp. had a $269-million net loss on lower earnings in the second quarter, in part because of a $514 million impairment charge on the sale of its stake in the Jabal Sayid mine in Saudi Arabia.

It missed analysts projections both on profits and adjusted earnings, which came in at $159 million or 14 cents a share, down from 66 cents a year earlier.

Net loss per share was 23 cents per share, far less than the net loss of $8.56 billion or $8.55 cents a year before. Analysts had been looking for a net profit of 19 cents per share.

Barrick said it faced lower gold and copper prices and lower sales volumes compared with the second quarter of 2013.

Mining companies have been under pressure to cut costs and sell assets as commodity prices remain low. Barrick was successful in bringing its costs down, according to outgoing CEO Jamie Sokalsky.

"Second quarter all-in sustaining costs of $865 per ounce in a lower production quarter clearly demonstrate our ongoing and relentless focus on companywide cost management,"  Sokalsky said in statement. "The commitment by our mine managers to cost reduction and capital efficiency has allowed us to lower our midyear operating and capital cost guidance for the second year in a row."

The company now projects costs of $900 to $940 an ounce for gold for 2014, compared to world gold prices of $1,286 an ounce..

The Toronto-based mining company's revenue for the three months ended June 30 was $2.43 billion, which was down from $3.2 billion a year earlier but in line with estimates.

The company is in the midst of a management shakeup with Sokalsky leaving after chair John Thornton eliminated the CEO position and appointing two presidents. 

Barrick's board appointed two new independent directors — J. Michael Evans, former vice chairman of Goldman Sachs and Brian Greenspun, former chairman of Greenspun Media Group. Major stakeholders had called for more independent expertise on the board with the resignation of Peter Munk.

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Argentina, on verge of debt default, meeting with U.S. bondholders

Argentina was in a race against time on Wednesday to cut a deal by the end of the day with holdout investors suing it or win a reprieve from a U.S. court, as a surge in the country's bond prices fed optimism that an agreement was possible.

Attorneys for holdout hedge funds awarded $1.33 billion US plus interest by a U.S. court arrived for talks at the New York offices of court-appointed mediator Daniel Pollack on Wednesday morning, with hours to go Argentina faces its second default in 12 years. Pollack arrived shortly thereafter.

Argentine Economy Minister Axel Kicillof arrived shortly after 11 a.m. ET for the talks.

The holdout funds are demanding demand full repayment on bonds they bought at a discounted rate after the country last defaulted in 2002.

The price of the South American country's bonds surged 15 per cent on Wednesday to levels not seen in three-and-a-half years, a sign to some investors that a deal was attainable before another damaging default.

"It's trading like there's a deal," said a fund manager who holds Argentina's restructured debt and requested anonymity. "I don't have information, but someone knows there's a deal."

Latin America's No. 3 economy has for years fought NML Capital, a unit of Elliott Management Corp, and Aurelius Capital Management, the leading U.S. hedge funds that rejected large writedowns. After exhausting legal avenues, it faces default if it cannot reach a last-minute deal.

The Buenos Aires government has pushed hard for a stay of the U.S. court ruling that triggered Wednesday's deadline.

The government has until midnight Wednesday to break the deadlock. If it fails, U.S. District Judge Thomas Griesa in New York will prevent Argentina from making a July 30 deadline — representing the end of a 30-day grace period — for a coupon payment on exchanged bonds.

After defaulting in 2002, Argentina restructured its debt in two rounds, in 2005 and 2010. More than 90 per cent of the bondholders agreed to accept new bonds with reduced payments.

A consortium of Argentine banks is set to offer to buy out the holdout investors' debt, in an 11th-hour deal aimed at averting a default, a senior banking executive familiar with the offer told Reuters on Wednesday.

The executive said there had not yet been any discussions with the U.S. hedge funds leading the litigation and that the offer would require them to take a haircut, or reduced payment for the bonds.

"The idea is to sit down with the funds and buy all their debt. We have to negotiate the final amount, the terms and how payment will be made," the executive told Reuters.

Key dollar bond jumps

Argentina's key dollar bond due 2033 jumped on Wednesday, and its debt insurance costs fell as investors took some cheer from Tuesday's meeting.

The 2033 dollar discount bond surged as much as 12 points from Tuesday's close to a bid price of 95.26, according to Thomson Reuters data. That dropped its yield to 8.86 per cent, a level not seen since November 2010.

The cost of the country's five-year credit default swaps, or insurance on the bonds, fell nearly 400 basis points from Tuesday's close to 1,505 basis points, according to Markit. The CDS had hit six-week highs on Tuesday.

Argentina's one-year credit default swaps dropped 51 basis points from Tuesday's close to 4,708 basis points.

Kicillof's unexpected appearance in New York raised hopes that there was still time to avert a default that would bring more pain to an economy already in recession, though not the economic collapse seen in 2002 when Argentina defaulted on $100 billion in debt.

Street violence after previous default

The country received a modicum of support on Tuesday when holders of its euro-denominated exchange bonds said a suspension would encourage a settlement.

They also said they would facilitate a deal by waiving the so-called RUFO clause that prevents Argentina from offering other investors better terms than it offered them.

Argentina has consistently argued the RUFO clause prohibits it from settling with the holdouts. However, the holdouts in a Wednesday court filing urged U.S. Judge Griesa to reject the exchange bondholders request that the stay be reinstated.

While unnerving, the debt crisis is a far cry from the turmoil of Argentina's record default in 2002 when dozens were killed in street protests and the authorities froze savers' accounts to halt a run on the banks.

An Argentine default was unlikely to prompt broader market repercussions, given the country's relative isolation from the international financial system.

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McDonald's ruling steps up pressure over labour rights

McDonald's is coming under intensifying pressure for labour practices at its U.S. restaurants.

The National Labor Relations Board said Tuesday that the world's biggest hamburger chain could be named as a joint employer in several complaints regarding worker rights at franchise-owned restaurants. The decision is pivotal because it could expose McDonald's Corp. to liability for management practices in those locations.

It comes as protests for higher pay have captured national attention, with labour groups calling for pay of $15 an hour and the right to unionize. Organizers had been pushing to get McDonald's named as a joint employer at franchised restaurants, a move intended to give them a centralized and powerful target.

In the U.S., the vast majority of McDonald's more than 14,000 restaurants are owned and operated by franchisees. The same is true for many other fast-food chains, including Burger King and Yum Brands, which owns Taco Bell, KFC and Pizza hut. As such, the companies have sought to distance themselves from the pay protests by saying they don't determine wages at its franchised locations.

McDonald's to fight decision

Heather Smedstad, senior vice-president of human resources for McDonald's USA, said in a phone interview that the company has never been determined to be a joint employer in the past and that it would fight the decision by the labour board.

"This is such a radical departure that it should be a concern to business men and women across the country," she said.

Still, labour organizers say McDonald's should be held accountable because it has so much control in setting the terms for how its restaurants are run, including what menus, supplies, uniforms and training materials are used.

"There's really no doubt who's in charge," said Micah Wissinger, an attorney who brought a case on behalf of McDonald's workers in New York City.

In March, lawsuits on behalf of McDonald's workers in three states also detailed use of company software that monitors the ratio of labour costs as a percentage of sales at its restaurants. When that ratio climbs above a target, workers were forced to wait around before they could clock in, according to one of the suits.

McDonald's, based in Oak Brook, Illinois, has said it would investigate the claims.

Chain monitors franchisees

In a call arranged by labour organizers, longtime McDonald's worker Richard Eiker also recounted how McDonald's regularly sends representatives to check up on how franchisees are running restaurants, including by standing outside the drive-thru to time how quickly cars go through.

"Managers go crazy when corporate comes in for these inspections," he said, adding that restaurants are constantly told to keep costs down.

The National Labor Relations Board said 181 cases involving McDonald's have been filed since 2012. For the 43 cases that were found to have merit, the board said McDonald's or its franchisees will be named as respondents if the parties fail to reach a settlement.

The other cases were found to have no merit or are still pending.

The International Franchise Association, which represents franchisees, has opposed the identification of McDonald's as a joint employer. The group also recently filed a lawsuit in Seattle challenging whether fast-food franchisees should be treated like large employers, thus subjecting them to a new $15 minimum wage at an earlier date than smaller businesses.

"If franchisors are joint employers with their franchisees, these thousands of small business owners would lose control of the operations and equity they worked so hard to build," the International Franchise Association said in a statement

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Twitter stock soars as number of active users surpasses 270 million

Twitter shares gained sharply after the company's quarterly results were released this week. (Richard Drew/Associated Press)

Shares in social media company Twitter spiked Wednesday, a day after as the company revealed it more than doubled its revenue in the last quarter and now claims 271 million people actively use its service every month.

Twitter posted quarterly results late Tuesday that showed the company took in $312 million in revenue in the three months up to the end of June. That's an increase of 124 per cent over the same period a year ago.

The company's shares soared on Wednesday, gaining 20 per cent to trade at $46.47 on the Nasdaq. Twitter went public last November at a price of $26 per share. The stock peaked in December at $74.73 but has declined ever since.

The company also now has 271 million active monthly users, a 24 per cent increase from a year ago, but still much smaller than Facebook, which has 1.32 billion users.

On a per-share basis, Twitter's adjusted earnings were two cents. That's better than the one-cent loss analysts who cover the stock had been expecting.

The revenue and user increases were both better than analysts had been expecting. 

The company also managed to show strong improvement in monetizing that growing user base in the quarter. The company makes most of its money from ads, and on that front, Twitter took in $277 million in ad revenue in the quarter. That's more than double last year's level.

At least one analyst says there's no reason that trend can't continue.

"Twitter continues to see steady improvement in monetization and expects those trends to continue," Nomura's Anthony DiClemente said in a research note after the numbers came out. "[There's] no structural reason that levels of monetization can't reach or exceed industry peers [like] Facebook over time."

Despite the growth, the company is still losing money, with a quarterly loss of $145 million. That compares with a smaller loss of $42 million last year.

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Thalmic Labs begins shipping motion-control armbands

Thalmic Labs, a startup based in Kitchener, Ont., is shipping pre-orders of its highly anticipated Myo armband, the latest innovation in the burgeoning field of wearable tech.

The device allows users to control and manipulate computers, video games, smartphones, robotic devices, drones and other technology with arm gestures and movements. The company says Myo uses a new type of biosensor, which can pick up electrical impulses in a person's arm muscles.

Aaron Grant, one of the co-founders of Thalmic Labs, says over 40,000 pre-orders for the armbands have been placed. Each armband costs $149. 

Aaron Grant, one of the co-founders of Thalmic Labs, says a number of developers have already had a chance to experiment with the Myo armband. (Craig Norris/CBC)

Grant says developers who placed pre-orders will get their armbands first, followed by a release for the general public in September. A number of developers have already had a chance to experiment with the Myo in order to find new ways to make use of it, he said.

'One of the things that has hung over the head of the industry is the Minority Report-type interface, from the Tom Cruise movie.'- Darrell Etherington, staff writer at TechCrunch

"It's been kind of overwhelming the number of different ideas we've heard and the things people have already built," Grant told CBC News.

"We've seen applications in medical settings, surgeons using it to navigate through diagnostic imagery when they're in the operating room, we've seen lots of things in gaming."

Darrell Etherington, a staff writer with TechCrunch, has tried the device. He says the buzz around the Myo leading up to its launch has been positive among technology journalists.

"One of the things that has hung over the head of the industry is the Minority Report-type interface, from the Tom Cruise movie," said Etherington. "People really want to be able to make that a reality, where you can interact with your computing devices in a really immersive way." 

The company says it has received more than 40,000 pre-orders for the Myo armband, which sell for $149. (Matthew Kang/CBC)

But Etherington says the main challenge for Thalmic Labs as a new company is to use the hype to create a regular and profitable business stream.

"Samsung can release a product like their smartwatches, which haven't been selling well, and they don't care because they have plenty of room to burn," said Etherington.

"But with something like the Myo, it really has to do well in its first iteration if we want to see it stick around.

Etherington adds there is an extra layer of risk for Thalmic Labs, since the majority of its operations from design to logistics are done in-house and not outsourced.   

"It must be a massively expensive undertaking to do what they've done," he said.

An earlier prototype version of the Myo armband, created by Thalmic Labs. (Craig Norris/CBC)

​

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Penn West to restate results after accounting irregularities

Penn West will be restating its earnings for the past four years. (Matthew Brown/ Associated Press)

Calgary-based energy company Penn West says it will be conducting a thorough review of its books and restating past results.

"While this review is not yet completed," the company said in a statement late Tuesday, "the Board of Directors of Penn West has concluded that certain of the Company's historical financial statements and related management's discussion and analysis must be restated, which may result in the release of second quarter 2014 financial results being delayed."

Regulators in the U.S. and Canada have already been notified of the move. But it came as a shock to investors, who pushed shares in the $5 billion company down more than 10 per cent in premarket trading Wednesday, down to $8.20.

The review stretches back over the last  four fiscal years but does not impact the company's anticipated growth going forward.

The company has hired independent auditors to look at its books and so far they have uncovered:

• $70 million worth of operating expenses that were reclassified as capital expenditures on things like property, plant and equipment in fiscal 2013;
• $110 million of similar expenses incorrectly classified in fiscal 2012;
• $100 million in operating expenses that were incorrectly reclassified as royalty expense in each of the past two years.

The company says the review is still preliminary, so those numbers and findings could change, adding that "The senior finance and accounting personnel believed responsible for the adoption and use of these practices have ceased to be employed by the company." 

Penn West warned in the note it expects its next set of earnings to be delayed because of the review.

Penn West's CEO only took over the top job in June 2013, and is leading a move by the company to sell off as much as $2 billion in assets.

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BlackBerry boosts security assets with Germany's SecuSmart

BlackBerry has bought German anti-eavesdropping firm SecuSmart in a move to bulk up its security assets.

The company did not disclose the financial details of the agreement, which was announced at a security-themed event held in New York.

Chief executive John Chen says buying the company will address growing concerns about threats to individual privacy and national security.

"We are always improving our security solutions to keep up with the growing complexity of enterprise mobility, with devices being used for more critical tasks and to store more critical information, and security attacks becoming more sophisticated," Chen said Tuesday in a news release.

SecuSmart provides high-level voice and data encryption for governments, businesses and telecommunications service providers.

The acquisition still faces some conditions, including regulatory approval, said BlackBerry.

BlackBerry has previously worked with SecuSmart to develop special technology for phones that were distributed to several German government agencies, as well as German government ministries and leaders, including German Chancellor Angela Merkel.

"We see significant opportunities to introduce Secusmart's solutions to more of BlackBerry's government and enterprise customers around the world," said Secusmart managing director Hans-Christoph Quelle.

The acquisition is the latest move from Chen, who was hired last year to reshape BlackBerry, cut costs and lead an effort to find a better footing in the highly competitive tech sector.

Since joining the company in November, Chen has hired several executives from software maker Sybase, a struggling company he helped reshape into a profitable operation focused on mobile business technology.

Shares of BlackBerry rose 10 cents to $10.85 shortly after open on the Toronto Stock Exchange.

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WestJet profit hits $52 million in second quarter

WestJet will soon add wide-body planes to its fleet so it can compete with Air Canada on more routes. (Carolyn Ryan/CBC)

WestJet says it recorded higher net earnings of $51.8 million in the second quarter, or 40 cents per share diluted, the airline's 37th consecutive profitable quarter.

That's up from with net earnings of $44.7 million, or 34 cents per share, in the second quarter of last year.

The Calgary-based airline's revenue in the period was $930.3 million, a gain of 10.3 per cent over the same period a year ago.

Analysts had estimated $912.7 million in revenues on 27 cents adjusted earnings per share, according to estimates compiled by Thomson Reuters.

WestJet said it was in the advanced stages of sourcing aircraft for its entry into wide-body service for possible international expansion. It recently selected four Boeing 767-300ERW series aircraft to operate on routes between Alberta and Hawaii during the winter beginning in late 2015.

The bigger planes will offer greater range than WestJet's current fleet of Boeing 737s and allow it to compete with Air Canada on more routes.

WestJet  has said it plans to operate four wide-body planes initially for the 2015 winter season.

The airline says it expects to expand its operation into overseas markets starting in the summer of 2016.

"We continue to execute on our growth plans, including new service to Dublin, Ireland, success with our fare bundles initiative, and the expansion of WestJet Encore," WestJet president and CEO Gregg Saretsky said in a statement on Tuesday.

WestJet began flying between St. John's, N.L., and Dublin last month.

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Stoney Nakoda First Nation signs 'huge' oil deal with Chinese firm

Alberta's Stoney Nakoda First Nation says it has signed a "huge" deal with a Chinese petrochemical company to develop oil and gas on its land.

The First Nation is located 60 kilometres west of Calgary and has signed a joint venture agreement with Hong Kong-based Huatong Petrochemical Holdings Ltd. to explore and develop oil and gas deposits on Stoney Nation lands. 

About 49,000 hectares of land will be explored and developed through the agreement, with Huatong providing all necessary funding — possibly hundreds of millions of dollars — and Nakoda Oil & Gas Inc. acting as the primary operator for the joint venture.

"The magnitude of this new agreement between Huatong and the Stoney Nations will hopefully bring us one step closer to self-sufficiency for our nation and people," said Bruce Labelle, chief of the Chiniki Nation, which is one of the Stoney Nakoda nations.

Large quantities of natural gas have been produced from the Jumping Pound gas field on the Stoney Nakoda Nation since the 1950s.

The Stoney Nakoda Nation includes the Bearspaw, Chiniki and Wesley tribes and is a signatory to Treaty 7.

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Chinese cyberattack hits Canada's National Research Council

A "highly sophisticated Chinese state-sponsored actor" recently managed to hack into the computer systems at Canada's National Research Council, confirms the country's chief information officer, Corinne Charette.

The attack was discovered by Communications Security Establishment Canada.

In a statement released Tuesday, Charette confirms that while the NRC's computers operate outside those of the government of Canada as a whole, the council's IT system has been "isolated" to ensure no other departments are compromised.

Foreign Affairs Minister John Baird is in Beijing, and was scheduled to hold a press conference on his visit Tuesday, but that briefing was abruptly cancelled. No reason was immediately given.

For its part, the NRC says in a statement released Tuesday morning that it is now attempting to rebuild its computer infrastructure and this could take as much a year.

The National Research Council says it is attempting to rebuild its computer infrastructure, which could take up to a year. Canada's information officer said Tuesday that a 'highly sophisticated Chinese state-sponsored actor' recently hacked into the computer systems at the NRC. (CBC)

The NRC works with private businesses to advance and develop technological innovations through science and research.

The NRC says it has already been in contact with many of its "clients and stakeholders," but it could take as long as a year to secure the system.

This is not the first time the Canadian government has fallen victim to a cyberattack that originated in China.

In January 2011, the federal government was forced to take the Finance Department and Treasury Board — the federal government's two main economic nerve centres — off the internet after foreign hackers gained access to highly classified federal information.

The attack also targeted Defence Research and Development Canada, a civilian agency of the Department of National Defence that assists in the scientific and technological needs of the Canadian Forces.

The attacks were traced back to China.

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Alissa Chavez's Hot Seat alarm aims to prevent child hot car deaths

A 17-year-old girl from New Mexico has invented a device that alerts parents —and passersby —  if a child is left in their car.

The invention by Alissa Chavez of Albuquerque aims to reduce the chance that a child will die in an overheated car.

The teen has been working with engineers to perfect the design of the device, called Hot Seat, and is now raising money on the crowdfunding site Indiegogo to develop a prototype so it can be manufactured.

The device consists of a pad that senses if a child is in the car seat and communicates wirelessly with a fob attached to a parent's key chain.

If the parent walks more than 10 metres away without the child, it will trigger alarms on:

• The fob.
• The parent's smartphone, via an app.
• The car itself.

"If the parent doesn't have the key fob or the cellphone, the people around the vehicle will still be able to hear the alarm," Chavez told CBC's As It Happens.

Chavez hopes to raise $10,000 US on Indiegogo to build a prototype that manufacturers can use to mass produce the device, perhaps as soon as the end of this summer. As of Tuesday morning, she had raised $9,000, with less than three days left to go in the campaign.

Chavez said her mother runs a home daycare, so she was really affected by stories about children dying in hot cars after being forgotten by accident.

"I couldn't imagine losing any of the kids we work with."

A few years ago, that inspired her to create the earliest version of Hot Seat for her Grade 8 science fair project. She won the regional competition and went on to the state and national competitions.

Chavez said she has received a lot of positive feedback about the device from people who feel the invention needs to be out there.

"So many people have accidentally left their children in their car, and it didn't turn out to be a tragedy," she said, "but it still did scare them, that that can happen to anybody."

The Canada Safety Council estimates between four and six children die from being left unattended in vehicles every year.

According to the advocacy group Kidsandcars.org, in the U.S., 44 children died of heat stroke after being left in cars in 2013. 

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Nigel Wright, Harper's ex-chief of staff, returns to Onex

New

Wright left PMO in 2013 after cutting personal cheque for Senator Mike Duffy to repay improper expenses

CBC News Posted: Jul 28, 2014 10:44 AM ET Last Updated: Jul 28, 2014 11:26 AM ET

Nigel Wright, Prime Minister Stephen Harper's former chief of staff, has returned to Onex, the private equity group he worked at for more than a decade before making the leap to the political arena in 2010.

Wright is rejoining Onex as a managing director in the buyout firm's offices in London, England, the company said in a press release Monday.

"I am very pleased to be back at Onex and am looking forward to helping build our business," Wright said in the release.

Wright left the Prime Minister's Office in May 2013 after cutting a personal cheque to pay back improper expenses for Senator Mike Duffy.

Onex chair and founder Gerry Schwartz said: "We missed Nigel during his leave of absence and are excited to have him back.

"Nigel is an experienced investor and a great asset to our team," the release said.

Onex only opened its London office two years ago, part of a resurgence in takeover deals in Europe following a crippling banking and credit crisis.

Comments on this story are moderated according to our Submission Guidelines. Comments are welcome while open. We reserve the right to close comments at any time.

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Jul 28, 2014 11:15 AM ET Jul 28, 2014 11:15 AM ET Jul 28, 2014 11:15 AM ET Jul 28, 2014 11:20 AM ET Jul 28, 2014 11:15 AM ET

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Court orders Russia to pay $50 billion to Yukos shareholders

Former oil tycoon Mikhail Khodorkovsky was freed after spending years in jail because of his connection to Yukos, the oil company the Russian government seized and sold off. (Steffi Loos/Reuters)

An international court on Monday ordered Russia to pay more than $50 billion to the former majority shareholders of now defunct oil company Yukos, ruling that the state engaged in a ruthless campaign to destroy what was once the country's biggest oil producer.

In one of the biggest such cases ever, the Permanent Court for Arbitration in the Hague, Netherlands, determined Russia was not acting in good faith to collect taxes when it levelled massive claims against Yukos in 2003, even though some of the company's tax arrangements might have been questionable. The tax case led to the imprisonment of Yukos CEO Mikhail Khodorkovsky and has been widely seen as retaliation for his support of opposition political parties.

The state took advantage of the tax claims "by launching a full assault on Yukos and its beneficial owners in order to bankrupt Yukos and appropriate its assets while, at the same time, removing Mr. Khodorkovsky from the political arena," the court said.

International tensions

The ruling adds to tensions between Russia and the international community at a time when relations are at their lowest ebb since the end of the Cold War. Following the downing of Malaysia Airlines Flight 17 over eastern Ukraine, the U.S. and European Union are debating further economic sanctions against Moscow because of its support for rebels suspected of launching the attack.

The amount of damages, although half as much as originally claimed, is still colossal, even for a nation with the vast oil and mineral wealth like Russia. It is nearly as much as Russia spent on the 2014 Winter Games in Sochi, the most expensive Olympics in history.

The Yukos takeover was the beginning of a process under which Russia, under President Vladimir Putin, re-took control of the country's energy industry. Yukos' main assets were sold at auction to a shell company. Just days later that company was bought up by state-owned Rosneft, making it the largest oil producer in Russia.

In the ruling, which was dated July 18 and announced Monday, the court described the seizure of the assets as "devious and calculated."

Russia was ordered to pay the judgment within 180 days or begin paying interest. If Russia declines to pay, shareholders can attempt to seize Russian assets abroad — such as commercial properties, travelling art collections or airplanes.

"It's the end of the beginning," said Tim Osborne, the executive director of GML, formerly Group Menetap Ltd. whose subsidiaries brought the suit. "We're over the first and most important hurdle. It's now a question of enforcing it."

Russian Foreign Minister Sergey Lavrov, commenting on unconfirmed reports about the ruling earlier on Monday, said that Russia would keep fighting.

"Authorities who are representing Russia in this trial will use all possible legal means to defend their position," Lavrov said.

Rosneft: no impact

Rosneft said in a statement on Monday that it is not party to the litigation and that it did not expect to be affected by it.

"Rosneft believes that all the deals to purchase former assets of Yukos as well as all its actions regarding Yukos were fully legitimate and were done in line to the legislation at the time," the company said.

Shares in Rosneft, which is worth $65.7 billion, were down 3.6 per cent Monday trading in London and 2.7 per cent in Moscow.

GML sought relief from under the Energy Charter Treaty, which creates the legal basis for an open international energy market. The holding company claimed that Russia violated the treaty, which requires swift and fair compensation if assets are expropriated.

Khodorkovsky, who spent ten years in prison before he was pardoned by Putin in December last year, said Monday that the decision was "fantastic" for shareholders, though he underscored he was not a party to the case and would get nothing personally.

"It is sad that the recompense will have to come from the State's coffers, not from the pockets of Mafiosi linked to the powers that be and those of Putin's oligarchs," he said in a statement.

The Yukos matter has raised questions about whether investors can expect any safeguards in Russia. Analysts suggest that many will be watching how the Russians react.

"The Yukos affair is likely to come back to haunt the Russians," said Anders Aslund, a senior fellow at the Peterson Institute in Washington and a long-timer Russia watcher. "You don't steal companies."

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'We're not the Jetsons yet': Volvo's 'world first' safety features next step in a smarter car

A drowsy driver is about to drift off the road when suddenly the seat belt tightens, or extra torque is applied to the steering wheel and the vehicle pulls itself back on track.

Or maybe a driver is turning in front of an unseen oncoming car when on-board radar and a tiny camera prompt the brakes to kick in automatically, avoiding a collision.

As futuristic as such scenarios seem, Swedish auto giant Volvo is turning these possibilities into reality when it reveals its new XC90 luxury SUV next month, complete with two safety features it's touting as "world-firsts": auto braking when turning in front of an oncoming vehicle and run-off-road protection.

Volvo's new XC90 will have run off road protection, a feature that includes seatbelt tightening if an accidental road departure is detected. (Volvo Cars of Canada)

"It all has to do with our vision," says Volvo Canada CEO Marc Engelen, alluding to the automaker's goal that no one will be killed or seriously injured in a new Volvo car by 2020.

"This is the first step. In every new car which we launch after XC90, you will see some more safety … features, which will go to that vision."

The new features on the XC90, which will be available at Canadian Volvo dealerships next April, are high-tech developments in an automotive safety landscape that has evolved considerably from the 1950s and '60s when vehicles didn't even have seat belts.

But as much as such developments hold the potential for boosting safety, observers caution that they aren't the last word when it comes to reducing serious and fatal collisions.

No help if you're drinking and driving

"We're still not in the world of the autonomous vehicle where all cars are driving themselves," says Kristine D'Arbelles, manager of public affairs for the Canadian Automobile Association. "Drivers still have to be good drivers.

"You can have a tonne of technology on your vehicle that is meant to try to keep you safe, but if you're texting and driving, or if you're drinking and driving, some of those safety features aren't going to help you."

Driver Alert Control, which is standard in the new Volvo XC90, detects and warns tired or inattentive drivers and now has a rest stop guidance feature that directs a tired driver to the nearest rest area. (Volvo Cars of Canada)

In other words, "We're not the Jetsons yet," she says, and the driver remains "the most important safety feature" on any vehicle.

Still, the idea of a car knowing when a drowsy driver is about to hit the soft shoulder, or if a turn can't be made safely, has considerable allure.

"Any sort of advancement in technology that can potentially save a driver in a collision, or reduce collision fatalities or injuries, is obviously a good thing," says D'Arbelles. "We'd never be against something like that."

Engelen has driven in a vehicle equipped with run-off-road protection and says it's "pretty amazing."

"It will detect that actually you are going off the concrete or going off the normal road … and then the car will automatically turn back to the road."

Master in your own car

But the company long known for its focus on safety is not engineering a world where drivers don't exist, even for the autonomous vehicles it is testing in Sweden.

'You are the master in your car.'- Marc Engelen

"That is very important for Volvo," Engelen says.

In the auto-braking feature, for example, if it engages but drivers want to get out of it, they could push the pedal.

"You are the master in your car," Engelen says.

Automotive safety engineering also holds the potential for features that could tell drivers they're not fit to get behind the wheel at that moment.

"Maybe one day in the future there will be a vehicle where you touch the steering wheel and the steering wheel will be able to sense … your heart rate, the temperature of your skin, [and] it'll say: 'Look, maybe you're not in the best condition to drive right now,' " says William Altenhof, a professor of mechanical, automotive and materials engineering at the University of Windsor.

"I think that will happen one day. I don't know if it will be in my time."

Fewer fatal crashes

Fatal collisions have been on a relatively steady decline in Canada and other developed countries for a few decades. Numbers from Transport Canada show a downward trend in motor vehicle crash fatalities from 3,501 in 1992 to 2,006 in 2011.

There's no one reason behind that decline, says Transport Canada. While improved vehicle safety features are part of it, the department says other contributing factors include:

• Better road infrastructure, engineering and investment;
• regulations related to speed, occupant restraints, impaired driving and distracted driving, as well as targeted enforcement of these regulations;
• improved trauma treatment;
• changing public attitudes about the importance of road safety.

Societal trends are also important, says Peter Frise, scientific director and CEO of AUTO21, an auto-related research network based out of the University of Windsor.

"The state of the economy affects how many kilometres per year people are driving. The price of fuel is somewhat correlated with how much people are driving" he says.

"If people are driving less, it follows that they'll have fewer road crashes."

Frise thinks Volvo's new features are great, and are "certainly in accord with what's going on throughout the automotive world," where much emphasis is being placed on collision avoidance, in addition to protection of occupants in vehicles.

But none of that matters if drivers ignore features in their cars or trucks.

"You can have the best headlights in the world, but if you're not paying attention out the windshield, then … those headlights don't do anything for you," says Frise.

No instant impact

But even if all drivers were taking advantage of every safety feature offered in their vehicles, and paying close attention to their surroundings, there's still a sense it will be some time before technological advances can make a full impact on road safety.

"It's not enough to say we'll all be safer once Volvo puts this stuff in their cars," says Frise. "We'll all be safer when everybody has it."

A front-facing camera and radar in Volvo's new XC90 are located in the upper part of the windscreen and integrated behind the rear-view mirror. (Volvo Cars of Canada)

And that could take a while.

"The average age of a car in North America is 11 years, so it's going to take a long time" before some of these aids are everywhere, says Frise.

"Just because one model of one car has got a certain technology, that doesn't mean all the other ones do as well. In fact, they don't, and some of these new technologies really only function well if everybody's using them at once."

Still, there is no good reason not to try to enhance auto safety, he says.

And from Volvo's perspective, the ultimate goal, beyond 2020, is "no more crashes," says Engelen.

He knows that's a longer-term prospect, and one that combines a host of better driver training and regulation. "We can't do it alone."

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Scotiabank & 2 other banks accused of rigging silver price

An investor is suing some major banks for fixing the price of silver to their advantage. (Nicky Loh/Bloomberg)

The Bank of Nova Scotia, along with Deutsche Bank and HSBC, has been accused of fixing the price of trillions of dollars worth of silver.

In a court case filed in New York's southern district Monday, J. Scott Nicholson filed suit against the three banks for allegedly rigging the price of silver and in the process, making money at the expense of smaller investors.

Unlike stocks which are priced based on supply and demand in individual stock markets, for more than a century the price of silver has been set by major international financial institutions, including the defendants, who set the quoted price on a conference call every day.

"The nature of the [system] creates an environment that is highly susceptible to manipulation and collusion," the lawsuit alleges. "The call itself is completely secret. There are no outside observers, and no recordings … have ever been released. There is no regulatory body that oversees the auction process or verifies the data submitted by defendants."

The price that's set is the benchmark price against which traders all over the world can swap the metal based on local demand, in a global market worth some $5 trillion. The system was set up that way in 1897 so that traders could have an agreed-upon international price to set their own local prices.

But much like similar allegations in the gold market and in a key London-based interest rate known as LIBOR, critics of the system say it gives insiders too much power and ability to manipulate prices to their advantage.

"Defendants used this extreme level of secrecy to their advantage to manipulate the price of silver and the price of silver derivatives … to benefit their proprietary trading positions," the suit alleges.

Essentially, the lawsuit alleges the defendants buy and sell long and short positions in silver, armed with advanced knowledge of what the benchmark price that day is going to be.

The silver lawsuit seeks unspecified damages, but other lawsuits have already been brought forward against banks named in the silver lawsuit and others, over similar alleged fixing in the gold market.

In January, Deutsche Bank announced it would be withdrawing from its participation in setting the benchmark price in both gold and silver. And British regulators fined a Barclays trader in May almost $50 million for attempts to fix the gold price.

In response to a request for comment from CBC News, Scotiabank said "we intend to vigorously defend ourselves against this suit."

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Australian company buys proposed N.S. LNG site

Australia-based Liquefied Natural Gas Ltd. announced Monday it is purchasing a potential natural gas export site in Nova Scotia from a subsidiary of Anadarko Petroleum Corp. for $11 million.

The company says the deal to buy the Bear Head LNG project outside Port Hawkesbury, N.S., is scheduled to close at the end of next month.

The 100-hectare site includes land zoned for industrial purposes and there are two foundations in place for LNG tanks.

Liquefied Natural Gas Ltd. says the project could lead to exports of LNG to European markets.

Anadarko Petroleum Corp. mothballed its plans for an LNG plant at the site seven years ago due in part to difficulties in accessing a supply of the fuel. Liquefied Natural Gas Ltd. says it is in talks with several potential suppliers.

The warden of the Richmond County municipality said word of revived interest in the project is good news.

"Any time there is potential development in the Strait Area it's exciting news for all of us," said Steve Sampson.

There are two other LNG export sites proposed for Nova Scotia's eastern coast.

Pieridae Energy Canada was given conditional approval earlier this year to proceed with its proposed LNG plant in Goldboro.

Earlier this month, Indian company H-Energy signed memorandums of understanding with customers for half of its planned output from a proposed LNG plant and export terminal in Guysborough County. Environmental approvals for that development have not yet been granted.

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Is Canada missing the boat on cycling tourists?

For Steve Langston, a Winnipegger with 30,000 kilometres of world-wide bike travel under his belt, the cycling trails in Quebec felt "like Amsterdam," and proved a rare exception to most others he'd traversed across this country. 

"It was so great. ...It's just well thought out, well executed," said Langston, 30, who's written guidebooks on cycling Canada and Manitoba. Quebec, he says, has "hit a scale where you can go wherever you want."

Quebec is internationally recognized for its extensive 5,000-km cycling network, La Route Verte, which criss-crosses most parts of the province, making it North America's longest bike path. 

But in the two decades since the Quebec government and non-profit Vélo Québec first began work on the route, it remains an anomaly in Canada, even as other countries and regions seek to cash in on the booming trade in cycle tourism.

Ontario is in the midst of its own push to become a cycling destination and is gleaning knowledge from the 80-employee non-profit powerhouse next door in Quebec, which not only runs the cycle route, but also organizes tours, produces maps and does research on cycling in the province. 

"We are catching up to Quebec, which is one of the leaders internationally," said Marlaine Koehler, executive director of the Waterfront Regeneration Trust, a charity that operates the 1,400-km Waterfront Trail stretching along Lake Erie, Lake Ontario and the St. Lawrence River. 

Last year, Ontario's Ministry of Transportation laid out a 20-year cycling plan that included the lofty goal of becoming recognized as the "best Canadian province for cycling and ranked among the top 10 jurisdictions worldwide." 

The move is part of a growing recognition around the world of the economic potential of cycle tourists, a group of travellers that can include those who spend days on the road and those who merely want to hop on a rental bike for the day.

'Popping up all over'

Little hard data on visits by cycle tourists exists, but the U.S.-based Adventure Cycling Association points to a number of signs that cycling is booming: Oregon's quadrupled its state bike routes, three states are seeking to create a Lake Michigan route, bike share programs are on the rise, and so are multi-day biking events and towns marketing themselves as cycling hubs.

In the U.S., there's also a resurgence of interest in a long-dormant plan, hatched in the 1970s, to create a nation-wide network of long-distance cycling routes.

"Things like that are just popping up all over," said Ginny Sullivan, Adventure Cycling's director of travel initiatives. "It's just showing that there is demand."

It's a demand that Europe is already well aware of. A 2012 study by European Parliament estimated that every year, cycle tourists take 2.2 billion trips to the continent, bringing about $64 million in economic benefits. 

In bicycle-friendly Europe, 14 cycling routes cover a phenomenal 45,000 kilometres as part of the EuroVelo project — by 2020, it is scheduled to encompass 70,000 kilometres. 

Australia also has a national cycling strategy aimed at doubling the number of people cycling between 2011 and 2016, one that will help bring in the tourists as well as please locals. 

Other countries looking at how to cash in on the cycle tourism niche include Taiwan, New Zealand, Denmark and Britain.

The financial factor

Here in Canada, though, there's no country-wide plan to create cycling routes worthy of becoming travel destinations.

Marlaine Koehler, executive director of the Waterfront Regeneration Trust, shown on her bike, says Ontario is catching up to Quebec when it comes to bicycle trails. (Goh Iromoto/ Waterfront Trail)

"I think that is slowly changing, certainly in Ontario," said Koehler. "At a national level, there really isn't the same recognition for what the potential holds."

Koehler also noted that it took the charity a long time to convince Ontario's ministry of tourism that a trail could be a tourism attraction. It eventually won the government over with polls that showed Quebecers would consider a trip to Ontario based on the promise of a scenic trail.

The Waterfront Regeneration Trail is focused on creating a cycling route around the Great Lakes, and has big expansion plans and dreams for the coming years to increase significantly its mileage.

Some of the biggest deterrents for cycle tourists are poor road conditions that force cyclists into traffic and a lack of good signage. 

Quebec was able to overcome obstacles and create its massive network largely because of the support of the provincial government, which created incentives to help municipalities build the necessary infrastructure like trails and other facilities.

Still, Vélo Québec's Jean-Francois Pronovost says the initial struggle was convincing people that a cycling network was financially worth the investment. Now, if you travel on the province's bike paths, businesses recognize the value and welcome the cyclists.

Pronovost, the group's vice-president of development and public affairs, says the creation of that kind of a network requires provincial government input, and he's hopeful Ontario will see that happen. But other than Ontario, he notes, "we don't see many initiatives from provincial governments in Canada."

Small towns win

Studies show visiting cyclists tend to spend more on food and services than a traveller passing through in a car. After hours of pedalling, they have raging appetites — and feel more inclined to pamper themselves.  

Also, smaller towns tend to gain more from a rise in cycle tourism because these travellers are more likely to venture away from big-city attractions than those in a car, research shows.

Some smaller communities are taking the initiative to paint themselves as cyclist-friendly destinations. 

A resident of Twin Bridges, a tiny town of 400 in Montana that sits at the fork of several rivers and touts itself as a fly-fishing destination, decided to welcome cyclists.

Intrigued by the stories of the Lycra-clad visitors passing through, one man convinced the town to invest $9,000 to build a basic shelter for cyclists, and then ask for visitors' donations to maintain it.

Word of the friendly overture spread on the cycling grapevine. And now local stores, the town laundromat and restaurants are benefiting from the rise in cycling visitors.

The initiative speaks to a broader truth about cycling tourism, notes Pronovost: "If you don't have the infrastructure, you won't be in the destination guides." 

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MH17 tragedy, rebounding retailers and Parks Canada's new threads: the week in business

Airplane fears dominated the news cycle this week, and the financial world was no exception. After the tragedy in Ukraine when rebels reportedly shot down a commercial airliner, the outlook got worse for aviation after a rocket strike landing within a kilometre of Tel Aviv airport, grounding most international air travel in the area.

The global airline industry was finally getting back on its feet after years of uncertainty. But as the CBC's Peter Armstrong reported this week, the unease over air travel belies the actual reality — flying is safer today than it ever has been.

Globally, the industry is poised to double its profitability this year, to $18 billion and airline stocks are starting to pay dividends again — a development that would have seemed impossible just a few short years ago. Despite the optics of two once-in-a-lifetime disasters within months of each other, the truth is airlines are doing just fine.

It's just hard to believe after the week it's been.

Retail sales rebound

Another industry very much in the news this week was retail; specifically, some encouraging signs that shoppers are finally starting to spend again.

Statistics Canada reported this week that retail sales hit an all-time record of just under $42 billion last month. A closer look at the numbers shows that a rebound in car sales just managed to skew the total number higher. But it's still evidence of a rebound some people think is long overdue.

Then again, maybe retailers are finally starting to learn from Target's mistakes. In our most-read story this week, the CBC's John-Paul Tasker took a look at how Target missed the mark in their bumbled Canadian launch, and uncovered few cautionary tales for sellers. Certainly something for other struggling retailers like Sears and Indigo to take note of.

Parks Canada clothing

One agency that looks like it's keenly aware of the need to innovate in terms of selling itself is Parks Canada, which launched a line of garments this week aimed at raising the profile (and a little extra revenue) for national parks struggling with funding cutbacks.

The agency is selling a line of hoodies, hats and t-shirts emblazoned with the agency's 1970s logo — an iconic image of a Canadian beaver.

Early reviews appear to be positive, but the CBC's Dianne Buckner sought the answer to a question everyone was asking this week: why wasn't Roots involved?

With their brand deeply soaked in Canadiana and a long history of being the official clothier of Canadian-themed events such as the Olympics, the Toronto-based chain would seem to have been a natural fit for the job. As Buckner reported, a deal was on the table that ultimately fell apart. Read her exclusive report to find out why.

Modernizing hospitals

In health care news, the major story this week was a push to make Toronto home to the first all-digital hospital in North America.

The Humber River Hospital will soon be fully Wi-Fi connected, making patient care more interconnected than it's ever been. Every detail of the hospital is aimed at making communication between patients and caregivers easier. Things like video chats, mobile alerts, even GPS tracking for patients and equipment — everything has been designed to cut down on wasted time for doctors and nurses, and instead focus on patient care.

It's more than just a digital gimmick — it's an investment that will pay off for patients down the line, the hospital's COO told the CBC this week.

"We'll be able to divert more health dollars to actual patient care, as opposed to hunting and gathering," Barb Collins told Amanda Lang this week.

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Argentina facing default on $1.5B debt

Argentina's negotiations with creditors to resolve a dispute over $1.5 billion in unpaid debts remained deadlocked following talks Friday, setting it on a course for a possible catastrophic default next week.

Argentina will default for the second time in 13 years if it cannot reach a deal with the U.S. hedge funds before July 30. Daniel Pollack, the court-appointed mediator in the dispute, met with Argentine officials and in a statement released after the talks said that progress had not been reached. Pollack also said the Argentinians were returning to Buenos Aires Friday night, but he expects more talks before the deadline.

Following a U.S. judge's order, Argentina can't pay investors who accepted lower-valued bonds after its record $100- billion default in 2001 unless it also pays off creditors who didn't participate in previous bond swaps.

President Cristina Fernandez has long refused to negotiate with the plaintiffs led by New York billionaire Paul Singer's NML Capital Ltd., who spent more than a decade litigating for payment in full rather than agreeing to provide Argentina with debt relief. But Fernandez has been backed into a corner by NML Capital's payment plan and has been sending a delegation to meet the negotiator in New York in hopes of averting a default.

"Argentina is being attacked by speculative interests in a totally undeserved way," Fernandez said in a speech Friday night.

Argentina President Cristina Fernandez has long refused to negotiate with the plaintiffs led by New York billionaire Paul Singer's NML Capital Ltd. (Victor R. Caivano/The Associated Press)

"The ones involved in this suit never loaned a single cent to the Republic of Argentina but instead bought defaulted bonds in 2008 - in other words they bought worthless bonds on the cheap," she said.

The holdout creditors accuse Fernandez's government of refusing to negotiate to provoke a default.

"Argentina's government made clear that it will be choosing to default next week. Creditors arrived at the [debt mediator's] office this afternoon prepared to negotiate and willing to be flexible in forging a solution," Stephen Spruiell, an NML spokesman, said in a statement Thursday. "Argentina again refused to negotiate any aspect of the dispute."

Paying the hedge funds that Fernandez often calls "vultures" in full would likely trigger lawsuits from other bondholders demanding to be paid on similar terms. Argentina's government estimates that the liability could run up to $15 billion.

With nearly $29 billion in foreign reserves, Argentina appears to have the money to pay its bills. But those reserves include loans to other countries, deposits with the IMF and other assets that aren't easily used. Take those away, and Argentina has roughly $16 billion on hand.

Troubled countries often find bond investors willing to lend to them to pay other creditors. But Argentina has been locked out of the bond markets for more than a decade. Some investors would probably step up to lend it money, but at high interest rates — and at high political cost for the leftist government.

Fernandez and her husband, the late president Nestor Kirchner, used much of the Central Bank's reserves to pay down Argentina's debts, provide energy subsidies and fund social programs, weakening its ability to control one of the world's highest inflation rates and manage the money supply.

"It is crunch time in Argentina where the authorities seem to be running out of grace, and literally also of the 'grace period,' to make the missed coupon payment by July 30 in order to avoid another default," said Alberto Ramos, Latin America analyst at Goldman Sachs.

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5 ways to save on wedding costs

Chances are, someone you know will get married this year. A recent unscientific survey by Weddingbells magazine says there will be 162,056 weddings across the country in 2014, each with an average price tag of $31,685.

And let's face it, much like the budget for anything else goes, when the bill comes in, the final tally could ring in much higher. Wedding planning can take a toll on any couple's sanity, but it doesn't have to deplete their savings. There are lots of ways to cut back without sacrificing the special day you want.

Don't keep with tradition

Opting for a less formal event allows the flexibility to forego pricey wedding traditions. Ditch paper and postage costs by going digital. Email invitations have become more acceptable, particularly with sites like Paperless Post and Postmark offering more polished choices. The details are delivered in a digital envelope, and the sites make it much easier to track RSVPs.

Take a slice out of costs by skipping the fancy wedding cake, which is often just an $800 photo op anyway. Most banquet halls already include dessert on the menu — and if you have a cake, they may charge you an additional fee just to cut and plate it.

At $75 or more for fresh flower centrepieces, decor is an easy place to find savings. Choose cheaper alternatives such as silk flowers or candles — or just leave the tables bare. And more often than not, wedding favours are forgotten on the table, so why spend money on something a guest rarely notices?

Say no to trends

Getting sucked into Canada's $5-billion wedding industry (trust me, that figure is for real) is easier than you might think. Stop me if you've heard this before: "I used to be a rational person, but it all went out the window as soon as I started planning my wedding." The pressure to put on the perfect party has become even greater as social media sites like Pinterest boost expectations and competition among brides-to-be. You know the industry has gotten out of hand when a hotel offers this service: a social media concierge who will live-tweet your wedding for the tidy sum of $3,000.  

From photo booths (when most guests already carry a smartphone) to late night snack bars (when you've already provided dinner), or having a drone photograph your wedding (if you want to talk about taking wedding spending to ridiculous new heights) just say no to trends.

Say yes to a cheaper dress

The search for a perfect wedding gown can be all-consuming for a bride. It's such a drama-rich process it sparked the creation of outrageously popular reality TV show, Say Yes to the Dress (a new Canadian version of the program will launch in winter 2015). Retailers routinely mark up dresses by 200 per cent or more, so wedding gowns may well be the most expensive item of clothing a woman ever buys, even though it's only worn for a few hours.

The Weddingbells survey suggested Canadian brides would spend an average of $1,716 on their dress. So what's a bride to do? Consider a cheap and chic brand, many of which are increasingly trying to grab wedding dollars by offering inexpensive alternatives. H&M recently unveiled a $99 gown, while J. Crew's wedding line starts at $295. Big savings can also be found by buying secondhand. Try wedding-oriented sites like oncewed or SmartBride Boutique, or try a broader search on Kijiji or eBay.

Think outside the box

One of the reasons wedding costs can balloon is that many couples are thinking the same way, so there's increased demand for limited options. Think differently. With 65 per cent of weddings taking place between June and September, try to book in the off-season.

The average wedding in Canada will cost more than $30,000 this year, some estimates say. (The Associated Press)

A Friday brunch reception in the winter can save you big bucks compared to a Saturday dinner reception on an August long weekend. Hire a music student instead of a professional violinist — it's unlikely guests would be able to tell the difference. And find low-cost replacements — taxis can be more fun than a stodgy limo, and cava or prosecco can cut costs compared to champagne.

It's OK to splurge … within reason

Cutting costs on what might be the most expensive party of your life is great. But weddings generally only happen once, so it's OK to include a few treats for yourself. Everyone has a different idea of what they would splurge on. Just be sure to decide what means the most to you, and keep everything else to a reasonable budget. Reasonable is a good mantra when wedding planning. Just think, $31,685 could also get you a new car, a university degree, or a down payment on a new home.

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Germany to reject Canada-EU trade deal, newspaper reports

Germany is to reject a multibillion-dollar free trade deal between the European Union and Canada which is widely seen as a template for a bigger agreement with the United States, a leading German paper reported on Saturday.

Citing diplomats in Brussels, the Sueddeutsche Zeitung reported that Berlin objects to clauses outlining the legal protection offered to firms investing in the 28-member bloc. Critics say they could allow investors to stop or reverse laws.

The German government could not sign the agreement with Canada "as it has been negotiated now," the paper reported, quoting German diplomats in Brussels.

It also said that the clauses in the Canada deal were similar to those in the U.S. agreement, which is still under negotiation.

"The free trade treaty with Canada is a test for the agreement with the United States," said one senior official at the Commission in Brussels, according to the paper.

If the deal with Canada is rejected "then the one with the United States is also dead", added the official.

Asked about the report, a spokesman for Germany's Economy Ministry referred to correspondence which outlined Germany's concerns about investor protection in talks with both countries.

"The German government does not view as necessary stipulations on investor protection, including on arbitration cases between investors and the state with states that guarantee a resilient legal system and sufficient legal protection from independent national courts," Deputy Economy Minister Stefan Kapferer wrote in response to an inquiry from a Greens legislator.

In the letter, dated June 26, Kapferer took a similar position on investor protection in the still-to-be-agreed Transatlantic Trade and Investment Partnership (TTIP) agreement with the United States.

Brussels argues that without these clauses companies from Canada will not invest in Europe.

The Sueddeutsche said that EU states will this week receive the treaty for officials to examine in detail before it is signed. All 28 members of the EU have to sign the agreement for it to take effect.

The deal with Canada could increase bilateral trade by a fifth to 26 billion euros a year and the more ambitious one with the United States, if agreed, could encompass a third of world trade and almost half the global economy.

Both accords seek to go far beyond tariff cuts and to reduce transatlantic barriers to business, but the talks are extremely complicated.

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Industry Canada approves AltaLink sale to Berkshire Hathaway Energy

The federal government has approved the pending sale of an Alberta utility provider to an American company.

Berkshire Hathaway Energy's application to buy AltaLink received approval Friday from Industry Canada. As a result, the American company has agreed to multiple commitments in order to meet the overall economic benefit standards set by the government for foreign investment transactions.

Those commitments include a promise not to reduce the level of employment at AltaLink, to keep the electricity transmission company locally managed with its headquarters in Alberta and to keep a majority of its board of directors Canadians.

For the next five years, Berkshire Hathaway Energy must reinvest 100 per cent of AltaLink's earnings back into the company or elsewhere in Alberta to support AltaLink's three-year, $2.7-billion investment in Alberta's energy infrastructure.

As well, at least $27 million must be reinvested in joint Canada- U.S. development opportunities with Canadian partners over the next five years. 

Berkshire Hathaway Energy must invest at least $3 million of new funds over three years to support academic programs focused on energy-related topics, while AltaLink's commitment to provide $3 million over three years in Alberta communities and charitable contributions must be maintained.

Berkshire Hathaway Energy has had to commit to sharing best practices at no cost with AltaLink on safety, customer satisfaction, cybersecurity and supplier diversity and must provide opportunities for Albertan and other Canadian companies to supply products and services to its businesses.

Alberta NDP oppose deal

New Democrat MLA David Eggen came out against the approval Friday afternoon.

He says the deal is not fair to Albertans and argued that the province's transmission system should not be an internationally traded commodity.

"Electricity is an essential service and it should be operated for Albertans, not for a massive profit for a foreign company," Eggen said.

He says the Alberta NDP will continue to oppose the sale.

They will be calling on the Alberta Utilities Commission to hold public hearings on the sale.

Deal worth billions for Quebec-based owner

Despite the concessions, the deal isn't official just yet.

The proposed sale is still under a review from the Alberta Utilities Commission to ensure Albertans aren't negatively affected by the deal.

"Alberta has both a solid investment climate and the regulatory environment to make sure Albertans are looked after, and we need electricity infrastructure to support the continued growth and development currently underway in our province," said Ministers Cal Dallas and Diana McQueen in a joint statement.

The sale of the company from Quebec-based SNC-Lavalin to Warren Buffet's Berkshire Hathaway Energy will cost $3.2 billion.

The deal is expected to close on Dec. 31 and is part of SNC's strategic plan to unlock and create value from its portfolio of infrastructure concession investments.

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MH17 tragedy, rebounding retailers and Parks Canada's new threads: the week in business

Airplane fears dominated the news cycle this week, and the financial world was no exception. After the tragedy in Ukraine when rebels reportedly shot down a commercial airliner, the outlook got worse for aviation after a rocket strike landing within a kilometre of Tel Aviv airport, grounding most international air travel in the area.

The global airline industry was finally getting back on its feet after years of uncertainty. But as the CBC's Peter Armstrong reported this week, the unease over air travel belies the actual reality — flying is safer today than it ever has been.

Globally, the industry is poised to double its profitability this year, to $18 billion and airline stocks are starting to pay dividends again — a development that would have seemed impossible just a few short years ago. Despite the optics of two once-in-a-lifetime disasters within months of each other, the truth is airlines are doing just fine.

It's just hard to believe after the week it's been.

Retail sales rebound

Another industry very much in the news this week was retail; specifically, some encouraging signs that shoppers are finally starting to spend again.

Statistics Canada reported this week that retail sales hit an all-time record of just under $42 billion last month. A closer look at the numbers shows that a rebound in car sales just managed to skew the total number higher. But it's still evidence of a rebound some people think is long overdue.

Then again, maybe retailers are finally starting to learn from Target's mistakes. In our most-read story this week, the CBC's John-Paul Tasker took a look at how Target missed the mark in their bumbled Canadian launch, and uncovered few cautionary tales for sellers. Certainly something for other struggling retailers like Sears and Indigo to take note of.

Parks Canada clothing

One agency that looks like it's keenly aware of the need to innovate in terms of selling itself is Parks Canada, which launched a line of garments this week aimed at raising the profile (and a little extra revenue) for national parks struggling with funding cutbacks.

The agency is selling a line of hoodies, hats and t-shirts emblazoned with the agency's 1970s logo — an iconic image of a Canadian beaver.

Early reviews appear to be positive, but the CBC's Dianne Buckner sought the answer to a question everyone was asking this week: why wasn't Roots involved?

With their brand deeply soaked in Canadiana and a long history of being the official clothier of Canadian-themed events such as the Olympics, the Toronto-based chain would seem to have been a natural fit for the job. As Buckner reported, a deal was on the table that ultimately fell apart. Read her exclusive report to find out why.

Modernizing hospitals

In health care news, the major story this week was a push to make Toronto home to the first all-digital hospital in North America.

The Humber River Hospital will soon be fully Wi-Fi connected, making patient care more interconnected than it's ever been. Every detail of the hospital is aimed at making communication between patients and caregivers easier. Things like video chats, mobile alerts, even GPS tracking for patients and equipment — everything has been designed to cut down on wasted time for doctors and nurses, and instead focus on patient care.

It's more than just a digital gimmick — it's an investment that will pay off for patients down the line, the hospital's COO told the CBC this week.

"We'll be able to divert more health dollars to actual patient care, as opposed to hunting and gathering," Barb Collins told Amanda Lang this week.

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Argentina facing default on $1.5B debt

Argentina's negotiations with creditors to resolve a dispute over $1.5 billion in unpaid debts remained deadlocked following talks Friday, setting it on a course for a possible catastrophic default next week.

Argentina will default for the second time in 13 years if it cannot reach a deal with the U.S. hedge funds before July 30. Daniel Pollack, the court-appointed mediator in the dispute, met with Argentine officials and in a statement released after the talks said that progress had not been reached. Pollack also said the Argentinians were returning to Buenos Aires Friday night, but he expects more talks before the deadline.

Following a U.S. judge's order, Argentina can't pay investors who accepted lower-valued bonds after its record $100- billion default in 2001 unless it also pays off creditors who didn't participate in previous bond swaps.

President Cristina Fernandez has long refused to negotiate with the plaintiffs led by New York billionaire Paul Singer's NML Capital Ltd., who spent more than a decade litigating for payment in full rather than agreeing to provide Argentina with debt relief. But Fernandez has been backed into a corner by NML Capital's payment plan and has been sending a delegation to meet the negotiator in New York in hopes of averting a default.

"Argentina is being attacked by speculative interests in a totally undeserved way," Fernandez said in a speech Friday night.

Argentina President Cristina Fernandez has long refused to negotiate with the plaintiffs led by New York billionaire Paul Singer's NML Capital Ltd. (Victor R. Caivano/The Associated Press)

"The ones involved in this suit never loaned a single cent to the Republic of Argentina but instead bought defaulted bonds in 2008 - in other words they bought worthless bonds on the cheap," she said.

The holdout creditors accuse Fernandez's government of refusing to negotiate to provoke a default.

"Argentina's government made clear that it will be choosing to default next week. Creditors arrived at the [debt mediator's] office this afternoon prepared to negotiate and willing to be flexible in forging a solution," Stephen Spruiell, an NML spokesman, said in a statement Thursday. "Argentina again refused to negotiate any aspect of the dispute."

Paying the hedge funds that Fernandez often calls "vultures" in full would likely trigger lawsuits from other bondholders demanding to be paid on similar terms. Argentina's government estimates that the liability could run up to $15 billion.

With nearly $29 billion in foreign reserves, Argentina appears to have the money to pay its bills. But those reserves include loans to other countries, deposits with the IMF and other assets that aren't easily used. Take those away, and Argentina has roughly $16 billion on hand.

Troubled countries often find bond investors willing to lend to them to pay other creditors. But Argentina has been locked out of the bond markets for more than a decade. Some investors would probably step up to lend it money, but at high interest rates — and at high political cost for the leftist government.

Fernandez and her husband, the late president Nestor Kirchner, used much of the Central Bank's reserves to pay down Argentina's debts, provide energy subsidies and fund social programs, weakening its ability to control one of the world's highest inflation rates and manage the money supply.

"It is crunch time in Argentina where the authorities seem to be running out of grace, and literally also of the 'grace period,' to make the missed coupon payment by July 30 in order to avoid another default," said Alberto Ramos, Latin America analyst at Goldman Sachs.

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