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Cellphone roaming rates to be examined at CRTC hearing

Written By Unknown on Senin, 29 September 2014 | 22.39

hi-smartphone

The CRTC is hosting a week-long hearing beginning Monday into what consumers are charged in roaming fees while travelling with their cellphones. (Carlos Barria/Reuters)

Canada's telecom regulator is looking into the rates cellphone companies charge each other to use their networks — a key consideration that indirectly sets how much consumers pay in travel phone usage.

On the heels of a major discussion about what the future of television in Canada will look like, the Canadian Radio-television and Telecommunications Commission (CRTC) will begin a hearing Monday in Gatineau, Que., that looks into, among other things, wholesale roaming rates. Those are the fees that rival cellphone carriers charge other wireless companies when their customers travel outside their home networks and on to others.

Although not directly paid by consumers, they set the trend of how much cell users pay to use their phones to talk while away from home.

The three largest players — Rogers, Telus and Bell — control more than 90 per cent of Canada's wireless market and generally charge each other a relative pittance to piggyback temporarily on each other's networks because each has large, geographically spread out coverage maps.

But wholesale roaming fees are a constant thorn in the side of new wireless companies like Wind, Eastlink, MTS, Quebecor and Mobilicity, because they rely on piggybacking on the large carrier's networks for service. They have typically been charged far more than the incumbents for that service, which raises prices for consumers.

Quebecor Inc., which bought off chunks of wireless spectrum across the country recently with a view towards rolling out national coverage, has singled out roaming rates as a key stumbling block in whether it moves forward with that plan.

In July, the CRTC said Rogers was putting unfair clauses into its roaming agreements with Wind Mobile. An exclusivity agreement that didn't let Wind strike agreements with other carriers, coupled with charging Wind significantly more to use Rogers' network than the latter was charging to U.S. carriers (or the other big two Canadian ones) was unfair and discriminatory, the commission said in a ruling.

When that deal was torn up, Wind managed to negotiate a better deal for itself. The company quickly turned and passed that down the line, slashing the rates it charges its customers for roaming services by as much as 95 per cent.

Wind, along with representatives of the Competition Bureau, are scheduled to appear at the hearings as early as Monday.

This summer the regulator said cell carriers aren't allowed to charge other companies less that what they charge their own consumers. But it's possible that the outcome of the hearings will take that a step further and implement a hard cap on rates that's even lower still.

"We believe it is possible, but hard to predict, that the government could step in and mandate even further reductions in domestic roaming rates before the CRTC completes its review," TD telecom analyst Vince Valentini said in a recent note to clients.


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Air France pilots end 14-day strike

Despite no deal in sight, Air France' s main pilots union on Sunday unilaterally ended a 14-day strike that grounded roughly half of the airline's flights, stranded passengers worldwide, cost tens of millions of dollars and led France's prime minister to decry a "selfish" walkout.

After a late-night, 15-hour negotiating session with management, leaders of the SNPL pilot union walked away with no accord, but with the realization that the strike "is not an end in itself," union spokesman Antoine Amar said. In a later statement, the union said it was ending the strike "in the interests of the company and passengers."

Service 'progressively' returns to normal Tuesday

The walkout, which began Sept. 15, was the longest in more than four decades initiated by pilots at Air France, union official Guillaume Schmid said. The 81-year-old company today conducts about 1,500 flights each day, and last year had 77.3 million passengers, making it one of Europe's biggest carriers.

Air France, in its own statement, said service would "progressively" start returning to normal on Tuesday — meaning that flights already cancelled between now and then won't be reinstated. The company hailed the end of the strike, saying it "will have been costly and damaging. It has only lasted too long."

Air Franch

Air France planes are parked on the tarmac at the Charles de Gaulle International Airport in Roissy, near Paris during the strike by Air France pilots. (Jacky Naegelen/Reuters)

Alexandre de Juniac, chairman and CEO of parent company Air France-KLM, said management team members "are aware of the trauma that our customers, employees and partners just lived through," according to the statement. It said full service was likely to resume late this week.

At the centre of the standoff are Air France's ambitions to develop a low-cost affiliate, Transavia, to tap into new markets in both France and elsewhere in Europe and better compete at a time when budget airlines have cut into the market share once dominated by giant European carriers like Air France.

Pilots concerned over outsourcing

The pilots union said it didn't oppose those plans to build the new business, but rejected the labour conditions that management had planned. They started the strike two weeks ago out of concerns that management was looking for a way to outsource their jobs to countries with lower taxes and labour costs.

In a tactical retreat, the carrier's management offered Wednesday to scrap a central part of the plan to shift most of its European operations to Transavia. But the pilots remained unsatisfied, saying the contracts sought for the low-cost carrier's operations in France alone were insufficient.

Air France, in its statement, "confirmed its decision to continue its accelerated development of Transavia in France, without delay" — which suggested that issues remain unresolved. The carrier said it is sticking to plans to create 1,000 jobs in France through Transavia carrier, including 250 pilot positions.

Several would-be passengers interviewed by The Associated Press expressed frustration and anger during the strike; some grumbled about the tendency of many French workers to strike — and snarl services in the process. Union official Schmid said pilots decided to end the strike because "it was necessary to get out of the media pressure."

Speaking to reporters Sunday, Prime Minister Manuel Valls said: "This strike was misunderstood, it was corporatist. It was selfish."

"It inconvenienced hundreds of thousands — millions — of consumers. It inconvenienced other Air France staffers who made a number of sacrifices over the years. This strike costs a lot in terms of the company's image," he said. "And it has left a trail of division, fracture within its ranks."

Air France-KLM had said previously that the walkout cost up to 20 million euros ($28 million) a day, which could put the total financial bite as high as 300 million euros ($424 million), though Air France wasn't providing specifics yet. The French state holds a 16-percent share of the company, and appoints three board members, a spokeswoman said.

Valls, a Socialist, appeared to side with management, saying the Transavia plan was "indispensable" — and sought to parlay Air France's woes as a metaphor for France's need for reforms more broadly. Valls has been criticized on France's vocal political left in recent weeks for cozying up to business leaders amid the country's persistent economic slump.

"We are in a competitive universe, the low-cost one, and it needs to be faced with the proper weapons," Valls said. "It shows our country needs reforms at every level, and it's true especially in the transportation sector."


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Japan's SoftBank in talks to buy animation giant DreamWorks

Japan's SoftBank Corp is in talks to acquire DreamWorks Animation SKG, the Hollywood studio behind the Shrek and Madagascar movie hits, a person with knowledge of the situation said.

An acquisition of DreamWorks by SoftBank would make it part of a cash-rich Japanese communications and media company that, under founder and chief executive Masayoshi Son, has shown a willingness to take big bets on combining disparate businesses.

The talks were first reported by the Hollywood Reporter, which quoted an unidentified source as saying a buyout would value DreamWorks at $3.4 billion US.

The entertainment trade publication said SoftBank had offered $32 per share for DreamWorks, a substantial premium to the stock's Friday closing price of $22.36.

Buying DreamWorks, which is headed by veteran Hollywood producer and film executive Jeffrey Katzenberg, would make SoftBank the second Japanese technology company to buy a Hollywood studio, following Sony Corp, which bought Columbia Pictures in 1989.

SoftBank has recently cashed in on a share of its investment in Chinese e-commerce giant Alibaba and dropped its pursuit of mobile carrier T-Mobile US in the face of opposition from anti-trust regulators in the United States.

Last week, SoftBank booked a $4.6 billion gain on the share listing of Alibaba Group in New York. SoftBank retains a 32 per cent stake, making it Alibaba's biggest shareholder.

SoftBank has significant stakes in other large listed entities, including U.S. mobile carrier Sprint, through which it had pursued a deal for T-Mobile, internet portal Yahoo Japan and online games maker GungHo Online Entertainment.

A SoftBank spokesman said the company had no comment on the reported talks with DreamWorks. A representative of DreamWorks could not be immediately reached for comment.

In July, SoftBank hired former Google executive Nikesh Arora to run a newly created unit called SoftBank Internet and Media, reporting directly to Son, in a move that stoked speculation the telecommunications company could be considering a move to acquire content production assets.

SoftBank held the equivalent of more than $17 billion in cash and equivalents as of the end of June, its most recent reported quarter.

DreamWorks, based in Glendale, California, has seen its share price has drop 37 per cent this year after two consecutive quarterly losses, a string of weak-performing releases such as Mr. Peabody & Sherman and investor concern about the production costs of its movies.

In July, DreamWorks said the U.S. Securities and Exchange Commision was investigating a writedown it took at the end of 2013 on the animated flop Turbo.

Dreamworks Animation was spun off from DreamWorks Studios in 2004 as a separate listed company.

The earlier Dreamworks studio had been founded in 1994 by Steven Spielberg, David Geffen and Katzenberg, who moved with the spin-off and remains chief executive of the animation company, which also has the franchise hit Kung Fu Panda and owns the rights to Felix the Cat.

The move by SoftBank comes as Alibaba is also looking to expand its video content offered through a set-top box in China. In July, the company announced a partnership with Lions Gate Entertainment for its titles including The Hunger Games.

Sony rebuffed a proposal from hedge fund Third Point to spin off its entertainment business last year in order to separate it from its loss-making electronics division.


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Encana scoops up Texas-based Athlon in $7.1B deal

Encana Corp. has made a deal with Texas-based Athlon Energy to take over the company for just over $7 billion.

Calgary-based Encana announced the deal before markets opened Monday morning. The move gives Encana access to a major Texas oil play and speed up its shift towards more liquids production. The purchase will add the equivalent of about 30,000 barrels of oil per day of production focused in the Midland Basin, part of the Permian formation in West Texas.

"This transformative acquisition further accelerates our strategy and provides us with a prime position in what is widely acknowledged as one of North America's top oil plays," Doug Suttles, Encana president and CEO, said in a statement Monday.

The company has been shifting its production to oil and gas liquids amid persistently low prices for natural gas. Encana now expects to generate 75 per cent of its operating cash flow from liquids production by next year. That's two years ahead of the 2017 deadline the company gave itself to make that switch.

Monday's move is the energy giant's biggest acquisition after a series of assets sales aimed at freeing up cash and focusing on the company's core natural gas business.

In June, Encada sold its Bighorn properties in Alberta to an American private-equity firm for just under $2 billion. It then turned around and spent just over $3 billion to buy oil-producing assets in the Eagle Ford Shale in Texas from Freeport-McMoran.

Last week, Encana sold its remaining stake in PrairieSky Royalty Ltd. for about $2.6 billion to a syndicate of underwriters. That was after the inital IPO of PrairisSky raised billions more to the company's coffers — cash to make moves like the one announced Monday.

Encana will pay nearly $6 billion in cash and assume about $1.15 billion of Athlon's debt.

Athlon's shareholders are being offered $58.50 per share cash, for a total of $5.93 billion.

Athlon shares closed Friday at $46.73 on the New York Stock Exchange. Encana's closed at $23.59 Cdn on the Toronto Stock Exchange.

"With Encana's exceptional resources and the collective expertise of both teams, the next phase will accelerate development and ultimately realize the full potential of the deep inventory of premier projects," Bob Reeves, Athlon's chairman, president and chief executive, said in a joint statement.


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Coal mining revival in Crowsnest Pass eyed by Australian company

The Crowsnest Pass in southern Alberta hasn't seen a working coal mine in decades, but an Australian company has a plan to change that.

Sydney-based Riversdale Resources recently acquired a major coal deposit on Grassy Mountain north of Blairmore. 

It's a large whorl of gleaming, dense coal on the southeast face of the mountain that makes it easy to see why the company is prepared to invest millions of dollars on the venture.

Managing director Steve Mallyon says the company is working on a feasibility study for an open pit mine roughly six kilometres long and two kilometres wide. 

"It feels daunting at times," said Mallyon as he surveyed the remnants of wood coal chutes and rusty machinery left from when the mountain was last mined in the 1950s.

coal

The "Big Show" formation on Grassy Mountain features a gleaming, dense cluster of coal on the southeast face. (Allison Dempster/CBC)

But Mallyon said he's encouraged by what the company is finding.

"The resource is increasing in size and to some extent in quality, and we're seeing the real potential of Grassy starting to emerge."

Riversdale Resources estimates the mine would produce two to four million tonnes of coal a year over 28 years.

The coking coal would be shipped to Asia for steel-making. 

"There's a half a dozen Australian companies that have set up either here or in the Elk River Valley," said Mallyon.

"I think they come here for that combination of factors which really attracted us to Grassy: good coal quality, good experienced people, but also fantastic logistics, with the rail and the number of ports that are available." 

Coal industry rennaissance 

"It'll be a renaissance of this part of the Canadian coal industry and maybe other parts as well," he said.

The company expects to finish its feasibility study by the end of the year.

Then it will decide whether to do an environmental assessment and seek mine approvals to go ahead with the project.

Mallyon estimates the mine would employ 1,000 people during construction and 200 once it's in operation. 

"For a bunch of Aussies coming here, it's been overwhelming. A lot of support. A lot of interest in what we're doing," said Mallyon. 

The prospect of a coal-mining comeback appeals to Crowsnest Pass retiree Neil Pitt.

Old-timer town 

"This is an old-timer town, right now, and it would be nice to have some employment for the young people and to keep them here, to re-vitalize the town," he said. 

In the 2011 Statistics Canada census, 21.5 per cent of the Crowsnest Pass population was aged 65 and over, compared with a national average of 14.8 per cent. 

coal crowsnest

Environmental groups are worried about the potential impact of the renewed interest in coal exploration in the Crowsnest Pass area. (Allison Dempster/CBC)

The population of Crowsnest Pass is 5,565. It shrank by 3.2 per cent from 2006 to 2011, according to the census.

"Currently we have no major industries in the community," said Municipality of Crowsnest Coun. Shar Lazzarotto.

The town could use the well-paying jobs a mine would bring, she said. "A lot of our residents work in the coal mines on the B.C. side."

"I really haven't heard any naysayers," said Jessica Atkinson, co-owner Stone's Throw Cafe, in neighbouring Blairmore.

"It's good news. It's good news for the schools. It's good news for the businesses that are here." 

But some residents do have concerns about reviving the town's coal mining reputation. 

"I'm a little bit concerned about the tourism aspect versus the coal mining," said John Redekopp, a realtor and the founder of a Crowsnest Pass mountain biking group.

"But I'm hoping that we can see "coal mine" and "tourism" in the same sentence and make it work," he said. "I mean, Fernie has pulled it off."

Environmental worries 

However, conservation groups aren't welcoming the idea of an open pit mine on the eastern slopes of the Rocky Mountains. 

"Anywhere in those headwater areas we're always concerned with certain kinds of development, especially that kind of coal mining development that creates huge scars on the landscape, completely changes the topography of the area," said Brittany Verbeek, a conservation specialist with the Alberta Wilderness Association.

It's not just the Grassy Mountain project that concerns Verbeek, but the renewed interest in coal exploration in the region overall.

Canadian coking coal company Altitude Resources is spending $1.5 million this year to drill in the area. 

"Other companies are looking to expand north up into that Livingston area, and that's a really big concern of ours. If they open up one, how many more are they going to open up?" said Verbeek. 

"Environmentally there will always be an impact. I think holistically we've got to look at the total picture of Grassy Mountain," said Mallyon.

"There's a need for an economic stimulus in this part of the world." 

Riversdale Resources is already doing baseline studies on wildlife and air and water quality, Mallyon said.

If the studies and permitting go according to plan, Riversdale Resources expects to open the mine in late 2018.


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Statoil decision to shelve oilsands project is concerning, Prentice says

Written By Unknown on Minggu, 28 September 2014 | 22.39

Alberta Premier Jim Prentice says it's concerning that Norway's Statoil has put its oilsands project on hold.

The company announced earlier Thursday it will postpone a multi-billion-dollar project near Fort McMurray for at least three years, citing rising labour costs and a lack of pipeline access to markets. That announcement followed a similar decision six months ago by Total, and Prentice says it's crucial Alberta solves the pipeline problem quickly.

"Underlying the kinds of capital investment that are being made in the oilsands is the needed assurance that we can access global prices," said Prentice. "If we cannot and people do not have a line of sight on infrastructure and tidewater access, it's going to start to affect our prosperity as a province."

Last year, Statoil president Stale Tungesvik said the company might have to choose between developing projects in the Alberta oilsands and the offshore sites near Newfoundland due to the industry's rising cost.

The costs of oilsands projects are rising because of construction and labour costs, while the price of oil is 20 per cent lower than it was six months ago, making large investments less viable.

The uncertainty over pipeline projects also discourages investment, with the Keystone pipeline to the U.S. stalled in the White House and the Northern Gateway pipeline facing multiple hurdles.

Statoil also announced earlier this summer it would work with the government of Newfoundland and Labrador to help advance contentious oil and gas development in harsh environments, including the Arctic.

Newfoundland is trying to position itself as a centre for Arctic and harsh environment expertise.


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BlackBerry stamps its Passport, Rockefellers get out of oil: BUSINESS WEEK WRAP

It wasn't quite as glitzy as rival Apple's big day last week, but Waterloo Ontario's BlackBerry has had a big week after unveiling its latest smartphone, the Passport, to the world on Wednesday.

The device's main distinguishing characteristic is a square, 4.5-inch screen, designed to be reminiscent of an actual passport. That's a departure from the direction most other smartphone companies have taken, with longer, thinner, rectangular (and, um, bendable) phones. But BlackBerry thinks that feature is going to resonate with its core user base of what are known as "enterprise" customers — serious phone users who spend their time reading spreadsheets and finalizing legal documents, not just playing Angry Birds.

BlackBerry's problems are well documented, but in the early hours and days following the launch, the early reviews are looking pretty positive. The company sold 200,000 phones within two days of launch, CEO John Chen said Friday, enough to take the project to profitability already.

The phone was actually sold out online within hours on BlackBerry's site and on Amazon — something that has to be encouraging for a former tech titan that's fallen on tough times. As technology expert Bob O'Donnell told The Exchange this week, "let's be honest. There's still huge red flags, there's huge concerns [but] I'm cautiously optimistic."

Passport to recovery

BlackBerry wasn't the only business name looking for a fresh start this week. The Rockefeller family, descendants of J.D. Rockefeller, announced a drastic shift in the way the company manages its money this week.

Rockefeller made his billions buying up oil assets across America right before Uncle Sam's unquenchable thirst for fossil fuels began in the late 19th century. Rockefeller amassed so much wealth that when adjusted for inflation, it's believed he was the richest man who ever lived, worth almost $350 billion in today's dollars.

But that was all in the past, his family insists, and the fun that manages much his heirs' remaining wealth committed this week to cleaning up its act.

The Rockefeller Brothers Fund, worth some $860 million at last count, pledged on Monday to sell off all of its fossil fuel assets and move that money into renewable energy investments.

"if he were alive today," fund president and Rockefeller descendant Stephen Heintz said,  "as an astute businessman looking out to the future, he would be moving out of fossil fuels and investing in clean, renewable energy."

Critics have dismissed the move as largely symbolic (after all, the family made billions of dollars for more than a century off fossil fuels) but the move is nonetheless an important one. It's part of a wider global push to develop sustainability by focusing on the legitimate investment opportunities of clean energy. 

At last count more than 180 institutional investors, worth some $50 billion in assets, have joined the pledge. But none likely as symbolically important as the scions of Standard Oil getting out of the oil business.

Wage gap's an age trap

From one group trying to decide where to park their millions, we heard this week about another just trying to get its hands on some. 

The Conference Board of Canada put out new research this week full of new figures to confirm what had long been suspected — when it comes to finances, the kids are really not alright.

The current generation of 25 to 29 year olds are way behind financially compared to their parents at the same age, the report found. Since the 1980s, the gap between how much money young workers make and how much older ones do has widened, a lot.

"There is a pattern here that says the baby boom generation did very well for itself, it's children have been clearly left behind," the report's author told CBC's Dianne Buckner this week.

Even among the generation in trouble, there was a wide divide between the sexes. The report found today that the gap between what women make early in their career compared to the end was about eight per cent 30 years ago. Today, that figure has skyrocketed to 43 per cent — although the Board acknowledges those numbers are skewed by the comparatively small number of women who were in the workforce in 1984.

Economists bleating about the fate of Millennials may be nothing new. But baby boomers dependent on new workers to create the tax base to support social programs like health care may ultimately pay the price for that jobless lump taking up space in the basement.

Lousy business (but a good one)

Speaking of uninvited house guests, the CBC's Sophia Harris told us this week about the return of a parasite that many people haven't had to deal with in a while: head lice.

Head lice are back, it seems, and for any parent who's had to deal with the social stigma they can entail (to say nothing about the painstaking removal process) they can be a headache.

But one man's crisis is another man's opportunity. Entrepreneurs like Dawn Mucci have built up a thriving business on weeding the little critters out, for good. Since forming her business 12 years ago, Mucci has expanded to 22 locations across the country, and says she's growing by about 25 per cent a year.

And it doesn't come cheap: a 90-minute session can cost up to $200. But business is so booming, she says, that she can't expand fast enough to keep up with demand overseas.

Not finding enough people willing to kill vermin for $75 an hour? Talk about a head-scratcher.

Other stuff

Those were just some of our most popular stories this week. Be sure and check our website often for more financial news, and remember to follow us on Twitter here. 

But while you're here, check out some more of our most-read stories this week:

Monday:

Tuesday: 

Wednesday:

Thursday:

Friday:


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Nickel giant Vale gets into the bee business

Morning North

Vale turn to bees for re-greening

0:00 / 7:42

Vale turn to bees for re-greening7:42

Mining company Vale is hoping honey bees will encourage its re-vegetation project in Sudbury.

For decades, nickel producer Vale (formerly INCO) dumped tons of molten slag around its refinery in Copper Cliff. The by-product of the nickel-smelting process accumulated until black mountains were formed.

In 2006, Vale embarked on a $10 million re-vegetation project to grade the landscape, cap the slag with soil, then scatter the ground with clover, grass and wildflower seeds. Trees were also planted.

This year Vale contacted the services of a retired Vale employee, Wayne Tonelli, to raise honeybees on the property.

"With all the wildflowers, it was thought to promote pollination and help the re-vegetation process," the Vale superintendent of decommissioning and reclamation said.

Vale's bee trailer

This utility trailer is home to seven beehives on Vale property near Copper Cliff (Supplied)

Seven hives are now buzzing with more than 350,000 bees. The hives are situated in an old utility trailer owned by Vale, which allows for the bees to enter, but keeps predators likes bears out. 

Dr. Jennifer Babin-Fenske of Earthcare Sudbury supports in the initiative. 

"The bees are actually helping and enhancing and seeding other flowering plants, which helps with the biodiversity of our city."

Sudbury beekeeper Marnie Oystrick is also happy to see the mining company get into the bee business.

"I think it's fabulous because it's a big company and they're harvesting resources from the area. It's their opportunity to give back to the environment and put things back to where they were," she said.

"Bees are in trouble right now. There's a lot of environmental stresses on bees. When a big company like Vale gives a little back into beekeeping, in general, it makes people aware and helps the bees."

Most of the honey produced by the bees remains in the hives as a food source for the bees over the winter. In future years Vale hopes to donate any excess honey to the local food bank or soup kitchen.


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Cuba hands Canadian businessman 15-year sentence on corruption charges

A Canadian company says its president has been sentenced in Cuba to 15 years in prison on corruption-related charges that Cuban officials call part of a widespread campaign against graft.

The Ontario-based automotive company Tokmakjian Group says its lawyers were notified Friday that Cy Tokmakjian was convicted and sentenced on a variety of charges.

Company vice-president Lee Hacker tells The Associated Press that firm managers Claudio Vetere and Marco Puche got shorter sentences.

Cuban officials have provided few details about the case.

But dozens of Cuban executives and government officials and a series of foreigners have been swept up in what is described as an attack on a culture of payoffs by foreigners.

The arrests sent a chill through international business people investing in Cuba.

The company's website lists its head office in Concord, Ont., and says it provides both transportation services and engine repairs.

A statement released by the company in July defended Tokmakjian against the accusations, saying they were "legitimate commercial transactions."

It also said the trial, which ended June 21, was unfairly stacked against him.

The statement said Tokmakjian was held without charge for two years while the results of the investigation were kept secret, and then given just two months to present a defence.

It also said the Cuban court rejected 14 of 18 proposed defence witnesses, including international tax experts.

Cuba's Communist Party newspaper Granma has said Tokmakjian was accused of corruption to obtain benefits in contract negotiations, unauthorized financial transactions, illegally taking large amounts of money out of the country, falsifying documents to avoid taxes and payroll irregularities.


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U.S. economy climbs, but expect turbulence: Don Pittis

On the face of it the numbers certainly look good.

With every revision, the U.S. Commerce Department has upped its estimate. On Friday, its third and final assessment showed gross domestic product increasing at a healthy rate of 4.6 per cent this spring.

Five per cent growth in a mature advanced economy is a strong number. Since the Second World War, the average U.S. annual growth rate has been just over three per cent. 

But more important, it is easy to forget that despite all its troubles, the economy of our southern neighbour remains the world's hugest. Five per cent growth in that single economy represents something near a trillion dollars added to the globe's economic activity.

And for the country's biggest trading partner, that kind of growth cannot help washing over the long undefended border.

Don't expect a smooth transition

Despite much worse figures in the first three months of the year, widely blamed on weather, these are not just good growth numbers.They are trending toward spectacular. And so long as this is not just another false dawn, the transformation to sustained growth is, unfortunately, not likely to be smooth.

But before getting gloomy I should mention some of the positive signs buried in Friday's statistics. Consumer spending was relatively weak, but another way of thinking of that is that consumers are keeping their powder dry, holding back on spending till they are confident the corner has been turned. For the economy, that is money in the bank.

The place where the growth really happened was in business spending.

"Real non-residential fixed investment increased 9.7 per cent in the second quarter," says the Bureau of Economic Analysis in its release, up from less than two per cent in the previous quarter. Investment in office buildings and factories grew nearly 13 per cent, up from three. Equipment purchases rose 11 per cent up from a decline of one per cent.

Is there pent-up growth?

While some of those increases could represent investments delayed from the frigid first quarter, business spending of that magnitude may signal the beginning of a virtuous circle, releasing a pent-up surge in real investment in the economy that has been lacking during the last seven years of economic doldrums.

Not that there hasn't been lots of money floating around. It's just that new business investment, the kind that creates jobs and represents the rumbling engine of growth, has been in short supply. Instead, all that money has been bidding up the price of existing assets.

And of course that is where we come to the rough patch, not just in the United States but in Canada and many other parts of the world.

As I have moaned about many times in the past, all that money our governments and central banks keep pumping into the economy has been doing little but inflate the value of stocks. And Canadian houses.

Asset buying has created a virtuous circle of its own, as rising prices and low interest rates encourage the well-heeled to borrow and bid prices even higher. That has made them a lot richer, at least on paper, but it has done little to stimulate the productive part of the economy.

Spiral down in assets

The danger now is that as the U.S. central bank tightens the money supply by cutting bond buying and raising interest rates, this asset-based part of the economy will move from a virtuous circle to its opposite, the vicious spiral.

In the long run this is a good thing, and must happen. As we've seen, during periods of rising asset prices there is no need for businesses to invest. In such times, money tucked away in stocks (or Canadian houses) will turn into more money, even if the productive capacity of the country as a whole remains relatively unchanged.

And with luck, this is about to change. In the next phase the companies that do well will not be those cutting staff and increasing profitability. It will not be the companies that count on artificially low interest rates to borrow to buy back their own stock. 

In the real growth stage of an economy the companies that do well are those that hire and expand, the ones that invest to turn good ideas into excellent products and services. That in turn means good jobs and, eventually, a surge in consumer spending. It is what we have been waiting for.

But the transition is a tricky one that must be well managed. A disruptive crash in markets will do no one any good. A 50 per cent fall in Canadian house prices as predicted by Hilliard MacBeth last week, could overwhelm the economic benefits of a low Canadian dollar and a U.S. growth spurt.

It will be a balancing act. It will be the time that U.S. central bank chair Janet Yellen and Bank of Canada governor Stephen Poloz earn their enormous salaries. 

With luck, strong U.S. growth means there is only a short gap between the Great Recession and recovery. But hang on tight. It may be a rough crossing.


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EU loosens rules for cellphone use on planes

Written By Unknown on Sabtu, 27 September 2014 | 22.40

The European Aviation Safety Agency has opened the way for passengers to use portable electronics and cellphones at any time on aircraft.

Under new guidelines issued Friday, Europe's airlines can allow passengers to use their electronics or their cellphones during the entire flight. The rule applies anywhere in European airspace, no matter where the flight originated.

There is no longer any necessity to keep devices in airplane mode, which disables wifi access.

Book readers, tablet computers, mp3 players and other devices would all be permitted.

 "We're basically opening the door where, in theory, you'll be able to continue making your phone call through the gate throughout the flight ... like you would on a train," said EASA spokesman Ilias Maragakis.

Airlines will be left with the dilemma of how to prevent chatterboxes from gabbing throughout an entire flight, potentially annoying anyone within hearing range.

In trains, there is now frequently a "silent" car where talking on phones is prohibited.

At high altitudes, there is not likely to be a cell phone signal, but airlines might be able to provide that service to customers, for a price.

The U.S. Federal Aviation Administration last year lifted its own restrictions on the use of most personal electronic devices during takeoffs and landings last October but said devices must be kept in "airplane mode."

Canada followed suit this spring.

In Canada, cellphones and smartphones, which are transmitting devices, can only be used in normal mode during the taxi-in phase, when plane heads in toward the gate. If on flight mode, the phones can also be used throughout all flight phases.


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'Bond King' Bill Gross leaves PIMCO for Janus Capital

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Bill Gross helped build PIMCO into one of the world's largest bond managers since founding the firm in 1971. (Pacific Investment Management Co./Associated Press)

Legendary bond investor Bill Gross is leaving the $2 trillion investment firm he founded to join a much smaller company called Janus.

Janus announced Friday that Gross, who helped found Pacific Investment Management Company, LLC (better known as PIMCO) in 1971. Over the past 40 years PIMCO has grown to become the largest bond fund on earth.

"I chose Janus as my next home because of my long standing relationship with and respect for CEO Dick Weil and my desire to get back to spending the bulk of my day managing client assets," Gross said in the statement.

Gross's departure is the second unexpected exit from PIMCO in recent months, as the company's former No. 2 Mohamed El-Erian left the firm earlier this year to spend more time with his family — although the two had been reportedly publicly and privately clashing before that.

Although not a household name with the population at large, Gross is a towering figure in the bond market, which is worth something in the neighbourhood of $85 trillion, far and away larger than all the stocks on earth combined.

"When you look at the investable bond market in Canada, it's over $1 trillion," says Noel Archard, the head of bond firm Blackrock Canada. 

Relatively few Canadians likely have any direct exposure to PIMCO, but activity in the bond market that firm dominates dictates the rates offered to consumers on loans and mortgages. And literally every Canadian worker also has exposure through Canada's national pension plan, which keeps about 25 per cent of its $220 billion worth of investable assets in bonds.

The surprise announcement, which rattled global stock and bond markets, comes just days after news broke that U.S. securities regulators were investigating PIMCO and Gross in connection with an exchange-traded fund he managed at PIMCO.

A source familiar with the matter told Reuters that Gross had been clashing with the firm's executive committee and had threatened to quit multiple times. But the Wall Street Journal reported Friday that the company was preparing to fire Gross.

In a statement, PIMCO said that it had a succession plan in place and that its management board would confirm a new chief investment officer shortly — but declined to name who that might be.

"While we are grateful for everything Bill contributed to building our firm and delivering value to PIMCO's clients, over the course of this year it became increasingly clear that the firm's leadership and Bill have fundamental differences about how to take PIMCO forward," PIMCO's managing director said in a terse statement.

Shares in Allianz, the German insurance conglomerate that controls PIMCO, sank more than five per cent in Germany following the news, while Janus surged more than 35 per cent in New York.


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Stock markets rebound Friday after Thursday's steep fall

Toronto and New York markets rebounded Friday from steep losses the day before, as investors sought bargains amid Thursday's lower stock prices.

Toronto's S&P/TSX composite index soared 133.20 points to close at 15,026.77, propped up by gains in information technology and energy stocks.

The Canadian dollar continued its fall below 90 cents US, and ended the day down 0.38 of a cent to 89.65 cents US.

A strong U.S. dollar and a revision to U.S. GDP showing second quarter growth was higher than expected weighed down the loonie.

Those better U.S. GDP numbers also buoyed Wall Street. The Dow Jones industrials added 167.35 points to 17,113.15, the Nasdaq gained 45.44 points to 4,512.19 and the S&P 500 index saw an uptick of 16.86 points to 1,982.85.

The Bank of Canada has put forward signals in the past week that it is hoping for a lower Canadian dollar, with speeches from governor Stephen Poloz and deputy Carolyn Wilkins reinforcing the message.

The bank is concerned about the slow growth of exports from Canada and a lower dollar could help exporters win more markets.

Despite the slow recovery of demand from the U.S., there is no clear upward trend in Canadian exporting.

"The Bank of Canada wants a lower loonie," he said. "It'll drive exports. We're an export-led economy and that's what we need," said Kevin Headland, director of the portfolio advisory group for Manulife Asset Management. Canadian markets remain vulnerable to low commodity prices, including gold and oil prices.

The Toronto market plunged more than 200 points Thursday, capping a fifth day of declines and taking the index below 15,000 for the first time since May. The U.S. indexes did even worse, with the Dow down nearly 250 points.

But there clear reasons for optimism in markets today, with Apple regaining its shine after apologizing for a technical glitch.

Nike jumped 11 per cent after its earnings rose sharply, and Janus Capital Group soared 32 per cent after announcing it had hired star bond fund manager Bill Gross.

In Toronto BlackBerry had a strong gain after earnings exceeded expections and Bombardier was up on news of a firm order for 40 CSeries jets.


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New York Fed denies deference to big banks

The Federal Reserve Bank of New York says it "categorically rejects" allegations made by a former examiner that the Fed has become deferential to America's biggest banks and fails to effectively regulate them.

The New York Fed was responding to a story on news site ProPublica and radio show This American Life that alleges a culture of deference to banks such as Goldman Sachs.

Carmen Segarra

Former Fed bank examiner Carmen Segarra says she found a culture of compliance with the banks when she was posted at Goldman Sachs in 2012. (YouTube)

The report critical of the Fed is driven by secret recordings made by New York Fed bank examiner Carmen Segarra, who was fired after just seven months on the job.

She had been stationed inside Goldman Sachs in 2012, as is the practice for all Fed examiners. She alleges she attempted to make constructive criticism of the bank, only to be contradicted and eventually fired by Fed managers.

'Absence of exercise of power'

"I think it would've been just as scary if I had gone in there and found like an aggressive Fed that was really mean and sort of you know trying to nitpick," she told This American Life. 

"I think that all that power sort of being abused, that's a very scary thing. But when you find the opposite, the absence of exercise of power, the absence of the exercise of responsibility, then you are just like, this is a problem, because you've been made the overarching regulator, and the country is looking to you to make things better after the crisis, and if you can't do it, then we need to talk about who can."

The New York Fed denies Segarra was fired for failing to be deferential to Goldman, saying the firing was "based entirely on performance grounds, not because she raised concerns as a member of an examination team about any institution."

Regulator defends role

The Fed defended its role in regulating Goldman Sachs in a statement posted on its website today.

"The New York Fed works diligently to execute its supervisory authority in a manner that is most effective in promoting the safety and soundness of the financial institutions it is charged with supervising," it said.

Segarra, who lost a wrongful dismissal case against the Fed, said she began taping meetings with Goldman executives and Fed managers after finding an alarming level of compliance with the bank by the regulator.

Among her allegations:

  • She heard a Goldman executive say "once clients were wealthy enough, certain consumer laws didn't apply to them," a statement recorded in the meeting's minutes. When she raised the issue with a Fed manager, he told her the executive did not say that, or if he did, he didn't mean it.
  • A deal by Goldman to take over risky assets from Spanish bank Santander was not properly disclosed to the Fed, but managers did not follow through to reprimand the bank.
  • In 2012, Goldman was rebuked by a Delaware judge for its behaviour during a corporate acquisition. Goldman had advised one energy company, El Paso Corp., as it sold itself to another energy company, Kinder Morgan, in which Goldman actually owned a $4-billion stake. Segarrra asked questions and was told by a Goldman executive that the bank did not have a conflict of interest policy. The Fed found some divisions of the bank did have a policy, though not a comprehensive one. The Fed pressured Segarra not to mention the inadequate conflict of interest policy at Goldman in her reports and, she alleges, fired her after she refused to recant.

ProPublica reporter Jake Bernstein, who previously won a Pulitzer for his investigative reporting on Wall Street, points out a 2009 probe of the Fed by Columbia University professor David Beim that also found a culture of compliance with the big banks.

That probe was meant to determine why the Fed, which regulates the banks by stationing its examiners inside the institutions, failed to foresee the problems that led to the 2008 financial crisis.

"The New York Fed had become too risk-averse and deferential to the banks it supervised," Bernstein wrote.


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BlackBerry stamps its Passport, Rockefellers get out of oil: BUSINESS WEEK WRAP

It wasn't quite as glitzy as rival Apple's big day last week, but Waterloo Ontario's BlackBerry has had a big week after unveiling its latest smartphone, the Passport, to the world on Wednesday.

The device's main distinguishing characteristic is a square, 4.5-inch screen, designed to be reminiscent of an actual passport. That's a departure from the direction most other smartphone companies have taken, with longer, thinner, rectangular (and, um, bendable) phones. But BlackBerry thinks that feature is going to resonate with its core user base of what are known as "enterprise" customers — serious phone users who spend their time reading spreadsheets and finalizing legal documents, not just playing Angry Birds.

BlackBerry's problems are well documented, but in the early hours and days following the launch, the early reviews are looking pretty positive. The company sold 200,000 phones within two days of launch, CEO John Chen said Friday, enough to take the project to profitability already.

The phone was actually sold out online within hours on BlackBerry's site and on Amazon — something that has to be encouraging for a former tech titan that's fallen on tough times. As technology expert Bob O'Donnell told The Exchange this week, "let's be honest. There's still huge red flags, there's huge concerns [but] I'm cautiously optimistic."

Passport to recovery

BlackBerry wasn't the only business name looking for a fresh start this week. The Rockefeller family, descendants of J.D. Rockefeller, announced a drastic shift in the way the company manages its money this week.

Rockefeller made his billions buying up oil assets across America right before Uncle Sam's unquenchable thirst for fossil fuels began in the late 19th century. Rockefeller amassed so much wealth that when adjusted for inflation, it's believed he was the richest man who ever lived, worth almost $350 billion in today's dollars.

But that was all in the past, his family insists, and the fun that manages much his heirs' remaining wealth committed this week to cleaning up its act.

The Rockefeller Brothers Fund, worth some $860 million at last count, pledged on Monday to sell off all of its fossil fuel assets and move that money into renewable energy investments.

"if he were alive today," fund president and Rockefeller descendant Stephen Heintz said,  "as an astute businessman looking out to the future, he would be moving out of fossil fuels and investing in clean, renewable energy."

Critics have dismissed the move as largely symbolic (after all, the family made billions of dollars for more than a century off fossil fuels) but the move is nonetheless an important one. It's part of a wider global push to develop sustainability by focusing on the legitimate investment opportunities of clean energy. 

At last count more than 180 institutional investors, worth some $50 billion in assets, have joined the pledge. But none likely as symbolically important as the scions of Standard Oil getting out of the oil business.

Wage gap's an age trap

From one group trying to decide where to park their millions, we heard this week about another just trying to get its hands on some. 

The Conference Board of Canada put out new research this week full of new figures to confirm what had long been suspected — when it comes to finances, the kids are really not alright.

The current generation of 25 to 29 year olds are way behind financially compared to their parents at the same age, the report found. Since the 1980s, the gap between how much money young workers make and how much older ones do has widened, a lot.

"There is a pattern here that says the baby boom generation did very well for itself, it's children have been clearly left behind," the report's author told CBC's Dianne Buckner this week.

Even among the generation in trouble, there was a wide divide between the sexes. The report found today that the gap between what women make early in their career compared to the end was about eight per cent 30 years ago. Today, that figure has skyrocketed to 43 per cent — although the Board acknowledges those numbers are skewed by the comparatively small number of women who were in the workforce in 1984.

Economists bleating about the fate of Millennials may be nothing new. But baby boomers dependent on new workers to create the tax base to support social programs like health care may ultimately pay the price for that jobless lump taking up space in the basement.

Lousy business (but a good one)

Speaking of uninvited house guests, the CBC's Sophia Harris told us this week about the return of a parasite that many people haven't had to deal with in a while: head lice.

Head lice are back, it seems, and for any parent who's had to deal with the social stigma they can entail (to say nothing about the painstaking removal process) they can be a headache.

But one man's crisis is another man's opportunity. Entrepreneurs like Dawn Mucci have built up a thriving business on weeding the little critters out, for good. Since forming her business 12 years ago, Mucci has expanded to 22 locations across the country, and says she's growing by about 25 per cent a year.

And it doesn't come cheap: a 90-minute session can cost up to $200. But business is so booming, she says, that she can't expand fast enough to keep up with demand overseas.

Not finding enough people willing to kill vermin for $75 an hour? Talk about a head-scratcher.

Other stuff

Those were just some of our most popular stories this week. Be sure and check our website often for more financial news, and remember to follow us on Twitter here. 

But while you're here, check out some more of our most-read stories this week:

Monday:

Tuesday: 

Wednesday:

Thursday:

Friday:


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Ford recalls 850,000 vehicles for non-deploying airbags

Written By Unknown on Jumat, 26 September 2014 | 22.40

2014 Ford Escape

The Ford Escape is one of many vehicles the company recalled Friday for possibly defective airbag deployment. (Ford/Associated Press)

Ford Motor Company is recalling more than 850,000 vehicles across North America for a defect that may result in air bags not deploying when needed.

The company said Friday that the affected vehicles are all from the 2013 and 2014 model years for the following models:

  • Ford C-MAX
  • Fusion
  • Escape
  • Lincoln MKZ

In the affected vehicles, the restraints control module short circuits.

"If a short circuit occurs, the airbag warning indicator will illuminate. Depending on the location of the short circuit, the deployable restraint systems (e.g., airbags, pretensioners, side curtains) may not function as intended in the event of a crash," Ford said.

The company says it isn't aware of any accidents or injuries related to this condition.

Dealers will replace the restraints control module at no cost to the customer.

It's Ford's first airbag-related recall of the year, which is significant because rival GM has recalled millions of vehicles this year for defective ignition switches that can render airbags inoperable in a crash, among other things.

It's unclear how many cars in Canada might be affected, but CBC News will update this story with that information when it's available.


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American economy growing at fastest pace since 2011

Autos More Jobs

The American economy expanded at its fastest pace in more than two years this past spring, official data showed Friday. (The Associated Press)

After a dismal winter, the U.S. economy expanded at an annual rate of 4.6 percent in the spring, the fastest pace in more than two years, the government reported Friday. The solid rebound is expected to provide momentum for strong growth the rest of the year.

The Commerce Department said the April-June figure compared to a decline of 2.1 percent in the first three months of the year, when a harsh winter caused the biggest drop in activity since the Great Recession.

Friday's result was even better than the 4.2 percent estimate made a month ago. The latest revision reflects improvements in business investment and exports. Economists believe the economy is growing above 3 percent in the current July-September quarter.

The 4.6 percent growth in gross domestic product, the economy's total output of goods and services, was the government's third and final look at GDP in the second quarter. The first estimate pegged growth at 4 percent and that was revised last month to 4.2 percent.

The final upward revision reflected new-found strength in business investment, which grew at an annual rate of 9.7 percent in the second quarter. The result is better than the government's previous estimate of 8.1 percent, bolstered by both investment in structures and equipment.

The revision showed that export sales grew at an 11.1 percent rate in the second quarter, stronger than a previous 10.1 percent estimate, another factor helping to boost growth.

Consumer spending, which accounts for more than two-thirds of economic activity grew at a 2.5 percent annual rate, unchanged from the previous estimate but double the 1.2 percent growth in consumer spending in the first quarter.

The surge of activity this spring was in part a turnaround from a terrible winter, which disrupted factory production and kept consumers away from shopping malls.

Economists expect much less volatility in growth going forward. Many say the economy will grow at an annual rate of 3 percent or better in both the current July-September quarter and in the final quarter this year.

But because of the rough start to the year, growth for all of 2014 is expected to be a lackluster 2.1 percent, little changed from last year's 2.2 percent GDP increase.

Analysts have much a much brighter outlook for 2015. They say that the economy is finally entering a period of above-trend growth as unemployment level falls. Those growing payrolls should translate into stronger consumer spending, which accounts for about two-thirds of economic growth.

Economists at JPMorgan Chase predict growth of 3 percent next year, a significant improvement over the average annual growth rates of around 2 percent that the country has experienced since the end of the recession in June 2009.

Federal Reserve policymakers last week decided to keep a key short-term interest rate at record lows, near zero, and indicated that they planned to keep it there for a "considerable time."

Analysts viewed the Fed's comments as support for their view that the Fed will not start to raise interest rates until the middle of next year. The low rates will help support more spending by consumers and businesses to boost growth and drive the unemployment rate lower.


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BlackBerry trims loss to better than expected $207M

BlackBerry reported a $207-million US loss for the second quarter, much better than analysts were expecting, despite a $50-million drop in revenues.

The second-quarter earnings report was released after the company's official launch earlier this week of the Passport, a keyboard smartphone with a 4.5-inch​ screen aimed at corporate users.

Despite being headquartered in Canada, BlackBerry reports its earnings in U.S. dollars. On a per-share basis, the quarterly loss for the Waterloo, Ont.-based smartphone maker works out to 39 cents per share.

But when certain one-time items related to the company's restructuring process are stripped out, the loss narrows to two cents a share, or $11 million. That's much better than the loss of 16 cents per share that analysts who cover the company were expecting that figure to be.

BlackBerry's $207-million loss is almost 80 per cent less than the loss figure it posted this time last year, a $965-million loss, or $1.84 per share. 

Also Friday, the company reported revenues of $916 million, a drop from $966 million in the previous quarter. 

The company had about the same amount of cash on hand as it did in the previous quarter, with a slight uptick of $11 million to $3.1 billion.

CEO John Chen, in a BlackBerry release, called it a "solid quarter," and predicted the company would break even on cash flow by the end of this fiscal year, and would be profitable during the following fiscal year. 

Investors appeared to agree, with BlackBerry shares gaining seven per cent on the TSX early Friday

But the numbers show that the company's revenues are increasingly coming from services and software products, not smartphone devices themselves.

BlackBerry reported 46 per cent of its revenue came was from hardware, 46 per cent from services and eight per cent from software. 

The number of BlackBerry Messenger users is also on the rise. In the second quarter, there were 91 million monthly active users, an increase of 85 million in the previous quarter.

The company's EZ Pass Program issued almost three times as many licences for BlackBerry Enterprise Server 10 this quarter over the last one, at about 3.4 million. The enterprise system allows corporate users to manage all their devices on the same system — across operating systems including BlackBerry, Android and iOS, as well as across devices from desktop computers to smartphones.

A growing share of the company's revenue is coming from North America: 32.4 per cent this quarter versus 26.3 per cent in the same quarter last year, and the highest in the last five quarters. 

The second quarter also saw the creation of the BlackBerry Technology Solutions Unit, focusing on software and the company's Internet of Things strategy — which refers to the new generation of internet-connected devices such as thermostats, televisions, fridges and cameras that can be controlled remotely via mobile devices such as smartphones.


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Kinder Morgan loses motion to allow tree cutting on Burnaby Mountain

The National Energy Board has dismissed a motion by Kinder Morgan asking the federal regulator to forbid the City of Burnaby from blocking the company's pipeline survey work.

The board says in a decision released Thursday that Kinder Morgan is essentially asking it to force Burnaby not to enforce its bylaws, and the board can't do that.

Trans Mountain Burnaby Moutain tree removal - Sept. 10, 2014

Stumps and branches of trees that were recently cut down by workers hired by Kinder Morgan are seen in the Burnaby Mountain Conservation Area. (Darryl Dyck/Canadian Press)

It says before it can decide on such an order, Kinder Morgan must first raise constitutional questions about whether the board actually has the legal authority to determine if the bylaws apply to the company.

The motion was filed by Kinder Morgan earlier this month after Burnaby halted the company's survey work, saying cutting down trees and boring large holes in the ground violate the city's bylaws.

At issue is Burnaby's opposition to the expansion of the Trans Mountain pipeline and Kinder Morgan's proposal to tunnel through Burnaby Mountain in its attempt to survey a new pipeline route.

The city had applied for an injunction to block Kinder Morgan from conducting the survey work, but a B.C. Supreme Court judge dismissed the application last week.
 


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Apple winning back fans with fast response to glitch

Apple's response to a high-profile gaffe involving its iPhone software may be more important than the glitch itself.

As the giant tech company scrambled to fix a software glitch that left some of its new iPhones unable to make calls, some analysts said Thursday that Apple is doing the right thing by quickly acknowledging and apologizing for the problem — which it was slower to do with earlier iPhone problems.

Apple released a new update late Thursday that the company said would repair the problems caused by software it released Wednesday morning. And it repeated an earlier apology to owners of its newest iPhones who were affected by that buggy release.

"There's a certain perception that Apple has to get things right, and when they don't, the whole company gets questioned," said Carolina Milanesi, chief of research at Kantar Worldpanel. "But they came out and said 'We apologize; we're working 24/7 to fix it.' I think that's what matters."

Apple stock fell Thursday

Apple's stock fell nearly 4 per cent Thursday, leading a broader decline in technology shares, a day after the company was forced to withdraw an update to its new iOS 8 mobile software because of glitches that primarily affected customers who had purchased its new iPhone 6 and 6 Plus models. The 6 Plus phone has also been the subject of social media reports that its extra-large shell is vulnerable to bending.

Early Friday it was up 1.8 per cent. 

In a statement Thursday, Apple defended its manufacturing standards and said bending "is extremely rare" with normal use of an iPhone. The company said just nine customers had contacted Apple to report a bent iPhone 6 Plus since they went on sale Friday.

Later in the day, Apple released a new update, dubbed iOS 8.0.2, which it said would fix the problems caused by the iOS 8.0.1 update that it released on Wednesday. "We apologize for inconveniencing the iPhone 6 and iPhone 6 Plus users who were impacted by the bug in iOS 8.0.1," the company said in a statement.

A day earlier, the company had also apologized "for the great inconvenience experienced by users" and vowed to work "around the clock" to fix the problem.

10 million sold

Cupertino-based Apple has said it sold a record 10 million of the new iPhone models over the weekend, in what the company has called one of the biggest product launches in its history. It also reported this week that nearly half of all iPhone and iPad users had upgraded to the new software known as iOS 8.

That new software contains a number of new features and is more complex than earlier versions of iOS, analysts said. Apple released the 8.0.1 update on Wednesday to fix some flaws that were detected after iOS 8 was released — only to find the 8.0.1 update created problems of its own. The new problems included interference with calling and with a feature that lets people unlock their phones with their fingerprint.

That's not uncommon, according to veteran tech analyst Ross Rubin of Reticle Research. "All major companies have released fixes that they've had to pull because of unforeseen side-effects," he added.

As for the bending issue, Rubin said the iPhone 6 Plus is "a large, thin device. That's not to say customers should treat it gingerly, but it's still an electronic product and it's an investment, and it should be treated as such."

Held to higher standard

Apple is held to a higher standard by many consumers, analysts said. But Milanesi said she thought the company suffered more harm a few years ago, when it was slow to acknowledge complaints about poor reception and dropped calls that affected new iPhone 4 models when they were released in 2010. The company eventually offered a fix for the problem, after then-CEO Steve Jobs initially suggested users just needed to hold the phone differently.

"There wasn't any of that this time," Milanesi said. She noted that Jobs' successor, CEO Tim Cook, had also taken responsibility and apologized for initial problems with Apple's Maps software when it was first released.

Meanwhile, one analyst said Thursday's stock sell-off was more likely related to broader market concerns than investor unease about the new iPhones.

"Earnings is what drives the stock the most," said Walter Piecyk of BTIG Research. "It's too early to say what the impact's going to be, but it does not appear to be something that would impact the company's ability to deliver on earnings" in the next two quarters.

Apple said users affected by the software glitch can connect their phone to a Mac or Windows computer and download a file to restore an earlier version of the iOS 8 software.

Apple offered a Web page with instructions: http://support.apple.com/kb/HT6487 .


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Petronas may pull out of B.C. LNG project

Written By Unknown on Kamis, 25 September 2014 | 22.39

hi-petronas

Malaysian energy conglomerate may pull out of an LNG project on B.C.'s coast, the Financial Times says. (Bazuki Muhammad/Reuters)

Malaysian state-owned energy company Petronas is threatening to pull out of a liquefied natural gas project on the north coast of British Columbia, the Financial Times reported Thursday.

The newspaper said Petronas chief executive Shamsul Abbas was ready to call off the $10-billion project amid a delayed regulatory approval process, plans by the provincial government to impose an LNG tax and a "lack of appropriate incentives."

"Rather than ensuring the development of the LNG industry through appropriate incentives and assurance of legal and fiscal stability, the Canadian landscape of LNG development is now one of uncertainty, delay and short vision," Abbas told the Financial Times.

Abbas is expected to visit Canada later this week.

Petronas is leading the Pacific Northwest LNG project near Prince Rupert, B.C. The company holds a 62 per cent stake in the project.

Its partners include China's Sinopec with a 15 per cent stake, Japex Montney with 10 per cent, Indian Oil Corp. Ltd. with 10 per cent and PetroleumBrunei with three per cent.

Pacific Northwest LNG is one of several projects that various companies have been considering as a way to export natural gas by tanker from the West coast.

The B.C. government proposed earlier this year a two-tier LNG tax on income from liquefaction of natural gas at facilities in B.C.

Petronas bought Progress Energy Corp. in 2012 in a deal that was closely scrutinized by Ottawa.


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Is BlackBerry's new smartphone a Passport to a brighter future?

The BlackBerry Passport may have already been in the works before he came on board, but its release encapsulates the strategy chief executive John Chen has for the beleaguered company as it attempts to claw back market share in the smartphone industry.

"​It's really the crux of his strategy," said telecom analyst Troy Crandall of MacDougall, MacDougall & MacTier. "This phone definitely seems to be moving along the strategy that Chen set out back when he became CEO and revamped the strategy for BlackBerry."

Chen, who took over the reins of BlackBerry in November 2013, is focusing on the corporate market — also known as the enterprise market — and targeting the regulated sectors that include health, finance, the military and government. All those sectors require high-level secure communications, and it's an area where BlackBerry is still considered an industry leader.

'Probably the direction they should go'

"It seems logical," Crandall says about Chen's strategy. "If it didn't seem logical, the stock would be well below where it currently is. So obviously the street also feels this is probably the direction they should go at this point."

The new Passport with its large square screen will certainly appeal to those in the financial sector needing to read spreadsheets, or to doctors wanting to look at X-rays or CT scans, Crandall said. And  it also comes equipped with a physical keyboard, a feature much valued by its core audience.

"The Passport is very clearly a business-centricproductivity-centric device, and that sort of focus is a really good thing," Jan Dawson, chief analyst at Jackdaw Research, a technology research and advisory firm, said in an email. "BlackBerry spent just a few minutes talking about more consumer-centric features like the camera and the Amazon App Store, which will provide consumer-centric apps, but the whole rest of the time was all about business and productivity.

BlackBerry Event 20140924

The new Passport, with its large square screen, will certainly appeal to those in the financial sector needing to read spreadsheets, or to doctors wanting to look at X-rays. And it also comes equipped with a physical keyboard, a feature much valued by its core audience. (Chris Young/Canadian Press)

"That's a recognition that that's the one area where BlackBerry can compete now in smartphones, and that recognition is long overdue."

The smartphone launch comes days before the company reports on its second quarter earnings. BlackBerry continues to lose money and is expected to report negative earnings per share. And with the company still in its turnaround phase, revenues will continue to be down, Crandall said. 

But technology industry analyst Jeff Kagan said Chen has done a good job so far in stabilizing BlackBerry's core business. The bad news, he said, is that that core business now has a market share of less than one per cent.

While Kagan believes that BlackBerry will never be a strong competitor to the Apple iPhone, or the Samsung Galaxy or other Android phones, it can still be a viable, smaller competitor. That's why he expressed some disappointment in the Passport, which he said is receiving mixed reviews and may alienate some of BlackBerry's core consumers. 

"Blackberry could really have hit it out of the park if they focused on what their core really loved about their devices. I may be wrong, but I just don't see hardcore Blackberry users loving this strange little device," Kagan said.

'High-flying days have passed'

"The Passport will not help BlackBerry ride high once again," he said. "Those high-flying days have passed. The real question is will Passport capture enough market share to help Blackberry stay alive. We'll just have to wait and see."

Ultimately, Crandall said, BlackBerry wants most of its revenue coming from services, rather than the actual handsets, which are a fairly low margin device. (Chen caused a stir back in April when he suggested the company might exit the handset business — he later clarified his remarks).

But Chen has been putting more emphasis on BlackBerry's mobile device management (MDM) business, a collection of software that allows IT departments to manage different devices connected to their corporate networks. 

He has emphasized BlackBerry's popular BlackBerry Messenger (BBM) application which is now also available on Apple and Android devices. And Chen has said his long-term plans for BlackBerry include competing in the burgeoning M2M or machine-to-machine  business of connecting all manner of devices, from kitchen appliances to automotive consoles to smartphones

"Future growth will come, if it comes at all,  from growing the BBM base and MDM opportunity beyond just BlackBerry devices, and from M2M," Dawson said. "I think we might see modest growth at BlackBerry for a year or two, and then it's a question of whether they can begin to capture a significant share of the new markets they're going after.

"That's pretty much up in the air at this point because they haven't put a lot of flesh on the bones in terms of where they'll take M2M and BBM going forward."

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Jason Kenney faces foreign-worker fallout in own backyard

James Rajotte has been getting an earful. 

Like many of his caucus colleagues, the Conservative MP from the riding of Edmonton-Leduc is taking a lot of flak about his government's decision to reduce access to temporary foreign workers.

"I've certainly been receiving a fair number of complaints from a lot of business owners, especially in the small business and restaurant sector," Rajotte said in an interview with CBC News.

"My overall perspective is that there are labour shortages, and business owners are not (using temporary foreign workers) because they want to but because they have to."

The further south you go in his riding, Rajotte says, into the Nisku oil and gas industrial park for example, the lower the unemployment rate gets, and the more acute the labour shortage.

Sandy Nelson and Shaunna Jennison-Yung skpic

Shaunna Jennison-Yung, right, comforts her friend Sandy Nelson, who lost her job at a Weyburn, Sask., restaurant after 28 years. The two said they were replaced by temporary foreign workers. (CBC)

"High wages (in Nisku) means a cascading effect on other sectors," Rajotte noted. A big part of the problem, he said, is finding people willing to work long hours in those sectors, especially in the restaurant industry.

"These (employers) are not taking an easy route and hiring foreigners; this is a last resort," he says.

Like most government decisions, the clampdown on temporary foreign workers has come with a political price.

Last spring, as media reports swirled about questionable use of the scheme by companies small and large, Employment Minister Jason Kenney met for days on end with his staff, hearing hours of briefs and brainstorming a solution, according to a senior government source.

Kenney knew he was walking a political tightrope, trying to maintain the program in industries and regions where employers face legitimate labour shortages, while clamping down — and crucially, being seen to clamp down — on companies that are allegedly displacing Canadians to get cheaper labour.

The minister had long been troubled by reports that included such examples as a coal mine in northern B.C. which listed fluency in Mandarin as a job requirement when requesting foreign temporary workers. The case was the subject of a union-led federal court challenge, but was dismissed.

Treatment of waitresses a 'kryptonite moment'

But the final straw, according to an official who helped craft the government response, was a report that two waitresses were laid off in Estevan, Saskatchewan, only to be replaced by foreign workers.

"That was the kryptonite moment for us," the source recalls. "This is one of the hardest places to find Canadians (to work) and yet, they were laying off Canadians."

Kenney's decision: phase in a 10 per cent cap on the number of low-wage workers coming in, ban their use in areas where unemployment is six per cent or higher, and increase processing fees and fines for those who abuse the program.

The result: applications to the program were down by 75 per cent this summer over last, Kenney told the Commons last week.

But the result is also growing anger among employers in sectors as far-flung as the fashion and film industries, to fish packing plants, to the hospitality sector and restaurant industry, to mines in remote northern regions. 

All say the changes create too many obstacles in a tough labour market.

And nowhere are the critics more vocal than in Alberta.

The political problem is so acute that the province's new premier, Jim Prentice, weighed in this week, saying temporary foreign workers will be one of the first issues he discusses with his old boss, Prime Minister Stephen Harper, when he meets with him for the first time in his new role (possibly next week).

Labour shortages mean need is real, economist says

The problem in the West is real, argues Philip Cross, a former chief economist at Statistics Canada.

Cross penned a report last spring for the Fraser Institute entitled, "Do labour shortages exist in Canada?" His answer: a resounding yes in Alberta and Saskatchewan, and to a lesser extent in British Columbia.

"It's a real phenomenon. You can't say nothing is happening," he argues. 

Cross points to the evidence he's collected:

  • 80 per cent of the temporary foreign workers brought into Canada were going to B.C. and Alberta.
  • The youth unemployment rate in Alberta is low.
  • More than a third of people in Alberta are working more than 50 hours a week.
  • Many older workers are delaying retirement in order to work longer. 

He warns these are "coping mechanisms" in a tight labour market that cannot be sustained.

"I think a lot of employers are saying...these are just Band-Aids. We need a longer-term solution."

Other options

Cross says the government has options other than allowing in more foreign workers. For example, he suggests finding a way to encourage the high number of unemployed youth in Ontario to move west.

Rajotte, the Alberta MP, also says a solution could take other forms.

 "I guess I'd like to see a recognition of the reality our province is facing in terms of the labour situation," he said. "I understand the concerns about the temporary foreign worker program, but perhaps there are other ways to address it. Perhaps through changes to the immigration system."

In that regard, Rajotte echoes the sentiments of NDP immigration critic Jinny Sims, who says that even with the changes, temporary workers are still too easy to access. She would much rather see long-term immigration used to compensate for labour market problems.

Kenney, for his part, is standing firm on the new policy.

His office has argued that businesses, small and large, need to do a labour market assessment as part of their business plan. If they have to offer higher wages to attract people, so be it.

Still, concern about the repercussions could explain the government's haste to offer a break to small business on EI premiums announced earlier this month by Finance Minister Joe Oliver. 

Some Conservatives seem to feel the pot needs sweetening, as they march into election season running on their banner theme: economic prosperity for all.


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Cyber experts warn of powerful 'Bash' computer bug

Cyber experts are warning a security flaw known as the "Bash" bug may pose a serious threat to computers using Unix-based operating systems such as Linux and Mac OS X, even more grave than the "Heartbleed" bug that surfaced in April.

Bash is the software used to control the command prompt on many Unix computers. Hackers can exploit a bug in Bash to take complete control of a targeted system, security experts said.

The U.S. government's United States Computer Emergency Readiness Team, or US-CERT, issued an alert saying the vulnerability affected Unix-based operating systems including Linux and Apple's OS X.

The "Heartbleed" bug allowed hackers to spy on computers but not take control of them, according to Dan Guido, chief executive of a cybersecurity firm Trail of Bits.

"The method of exploiting this issue is also far simpler. You can just cut and paste a line of code and get good results."

Tod Beardsley, an engineering manager at cybersecurity firm Rapid7, warned the bug was rated a "10" for severity, meaning it has maximum impact, and rated "low" for complexity of exploitation, meaning it is relatively easy for hackers to launch attacks.

"Using this vulnerability, attackers can potentially take over the operating system, access confidential information, make changes, et cetera," Beardsley said. "Anybody with systems using Bash needs to deploy the patch immediately."

US-CERT advised computer users to obtain operating system updates from software makers. It said that Linux providers including Red Hat Inc. had already prepared them, but it did not mention an update for OS X. Apple representatives could not be reached.

Tavis Ormandy, a security researcher at Google, said via Twitter that the patches seemed "incomplete." Ormandy could not be reached to elaborate, but several security experts said a brief technical comment provided on Twitter raised concerns.

"That means some systems could be exploited even though they are patched," said Chris Wysopal, chief technology officer with security software maker Veracode.

"Heartbleed," discovered in April, is a bug in an open-source encryption software called OpenSSL. The bug put the data of millions of people at risk as OpenSSL is used in about two-thirds of all websites. It also forced dozens of technology companies to issue security patches for hundreds of products that use OpenSSL.

Bash is a shell, or command prompt software, produced by the non-profit Free Software Foundation. Officials with that group could not be reached for comment.

The Bash bug is also known as Shellshock.


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Pick-and-pay TV inevitable, C.D. Howe report says

Forcing TV service providers to offer their customers television channels on a pick-and-pay basis would be a waste of time, because it will come in any case, says a new study.

The C.D. Howe Institute report to be released today says ever-changing technology will soon put viewers squarely in the driver's seat, allowing them to choose everything they watch one program at a time.

And it suggests it would be better for regulators to determine whether broadcasters should continue to be required to fund the production of Canadian content.

The study also opposes the idea of forcing new video-distribution services, such as Netflix, to pay into funds that subsidize that content.

Entitled Let the Market Decide: The Case Against Mandatory Pick-and-Pay, the study comes as the Canadian Radio-television and Telecommunications Commission conducts a comprehensive review of how consumers get their TV programming and how they pay for it.

The Harper government has been promoting the pick-and-pay model as good for consumers.

And the CRTC has been debating how that might work, suggesting an array of options for getting there. One suggestion would allow people to buy only the individual channels they want to watch, on top of a pared-down, price capped basic service that would include either mainly Canadian channels or a mix of Canadian and U.S. channels that would otherwise be available free over the air.

"Any proposals to mandate such 'pick-and-pay' channel choices are deeply misguided and are largely an exercise in futility in the light of the technological revolution that is unfolding in the communications sector," said C.D. Howe, which regularly advocates for free market solutions to any problem.

Regulation called 'harmful'

"Any regulation would become irrelevant at best, harmful at worst."

During two weeks of hearings which finished last week, one of the industry's big players acknowledged that it expects a sea change in how people get their TV programming.

Rogers told a CRTC panel that it expects traditional TV will be delivered almost exclusively over the Internet, possibly within 10 or 15 years.

But it rejected the idea of allowing viewers to pay for television channels strictly one at a time and said the regulator should not put a cap on the price of smaller, basic TV packages.

The CRTC has asked Canadians to consider whether it should cap the cost of basic service at between $20 and $30 a month.

We'll all soon cut the cord

Both Rogers and Bell said regulatory reforms are needed to encourage the production of more high-quality Canadian content, but urged the CRTC not to leave them at a competitive disadvantage with new online video services such as Netflix.

The C.D. Howe Institute questions whether consumers will want a basic service at all and says market forces and technology will likely encourage more people to "cut the cord."

"The trend is away from traditional 'push' programming to 'pull' consumer preference, where consumers have choices in what, when and where to watch video content," said the institute.

The road to change — and the CRTC's ability to try and control it — took a negative turn this week when Netflix refused to turn over sensitive corporate information to the regulator, questioning its very authority over Internet-based video streaming companies in the process.

Netflix and other so-called "over-the-top" video services have rejected proposals by some provincial governments, traditional broadcasters and cultural groups that would see them regulated and effectively forced to pay into funds that prop up Canadian television production.

They have been backed by the Harper government, which has stated clearly that it won't allow the CRTC to enact regulations that would created a so-called "Netflix tax."


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UN Climate Summit: A 'game-changer' for global warming?

Written By Unknown on Rabu, 24 September 2014 | 22.39

UN Secretary General Ban Ki-moon looks to have pulled off a remarkable feat in gathering world leaders together to spell out their national action plans for climate change, at a time when the issue had just about fallen off political radars.

"Climate change is the defining issue of our times," Ban has said over and over again, urging that "now is the time for action."

And this week the heads of UN member countries appear to have taken up the challenge. One after the other, leaders pledged billions for a global climate fund to help developing nations, set specific targets to cut greenhouse gas emissions and promised greater use of clean energy.

But promises in the hot media glare — and mass demonstrations — of New York are one thing. There's still the matter of whether the steps needed to mitigate global warming will actually be taken after the summit wraps up and all the brouhaha fades. 

Scott Vaughan, the president of the Canadian-based International Institute for Sustainable Development, is confident they will. 

"Everybody is absolutely focused on what needs to be done practically, concretely to get an agreement in 2015," he said in an interview with CBC News, referring to the next key climate conference to be held in Paris next year.

Of course the cautionary tale here is that the last international climate negotiations in Copenhagen in 2009 failed to produce a binding agreement among countries to enact effective policy to reduce greenhouse gas emissions.

A 'game-changer'?

Vaughan, who's in New York meeting with some of summit participants and tracking pledges, said the New York summit is a "game-changer if anything is," and cites the convergence of civil society, corporations and many key governments in tackling climate change.

'They keep coming up with ideas like pledges which imply that you can, by some kind of central planning, ordain a collective outcome and the world doesn't work that way'- Scott Barrett, professor at Columbia University's Earth Institute.

In recent decades, climate change policy has aimed to prevent the Earth from heating up by a global average of 2 C above pre-industrial times.

However, the failure of world governments to commit to any lasting action at past meetings likely means a 2 C rise is a foregone conclusion, some scientists say, pointing to the fact that the average temperature has already risen nearly 1 C since the 19th century.

Now, negotiators and researchers are scrambling to keep us from heading towards an increase of between 3 C and 4 C by the end of this century.

Vaughan said there are two goals to work towards: reducing greenhouse gas emissions and providing support for the most vulnerable countries to adapt to climate change.

For the latter, French President Francois Hollande, the host of next year's climate conference, pledged $1 billion. Other EU countries such as Denmark and Switzerland have made similar commitments.

As for reducing emissions, that involves a shift away from fossil fuels in favour of renewable energy, something Greenpeace Canada said is already happening.

"For the U.S. and China, their biggest problem, in terms of greenhouse gas emissions, is coal," said climate and energy researcher Keith Stewart. 

"Both countries are actually taking measures to reduce coal and that's the kind of thing that builds trust," he said. The U.S. and China are the world's two biggest producers of carbon pollution.

Corporations jumping on the bandwagon

This past summer, U.S. President Barack Obama announced a proposal to cut carbon pollution by 30 per cent from 2005 levels by 2030. The main way to carry out that rule would be by limiting emissions from coal-fired power plants.

China, the world's biggest GHG emitter, last year invested $54 billion in renewable energy and is the world's biggest provider of wind, solar and other clean energy technologies, according to data by the Pew Charitable Trusts.

Part of that, said Ian Bruce of the David Suzuki Foundation, is because of China's toxic air pollution. But the other aspect is that high carbon fossil fuels are risky investments.

Obama UN

U.S. President Barack Obama called on other world leaders to follow his lead in tackling climate change. Obama recently announced a measure to cut carbon pollution by 30 per cent in the U.S. (Pablo Martinez Monsivais/Associated Press)

"The cost of renewable energy has decreased almost 100 per cent over last five years," said Bruce, the foundation's science and policy manager, "while the cost of fossil fuels has been very volatile and on the rise."

That cost equation helps explain why corporations are jumping on the bandwagon and attended Tuesday's summit.

"Certainly, having 200 CEOs in the room at the UN right now underscores that they are as concerned about their sustainability as civil society is," said the IISD's Vaughan.

The World Bank also announced that more than 1,000 businesses — along with 73 countries and 22 states, provinces and cities — have expressed their support for carbon pricing. Not to mention the announcement of the Rockefeller Brothers Fund selling $50 billion US worth of fossil fuel assets in an effort to fight global warming. 

"When the family that built the very first multinational oil company says it's time to get out of fossil fuels, this is an important moment," said Greenpeace Canada's Stewart. 

"And when you have these things coming together, there is an opportunity for politicians to actually lead rather than tell us why they can't do anything." 

Strategy needed, not pledges

Still, Scott Barrett, a natural resource economics professor at Columbia University's Earth Institute and a former lead author of the UN's Intergovernmental Panel on Climate Change, is not convinced anything concrete will come out of the Paris climate conference, despite the enthusiasm on display in New York.

"The real problem is at the global level," said Barrett. "We have not found the means to change the incentives to get the countries to actually adopt limits, essentially on emissions​."

He said international treaties are not enforceable, even when they are legally binding. Using the example of the 1997 Kyoto Protocol, Barrett said the U.S. didn't participate and Canada ended up withdrawing. 

USA-CLIMATECHANGE/MARCH

Some of hundreds of thousands took part in the People's Climate March through Midtown, New York on Sunday, including UN Secretary General Ban Ki-moon, former U.S. Vice President Al Gore and actor Leonardo DiCaprio. (Adrees Latif/Reuters)

"Unfortunately in the climate area, strategy is the last thing that anyone is ever thinking of as far as I can see, because they keep coming up with ideas like pledges which imply that you can, by some kind of central planning, ordain a collective outcome and the world doesn't work that way," he said. 

There is one bright spot, he noted, in the effort to fight climate change — the 1987 Montreal Protocol, an international treaty to protect the ozone layer by phasing out chemical substances that deplete it. 

Those substances — chlorofluorocarbons (CFCs) — are also powerful greenhouse gases. 

The power of the Montreal Protocol lies in the ability to ensure signatories follow the rules by prohibiting certain trades with other member parties.

Since its implementation, the Montreal Protocol has reduced CFCs by the equivalent of 135 billion tonnes of carbon dioxide, according to a 2007 book published by the UN Environmental Program. 

Barrett said the protocol is a solution to a small problem, but it is a solution nonetheless. 

"We've been doing this for 25 years and we've failed for 25 years," he said. "We need to come up with newer approaches, people don't want to repeat the past mistakes."


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