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Cricket farmer says crop could help solve world food shortage

Written By Unknown on Minggu, 30 November 2014 | 22.39

If the idea of munching on a handful of crickets has you gagging,  Darren Goldin is sure he can change your mind. He's betting the farm on it  Next Millennium Farms, to be exact. 

That's where Darren and his two brothers are raising crickets for human consumption. 

When he first shared his plans with friends, they thought his idea was pretty loopy. But it was his mother's words he says he remembers best: "I wish you all the success in the world, but I will never eat any of your product!'"

Cricket Farm

The rows of tall racks at Next Millennium Farms hold containers of crickets — 30 million of the hopping insects. (Frank Faulk/CBC)

Next Millennium Farms, the only farm of its kind in Canada, is located near Campbellford, Ont., and has been operating for about a year. (To hear Frank Faulk's audio documentary on raising crickets for food, tune in to CBC Radio's Sunday Edition on Nov. 30 starting at 9 a.m., or click the link at the top of this page.)

The crickets are raised in a cavernous structure — think IKEA warehouse, except the lights are dimmed and the contents of the containers are chirping. 

The rows of tall racks hold containers of crickets — 30 million of the hopping insects. Females lay up to 200 eggs at a time, and the eggs take eight to 10 days to incubate.

  • Female crickets lay up to 200 eggs at a time, using a needle-like organ called the ovipositor.
  • Male crickets do most of the chirping.
  • There are more than 900 species of crickets.
  • A cricket's ears are located on the knees of their front legs.
  • 20,000 farmers in Thailand raise crickets for human consumption.

Darren Goldin already had years of experience raising crickets for pet food when last year he read a United Nations paper on population and projected food shortages. The report hailed insects as, "a healthy, nutritious alternative to  mainstream staples such as chicken, pork, beef and even fish."

Daniel saw the future, and plunged in.  

"Every week we produce between 2,000 to 4,000 pounds of raw crickets," he says.

"About 80 per cent of  the produce is ground into high-protein cricket flour. We sell mainly to companies who then use the flour into everything from tortilla chips to muffins to energy bars. We are having a hard time keeping up with the demand."

The cricket flour sells for $40 a pound.

"The remaining crickets are used in a line of products we sell through our website, like 'Bug Bistro' — a tasty snack of crickets, sold in three flavours: Moroccan, Honey Mustard and Barbecue," Daniel says.

Crickets as food

Derek Delahay, manager of the production facility at Next Millennium Farms, prepares crickets for human consumption. (Frank Faulk/CBC)

Raising insects for human consumption is a market worth about $25 million US in North America, Daniel says, with crickets making up the bulk of those sales. He says demand is growing quickly - Next Millenium Farms took three months to get its first 100 orders for cricket flour when it opened a year ago, and is now recording more than 100 orders a month.

The eight full-time and five part-time staff do everything from raising the crickets, to processing the meat, to developing recipes.  

Goldin is quick to point out that his business is not a gag. Part of his reason for starting the cricket farm was to help the environment.

"The planet's resources to produce food for its population are incredibly taxed," he says. "When you look around this continent and around the world, there are  massive droughts and water shortages everywhere, as well as massive hunger and starvation."

Crickets as snacks

Next Millennium Farms sells cricket flour, but it also makes its own snack products with cooked crickets, including the 'Bug Bistro' line that comes in three flavours: Moroccan, Honey Mustard and Barbecue. (Frank Faulk/CBC)

He says crickets need two pounds of feed to produce one pound of meat, whereas hogs need around five pounds of feed to produce one pound of meat, and cows need 10 to 15 pounds of feed to produce one pound of meat.

"The ability for us to produce protein to feed the planet is exponentially larger if we change our farming practices," Daniel says.

"You look at water consumption, and insects are consuming roughly a tenth of the water that chickens, cows or hogs need to produce the same amount of protein. As the population of the planet grows we are not going to have any choice. So maybe this year it's a novelty, but at the end of the day we are going to have to find new ways to produce protein to sustain the population."

(To hear Frank Faulk's audio documentary on raising crickets for food, tune in to CBC Radio's Sunday Edition on Nov. 30 starting at 9 a.m., or listen here.)


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Cheap oil, Coke milk & BlackBerry cash: BUSINESS WEEK WRAP

We've written before about the dangers of trusting online reviews but one of Canada's biggest companies landed in the middle of an online review scandal of their own this week — albeit accidentally.

The CBC's Sophia Harris reported this week that several Bell Canada workers have been caught giving glowing reviews to the company's new MyBell app.

It seems Bell workers were going online and giving five-star reviews to the app, using superlative praise to describe an app that effectively lets users log in to check their account balances and help them pay.

"Just words that you do not say in real life," was how Scott Stratten, the president of UnMarketing described it.

The company fessed up but says employees were merely acting "overzealously" of their own will, and not being compelled to do what they did. Regardless, the whole story is another excellent reminder that when it comes to the murky world of online reviews, consumers should always be skeptical.

BlackBerry's cash back deal

INDONESIA-gasoline

A customer fills his gas tank at a station in Jakarta. The price of oil has plummeted in recent weeks, and that's driving down prices for things like gasoline all over the world. (Darren Whiteside/Reuters)

If telling customers how great your product is doesn't work, it seems logical that paying them hundreds of dollars will. That's exactly what BlackBerry tried this week, with an offer of up to $600 to anyone who brings in an old iPhone to switch to one of the company's Passports or other models.

It was a bold move designed to get attention, and it did just that. It's a sure fire way to gain new customers, but at least one expert we talked to this week said the move smacked of desperation, equating the move to a bribe by the company.

Another analyst said the move may pay off in the long run, as they take a short-term hit to cash flow in exchange for having more customers than they do now, in three or four years' time.

How low can oil go?

Without a doubt, our biggest story this week was oil. We've reported extensively on the cratering oil price for several weeks now, as the price of a barrel has plunged from $105 US as recently as July to under $70 today.

This week, the big news event was an OPEC meeting that experts said was the best hope to stem the tide. If OPEC, a cartel that makes about 40 per cent of the oil on Earth, would agree to turn off the taps a little, that would be enough to drive prices higher.

But that didn't happen. OPEC didn't change their production quotas one iota. And the Saudis, who control OPEC, seem happy to let the price of oil crater for now because they hope that'll be enough to drive new competitors in the U.S. out of business. 

Canada has a lot at stake in this old-fashioned Mexican — er, Saudi — standoff, as governments in Ottawa and many provinces depend on oil money to meet their budget promises. And most of those calculations were assuming an oil price closer to $90 per barrel, not $60.

Certainly a story worth paying attention to, as it's not going away any time soon. (The same can't be said of OPEC itself, the CBC's Peter Armstrong wrote this week.)

The rich are getting richer

Income inequality is another story that we have covered extensively in recent months, and there was a development this week as one of Canada's biggest banks said the problem isn't getting any better.

The gap between rich and poor is indeed getting worse, TD said this week, which is reason for concern no matter which end of the socioeconomic spectrum you're on. But the good news, the bank says, is it's not too late to fix things — or at least take steps in that direction.

Governments investing in things like skills training, education, child care and productivity can help bridge the gap and make the pie bigger for all. Because as TD economist Craig Alexander told us this week, "elevated levels of inequality is not just bad for individuals, it's bad for your economy and your society."

Milka-cola?

On the lighter side, a story this week that Coca-Cola was going to start making its own milk was one of our most-read stories this week. An executive at the company told an investor conference this week that Coke is going in on a joint venture with some progressive dairy farmers for something called Fairlife — a type of milk that the company says has more protein than regular milk, but much less fat and sugar.

"We'll charge twice as much for it as the milk [we're] used to buying in a jug," Sandy Douglas said, later adding he's confident the product is going to "rain money" one day.

Regardless of price, reaction to the news has been all over the map, with some people saying the health benefits appeal to them — but others getting a little sour over the idea of some sort of Franken-milk.

Other stuff

Those were some of our most read stories of the week. Be sure to check out our website often for more, and don't forget to follow us on Twitter here.

In the meantime, here's some more of our popular stuff from the past 7 days that you may have missed.

Monday

Tuesday:

Wednesday

Thursday 

Friday


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Higher exports & more household spending boost Canadian GDP

MacDougall Steel

Canada's economy expanded by even more than economists had been expecting in the third quarter, Statistics Canada reported Friday. (MacDougall Steel Erectors)

Canada's gross domestic product expanded at a 2.8 per cent annual pace in the past three months, Statistics Canada said today, much better than expected by economists.

An increase in exports and an uptick in household spending were the two main drivers of the increase, the data agency said Friday.

The 2.8 per cent figure is well ahead of the 2.1 per cent that economists had been expecting — but still not as good as the 3.9 per cent pace of growth posted by the U.S. earlier this week.

"Note that while this is a solid growth figure, this is still underperformance relative to the U.S," Scotiabank said after the numbers came out.

Exports increased by 1.7 per cent. In the previous quarter, they rose by 4.4 per cent. Canada shipped out 2.2. per cent more crude oil during the period, the data agency said.

Fridays numbers cover July, August and September — for the most part, the three-month period before oil prices began their precipitous decline. So it should be interesting to monitor if oil exports stay strong even after prices have cratered.

"The good news is that the economy was in a surprisingly very good place heading into the energy price storm," as BMO economist Doug Porter put it.

The Bank of Canada had been expecting growth to come in at about 2.3 per cent, which means the reality is better than expected. Normally, that would be a sign the bank would be leaning toward hiking rates to slow down inflation. But in this case, it's likely the bank will think the strong GDP growth will be offset by sinking oil prices, which are down by almost 40 per cent from where they were this summer. 

The end result is the strong GDP doesn't mean it's any more likely the central bank will be in a hurry to hike rates, Porter said.

Another key Canadian industry, the auto sector, posted strong growth figures.

Canada exported 2.2 per cent more cars and trucks during the period, down from the 10 per cent gain in the previous quarter, but still a solid showing.

TD Bank senior economist Randall Bartlett said the falling oil prices "remain a dark cloud on the horizon" and noted that lower profits in the oil sector will weigh on production growth and capital spending.

But strength in all other parts of Canada's economy are maybe enough to offset that, he said. 

"In any event, with momentum in other sectors, Canada's economy appears well-positioned to weather the storm," Bartlett said.

CANADIAN ECONOMIC GROWTH
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Oil price collapse means lower gas prices for motorists

A collapse in world oil prices will mean good news for Canadian motorists heading into the Christmas season, with one petroleum analyst saying gas prices will plummet this weekend.

Oil prices have dropped about 35 per cent from mid-summer highs because of a higher U.S. dollar, lower demand and most particularly a glut of global supply.

While the price drop has led to losses on the Toronto stock market and concerns for provincial budgets in Alberta, Saskatchewan and Newfoundland and Labrador, it's forecast to bring relief to Canadians filling up at gas stations.

Dan McTeague, a former Liberal MP and founder of price-tracking and forecasting website TomorrowsGasPriceToday.com, said oil prices tend to suggest where gasoline is going to go, often within 48 hours. That's on top of prices that typically go down in the fall anyway.

McTeague's website shows gas prices dropping across the country. Prices listed in cents per litre on the site at mid-day Friday included:

  • Vancouver: 124.9
  • Edmonton: 91.9
  • Calgary: 98.9
  • Regina: 102.9
  • Winnipeg: 99.4
  • Toronto: 113.9
  • Ottawa: 102.9
  • Montreal: 116.4
  • Fredericton: 109.9
  • Halifax: 115.9
  • Charlottetown: 116.9
  • St. John's: 115.4

The website's seven-day forecast for all these cities predicted a 100 per cent chance prices will go down.

CRUDE OIL PRICE

On Friday, the price of U.S. benchmark crude — used to make gasoline and other products — is down by more than a third since the summer and closed down a whopping $7.54 at $66.15 US a barrel..

"Those savings will make their way through the economy and lower costs," including lower taxi fares, McTeague said.

He expects prices to stay low until late winter or early spring.

However, energy analyst Roger McKnight of En-Pro International cautions there are some factors working against lower fuel prices for consumers, such as the falling Canadian dollar.

Financial Markets Wall Street

Specialist Michael Gagliano, left, who handles energy stocks, works with traders on the floor of the New York Stock Exchange. U.S. stocks indexes were mixed in early trading. (Richard Drew/Associated Press)

The loonie lost 0.84 of a cent to 87.41 cents US, on top of a 0.75 of a cent slide Thursday, even as Statistics Canada reported that third-quarter gross domestic product ran ahead at an annualized pace of 2.8 per cent. That was much higher than the 2.1 per cent rise that economists had expected.

McKnight adds that as oil companies make less money producing oil, they will likely look to boost refining margins.

In Calgary, Alberta Premier Jim Prentice told a business audience there are no simple solutions for the revenue shortfall that will result from plummeting oil prices.

Prentice said Alberta can't just wait for high prices to return.

Government spending will have to be watched closely, the premier said, and there will be an effect on Albertans.

But he also said there will be no sales tax and Alberta's low tax regime will continue.

In Newfoundland and Labrador, Premier Paul Davis said Friday — a day after freezing discretionary spending — that he's not worried about oil's long-term future, but that the decline has forced his government to save money.

"Our budget was set at $105 [US a barrel] this year, [so] every time the oil drops below that, it causes problems for our budget," he told CBC News.

Meanwhile, the Toronto stock market extended its losses Friday as energy stocks continued to sell off.

The S&P/TSX composite index dropped 177.74 points or 1.19 per cent to 14,744.70, with the energy sector down 2.25 per cent.

U.S. stocks ended mostly lower in a holiday-shortened session. 

The Standard & Poor's 500 index eased five points to close at 2,067 Friday.

The Dow Jones industrial average rose less than a point to close at 17,828. The Nasdaq edged up four points to 4,791.


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Conrad Black settles lawsuits with Hollinger

The once mighty media company Hollinger Inc. says it has entered into court approved settlement agreements with Conrad Black and his wife, as well as with Black's onetime business partner David Radler, resolving all claims against each other.

The announcement issued Friday by the litigation trustee for Hollinger, which was created by Black as a holding company for his media interests, said the settlement agreements were approved "in their entirety" on Nov. 13 by the Ontario Superior Court of Justice.

It said the settlement involved claims against Radler, a former director and officer of Hollinger and his company, North American Newspapers Ltd., as well as claims asserted by Radler against the estate of Hollinger Inc.

Also resolved were claims involving Black, a former officer and director of Hollinger Inc., his wife, Barbara Amiel-Black, also a former director, and their companies — Conrad Black Capital Corp., Moffat Management Inc., Black-Amiel Management Inc., 1269940 Ontario Inc. and 2753421 Canada Limited.

Details of the settlements were not immediately available.

Hollinger Inc. and its subsidiaries, Sugra Ltd. and 4322525 Canada Inc., are currently subject to proceedings in Canada under the Companies' Creditors Arrangement Act and in the United States under Chapter 15 of the U.S. Bankruptcy Code.

The company filed for court protection shortly after Black was convicted of wire fraud in the United States in 2007 while head of Hollinger in a case that, among other things, involved allegations of fraud involving a complicated system of "non-competition" payments.

Black, and former business partners Peter Atkinson and John Boultbee, were found guilty of three counts of fraud each by a U.S. jury in 2007, and Black was also convicted of one count of obstruction of justice.

But the 7th U.S. Circuit Court of Appeals later tossed two of the three fraud convictions against the men after the U.S. Supreme Court ruled that one of the laws used to convict had been too broadly applied.

As a result of the initial verdict, Black was sentenced to 42 months and fined $125,000, serving 37 months in a Florida prison. Boultbee was sentenced to time served, fined $500 and ordered to pay $15,000 in restitution to the Sun-Times Media Group. Atkinson was given time served and fined $3,000.

Radler reached a deal with U.S. prosecutors in return for testimony against his former colleagues. He pleaded guilty to one count of mail fraud at U.S. District Court, and was sentenced to 29 months in jail and ordered to pay a fine of $250,000.


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Unpaid internships, bank job cuts & confusing contracts: BUSINESS WEEK WRAP

Written By Unknown on Sabtu, 08 November 2014 | 22.39

Prepare yourselves for a shock. According to Canada's official watchdog for the telecom sector, the number of Canadians who made complaints about their phone, cable and Internet services actually went down this year.

It's the first time in seven years that that's happened. Canada's Commissioner for Complaints for Telecommunications Services said in its annual report Tuesday that there were 11,340 complaints to the office this year from customers upset about bogus charges, poor service or billing errors on their TV, phone or internet bills.

That's actually a decline of 17 per cent from last year's level and a sign, some say, that the industry's attempts to fix its broken image on the customer service front is bearing fruit. Ottawa enacted the Wireless Code this year, and the CCTS suggested the clarity that came with that law may have done a lot to clean up some of the more vexing industry complaints.

Smartphone Kill Switch

There were fewer complaints about telecom services this year, but one practice that seems to be getting worse is misleading contracts, the CCTS said. (Ben Margot/Associated Press)

"We are cautiously optimistic that the industry as a whole is becoming more focused on customer issues and on how it addresses customer problems," was how the commissioner put it.

Hard as it may be to believe, complaints overall were down — and by a lot. But the report did say there's one area that still bothers many Canadians.

Complaints about misleading contracts were up by almost 75 per cent, far and away more than any other category. That's an issue the Wireless Code specifically tried to tackle, so an increasing number of misleading contracts is something the industry — and consumers — would be well served to keep an eye on.

Work for free?

When you're central bank governor, choosing your words carefully is a life skill. And that's a lesson Stephen Poloz learned this week when he inadvertently waded into the debate about unpaid work.

In a series of comments in Ottawa, Canada's top central banker essentially said that his advice for any young person looking for work in this tough economy is to be willing to get experience on your resume at any cost — even if it's free work.

To some, that's just helpful advice. But to others, it is part of a systemic problem. Headlines were full this year of stories about unpaid internships exploiting students, with some estimates suggesting there's as many as 300,000 young people toiling away in "internships" across the country that accomplish little more than having them do menial jobs for no money, and letting companies cut back on labour costs.

India Uber Asia

Canadian taxi drivers say ride-sharing services like Uber put them at a disadvantage. (Rafiq Maqboo/Associated Press)

It's a complex issue, and one everyone seemed to have an opinion on this week. And while it seems likely that Poloz will think twice before sharing his views off the cuff in future, the subject of how to get young people working is probably a good discussion for Canadians to have. 

Scotiabank axes 1,500 jobs

When you're a bank raking in more than $6 billion in profit this year, the optics aren't good when your newly minted CEO comes out and announces you plan on firing 1,500 employees, 1,000 of them across Canada. It's a big, ugly number that's sure to dominate the news cycle

But that's exactly what Scotiabank CEO Brian Porter did this week, saying the bank would be streamlining its workforce as part of a cost-cutting plan that also includes writing down hundreds of millions of dollars.

The reaction was swift, and predictable, with critics panning the company's apparent heartlessness in their slavish devotion to the almighty dollar. But as Don Pittis wrote in one of our most-read stories this week, there's nothing particularly shocking about it.

Banks are in the business of making money, and there's nothing wrong with that. That's good for them, good for their shareholders, good for their employees — and good for Canada, Pittis wrote.

Scotiabank has long had a reputation for being one of the more international banks we have, with a track record of expanding into areas where it sees growth, like it did in Asia and Latin America decades ago. Sometimes those bets don't go well, but more often than not they do. Banks must manage their risk, so if they think it's a time to retrench a little before the next bout of expansion, that may prove to be best for everyone in the long run.

Visa and MasterCard cut rates

Speaking of being in the business of making money, the two biggest credit card companies on earth did something this week that they're not in the habit of doing: they promised to lower their fees.

Not the fees that consumers pay, but rather the fees paid by merchants. Every time they process a transaction for a retailer, the card companies take a fee of somewhere between one and three per cent of the purchase price. Those fees can add up, and retailers say since the explosion in so-called "premium" cards they've gotten worse.

hi-unpaid-intern-istock_000002000957small

Stephen Poloz accidentally waded into the debate over unpaid internships with some comments this week.

But the card companies say they're going to cap the average rate of fees at no more than 1.5 per cent for the next five years at least. Retailers say they're happy to pass those savings on to consumers in the form of lower prices, but there's a body of evidence from when this happened in other countries that suggests the savings will be negligible — and worse, the card companies will be likely to just jack up fees somewhere else to make up for it.

As one prominent bank analyst told us this week, "consumers bear the brunt of the change."

Road rage as cabbies flight to block uberX

There was another battle over fees in the news this week as a taxi driver lobby group launched a national campaign to get people to think twice before signing up with ridesharing services like Hailo, Uber and Lyft.

If you've never heard of them, all three let users pay for taxi rides via a smartphone app. With some, it's a taxi that shows up, and the prices are the same. With othera, notably uberX, it's not a conventional taxi cab — but it comes cheap enough that you might not care.

The cab companies say they're unsafe, and such services are just an accident waiting to happen from a passenger safety level. Uber, meanwhile, says their drivers are all bonded and insured, and the campaign is just sour grapes from an industry they describe as a cartel.

The services have proven popular with riders. But drivers remain on the fence. As one told the CBC's Sophia Harris this week, "It's not fair competition because we have to follow the regulations [but] they don't."

Other stuff

Be sure to check out our website often for more business news, and remember to follow us on Twitter here.

Here's some more of our stuff that you found especially popular this week:

Monday

Tuesday

Wednesday

Thursday

Friday


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Canada-China currency deal expected to sharply increase trade

Canada and China have signed a reciprocal currency deal that's expected to dramatically boost exports.

The hub will foster far easier trade between the Canadian dollar and the Chinese yuan, also known as the renminbi. It makes Canada the first country in the Americas to have a deal to trade in the renminbi.

The signing of the deal was announced in Beijing today by Premier Li Keqiang and Prime Minister Stephen Harper, who is on his third official visit to China.

"It's a great boon for the Canadian business community, both importers and exporters, because they can now do business in China with the currency and not have to go through multiple financial exchange transactions," Stewart Beck, president and CEO of the Asia Pacific Foundation of Canada, told CBC News.

"So the pundits are saying it could double maybe even triple the level of Canadian trade between Canada and China," he said.

Authorized by China's central bank, the deal will allow direct business between the Canadian dollar and the Chinese yuan, cutting out the middle man — in most cases, the U.S. dollar.

China Canada

Prime Minister Stephen Harper, left, is shown the way by Chinese Premier Li Keqiang as they arrive for a welcome ceremony held at the Great Hall of the People in Beijing on Saturday. (Ng Han Guan/Associated Press)

Canadian exporters forced to use the American currency to do business in China are faced with higher currency exchange costs and longer waits to close deals.

"It's something the prime minister has been talking about. He wants Canadian companies, particularly small- and medium-sized businesses, doing more and more work in China, selling goods and services there," said CBC's Catherine Cullen, reporting from Beijing.

Jason Henderson, head of global banking for HSBC Canada, calls the deal great news for Canada, given that China is the second largest economy in the world after the U.S.

If Canada is to maintain the standard of living that it enjoys today, he adds, it needs to tap into the Chinese market. The currency deal is the first step on that path.

Earlier today, Canada and China also signed more than 20 commercial deals valued at more than $1 billion.

The Prime Minister's Office said in a statement the deals "are a testament to the significant growth taking place in the bilateral commercial relationship."

"Several sectors stand to benefit from these agreements, including sustainable technologies, aerospace, transportation, construction, mining, energy, infrastructure, agri-food, and information and communications technologies sectors," the statement said.

It said trade between Canada and China supports more than 470,000 jobs in Canada a year, which was about 2.67 per cent of total Canadian jobs in 2013.


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Stephen Poloz, the unintended champion for Canada's jobless youth: Don Pittis

The furor set off by Bank of Canada governor Stephen Poloz this week may be the best thing to happen for the youth jobs issue in ages.

For the few who didn't notice, the governor of our central bank put his foot in it the other day, telling young people they should work for free.

Canada's latest jobs data from Statistics Canada Friday morning showed some improvement in the jobless rate for youth, but unemployment among young people is still nearly double that of everyone else.

Poor Stephen. You get the feeling he's not quite as media savvy as, say, his immediate predecessor. He likely didn't know what he was getting himself into. 

The backlash was terrific, with his off-the-cuff remarks characterized by many as turning a blind eye to current employment standards. 

Youth at job board

Unemployment among young people has been nearly double that of other Canadians. (Shutterstock)

"Employers in the private sector can't employ interns and pay them zero dollars," said Claire Seaborn from the Canadian Interns Association on CBC's Radio's Metro Morning.

Although there is a patchwork of provincial rules, generally, she says, internships are restricted to those within a specific education program.

Otherwise, employers and unemployed people just aren't allowed to agree that work will be done for free.

Good intentions

"That would essentially be contracting out of the minimum wage," says Seaborn. "Interns can't agree to be paid $3 an hour or zero dollars an hour. It's simply against our employment standard."

Despite the way it played in Peoria, Poloz's intentions were good.

What he is, quite validly, worried about is something that has often been called "generation jobless." And it is phenomenon well-known to have a long-term effect on an entire economy.

Here's how it works.

Imagine you finish your degree in law or commerce during a boom. As you graduate, employers are anxious to snatch up the fresh talent, hiring you young and malleable.

Lucky you, you get on the professional job ladder early and work your way up.

But if instead you complete the exact same qualification during an economic downturn, sometimes even the best graduates go begging.

Poor you, you get part-time work in retail, or worse, can't find a job at all. Even when the boom returns, your educational skills are stale and you are at the back of the line. 

Policy problems

If they were my kids, I'd give them the same advice Poloz offered. But then, I am not a high government official. And my saying it does not make it sound like policy. 

There are two obvious problems with encouraging free work as policy. One is that that even the smartest poor kids can't afford to work for free.

Job search

Youth unemployment is crucial issue, and not just for the youth scouring the job ads for opportunities. (Shutterstock)

The other is that a supply of free workers completely destroys the motivation for employers to actually hire young people and pay them. In a profit-motivated world, lots of free workers make the youth unemployment problem even worse.

In the past, government youth hiring programs gave kids from all backgrounds a leg up. But the current urge by governments to slash the public service means the bottom rung of entry-level jobs is drying up.

Apart from waiting for the economy to kick back into gear, the private sector solution is not obvious. 

Government handouts for companies to hire young people are in danger of turning into just one more form of corporate welfare as profit-seeking employers hire the people they would have hired anyway, and simply pay them with taxpayers' money.

I've reported in the past on the shortage of startup cash for young entrepreneurs.

But there are things governments can do. Employers are not currently pulling their weight when it comes to training the next wave of young people. They want their new workers to arrive fully formed. They each want someone else to do the training.

What about pre-trainees?

One technique might be for governments to make a rule that every employer hire some percentage of their workers as pre-trainees at minimum wage.

It would have no effect on workers who have skills or experience that commanded higher wages. And while employers would pay the cost, all would benefit equally.

The Poloz solution will not do as public policy.

But by his comments, our chief central banker has given the issue of youth unemployment a much higher profile than if he had spoken in platitudes. And as we begin a federal election year, he has done it at a perfect time.

As Poloz and today's jobless numbers remind us, youth unemployment is crucial issue, and not just for youth.

We should make federal parties realize it is the economic issue of our times.


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Canadian dollar, stocks move higher on strong jobs report

The Canadian dollar gained almost three-quarters of a cent against the U.S. dollar as the greenback weakened and oil moved higher.

A strong Canadian jobs report showing the economy created 43,100 new positions in October also helped push both the loonie and stocks higher.

The dollar rose 0.72 of a cent to close at 88.24 cents US on the better-than-expected jobs numbers.

The S&P/TSX composite index jumped 127.45 points to close at 14,690.83.

Resource stocks moved higher as commodities strengthened. Oil was up $1, trading at $78.91 US a barrel in New York, off the low of less than $77 it hit earlier this week.

That gave bargain hunters the confidence to pick up oil companies which have been beaten down in the past six weeks as oil prices plunged.

"Value investors are starting to pick up oil companies and realizing that there is probably more upside at this price than there is downside," said Kevin Headland, director of the portfolio advisory group at Manulife Asset Management.

Despite Friday's gains, the benchmark TSX has not rebounded from the recent equity sell-off to hit record levels like its U.S. peers have.

"Canada has not bounced back as strongly. There's still a lot of pressure on oil," said Headland.

And further weakness is projected for the Canadian dollar. Nomura predicted it could fall to 84 cents US by the spring of 2015.

Bank of Canada governor Stephen Poloz has stopped giving forward guidance on interest rates and appears content to let the loonie fall in an effort to boost exports.

U.S. stocks and the U.S. dollar were mixed Friday, despite an employment report that showed 214,000 jobs created.

The Dow Jones industrial average climbed 19.46 points to 17,573.93, the Nasdaq declined 5.94 points to 4,632.53 and the S&P 500 index was up 0.71 of a point to 2,031.92.

Economists had predicted 235,000 U.S. jobs would be created and investors were disappointed that the momentum of growth did not match expectations. The U.S. jobless rate also fell, dropping to 5.8 from 5.9 per cent.

In other corporate developments, Bloomberg reported that Canadian Pacific Railway could be interested in going after Norfolk Southern, the second-largest railway in the eastern U.S. CP made a pitch to U.S. carrier CSX in October but talks didn't result in a deal.


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Here's looking at you: How facial recognition technology is creeping into daily life

Calgary police became the first force in Canada to start using facial recognition software to match suspects against a mug shot database this week, but it likely won't be the last.

The use of facial recognition technology is growing not just in law enforcement and security fields but also in commerce.

"One of the reasons face [recognition] is so popular is that face images exist of almost everybody," said Kevin Bowyer, an expert on biometrics and computer vision and chair of the department of computer science and engineering at the University of Notre Dame.

"You've got your driver's licence photos, you've got your identity badges wherever you work, so you've got this legacy of images that are easily accessible for everyone."

phone-face

Some cellphone apps use face recognition instead of passwords to give users access to devices. (Carlos Barria /Reuters)

Chances are you've already encountered some form of this technology. Government agencies that issue driver's licences use it to verify that you are who your licence says you are. Banks use it when investigating debit card fraud.

Smartphone apps like FaceCrypt and FastAccessAnywhere use it to grant you access to your mobile devices. Social media sites like Instagram and Facebook employ it when tagging photos. Google uses it in search and tagging functions and police in Dubai have even incorporated it into its Google Glass eyewear.

Matching faces not so simple

The algorithms used to match images of faces vary and are largely proprietary but generally employ computational methods to analyze the pixel values in images and identify patterns and correspondences.

mug shots-facial recognition

Matching images to mug shots can be problematic when using CCTV or security camera footage, which rarely provides clear, front-facing head shots. (Tony Gentile/Reuters)

A lot of progress has been made in facial detection and matching in the last decade thanks to the millions of dollars pumped into the field by the U.S. government — primarily the Defence Department — said James Wayman, a facial recognition expert who helped allocate that funding and is a research administrator at San Jose University

But facial recognition software can still be stymied by many factors: a person's pose, lighting, facial expressions, aging, image resolution and obstructions like hats or even hair.

"Identification is a very messy process. It's as messy for computers as it is for humans," said Kelly Gates, author of Our Biometric Future: Facial Recognition Technology and the Culture of Surveillance and an associate professor of communication and science studies at University of Illinois, Urbana-Champaign.

"People look like each other, people look different over time …​ people can look very different depending on the lighting conditions, depending on the day.…

'You can never establish certainties; you can only establish probabilities of matches.'- Kelly Gates, author of Our Biometric Future

"You can never establish certainties; you can only establish probabilities of matches." 

To make a good match, you need images where people are looking straight into the camera and have similar facial expressions — ideally, a smile and not the neutral expression we've all been told to adopt on IDs and passport photos in the post-9/11 era.

"That rule is born out of this idea that you don't want to match across expressions," Bowyer said. "It turns out it would be better if everybody smiled because your smile is more distinctive than your neutral [expression]."

CCTV images often not useful

Facial recognition is only as strong as the algorithms and image banks driving it. When the U.S. National Institute of Standards and Technology tested the six leading suppliers of facial recognition software in 2013, it found the best-performing among them (NEC, the provider Calgary police are using) failed to recognize the most likely match in a database of 1.6 million mug shots about four per cent of the time. The worst-performing software missed it about 20 per cent of the time. For webcam images, the failure rates were roughly 11 per cent and 67 per cent, respectively.

CCTV-face recognition

Security cameras are usually mounted high up to prevent them from being vandalized, but this doesn't make for good quality images, says facial recognition expert Jim Wayman. (Soeren Stache/Pool/Reuters)

​The biggest obstacle to accurately matching faces is image quality. Many of the agencies that use facial recognition rely on CCTV and security cameras, but these produce images that are grainy, low-resolution and taken from above.

"The worst-possible direction to put a camera to try to recognize somebody's face is up," said Wayman.

He says he doubts that casinos, for example, ever really use the facial recognition software that is supposed to help them keep out problem gamblers and spot card cheats and VIP customers because their cameras are generally on the ceiling.

FBI adopts face recognition

Facebook, on the other hand, is full of high-resolution, front-facing pictures of faces, which is why it's more than 250 billion uploaded photos are a veritable gold mine for law enforcement.

The FBI has said it won't store social network photos in the database of 52 million photos that will be part of its new face recognition system, but groups like the Electronic Frontier Foundation have raised concerns that "there are no legal or even written FBI policy restrictions in place to prevent this from occurring."

iris-scan-biometric

Iris scans are another biometric tool used to identify individuals. They are used to screen travellers at some airports and will be part of the FBI's new identification database. India is using them to build a massive national identification system. (Mike Blake/Reuters)

The FBI has said that by 2015, its database will include at least 4.3 million "civil images" — those taken for non-criminal purposes.

"This means you could become a suspect in a criminal case merely because you applied for a job that required you to submit a photo with your background check," the EFF warned in an analysis of the program.

The FBI's Next Generation Identification system will also include fingerprints, palm prints, iris scans and information such as ethnicity and immigration status and be shared across agencies and police departments.

Automated passport checks

Facial recognition technology is also becoming a familiar site at airports. Australia, New Zealand, the U.K. and Germany are among the countries that use automated airport customs gates outfitted with cameras that snap your picture and match it against your passport — and potentially a watch list.

border-kiosk

A Qantas Airways flight attendant places her passport on a scanner as her face is photographed at an automated border control kiosk at Sydney Airport. (Tim Wimborne/Reuters)

Canadian border authorities have so far limited their use of biometric tools to iris scans, which are used to verify the identities of those who use CanPass or Nexus IDs to travel between the U.S. and Canada. New passports are equipped with a digital facial image that can be used in face recognition systems, and Passport Canada does use the technology to check applicants' photos against its database.

But while facial recognition might be able to detect passport fraud, it likely won't help authorities pick a known terror suspect out of a crowd at a busy airport. 

"How often do terrorists whose picture you have and are looking for really walk through airports? Not very often. A thousand times an hour some poor chump like me walks through the airport … so you get thousands upon thousands of false positives," said Wayman, who advises Australian customs authorities on their SmartGate facial recognition system.

Selling you stuff to your face

Security-related uses of facial recognition are to be expected, says Bowyer, but it's the commercial applications that have really picked up in recent years.

Retailers like Reebok and Tesco have used cheap webcam based facial detection software to monitor how customers react to store displays or to show them age- or gender-specific ads in real time. (Unlike face recognition, face detection doesn't try to make a match but estimates a person's gender, age and facial expression based on what their face looks like and what the software already knows about faces of a certain age, sex or mood.)

Smart TVs enable cable, video game and marketing companies to gauge audience reaction using face detection while online dating site Match.com will find you a mate who looks like your ex with the help of facial recognition​.

There's even a smartphone app called SceneTap that uses cameras and facial detection to tell you if a club or bar is busy and what the average age and gender ratios of the patrons are.

All this raises concerns not just of privacy —  the Alberta privacy commissioner has already announced she will review the Calgary police's use of face recognition technology — but also of autonomy, says Gates.

"Facial recognition plugs into a larger set of practices and problems around predictive analytics and the ways in which all of our online and offline experiences are constantly being modulated using data science and data analytics," she said.


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Canada's jobless rate drops to lowest point since 2008

Written By Unknown on Jumat, 07 November 2014 | 22.39

The Canadian economy added 43,000 jobs in October, pushing the jobless rate down to its lowest level since November 2008.

Statistics Canada said Friday that Canada has now produced 182,000 jobs in the past year. But two-thirds of those jobs have come in the past two months.

The strong monthly figure is much better than what most economists had been expecting — a slight pullback after a strong September figure. Instead, it was the first time there have been back-to-back monthly gains since the end of 2012.

The loonie gained almost a cent on the news, trading back above the 88 cent level after the news came out.

"Throughout this year, we've been trapped in an oscillating pattern of gains one month only to be followed by losses the very next month," Scotiabank said in a research note ahead of the release of the data.

Provincially, employment rose in Ontario, Manitoba, Nova Scotia and Prince Edward Island, while it declined in New Brunswick. Everywhere else, it was basically flat.

Private-sector workers and the ranks of the self-employed swelled, while there was a slight decline in the number of public-sector workers, the data agency said.

There were job gains in manufacturing, where 33,200 more people found work during the month. The survey said the natural resources sector shed 22,200 jobs in October.

The strong monthly figure "suggests that the economy may have shifted into a higher gear," Capital Economics said in a research note. "Stronger job creation over the past six months indicates a marked improvement."

While the overall unemployment rate dropped to an almost six-year low, young workers are still disproportionately unemployed. The jobless rate for those aged 15-24 declined to 12.6 per cent because more young workers stopped looking. But the figure is still almost twice as high as overall jobless rate.


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Yelp, Google and UrbanSpoon easy targets for fake reviews

That online review may recommend a restaurant in glowing prose, but should you eat up every word? Maybe not.

A months-long investigation by CBC's Marketplace shows how easy it is for companies to deceive consumers online. It uncovered an entire industry designed to help businesses mislead consumers, bolstering companies' online reputations with fake reviews and testimonials.

A good online reputation can have a huge impact on a company's revenue. When researchers at the Harvard Business School analyzed restaurant reviews and revenue in Seattle, they found that a one-star increase on the popular review site Yelp meant a five to nine per cent increase in revenue for independent restaurants.

"Some data now show that a good majority of people in North America believe and trust online reviews more than they trust their friends' opinions," Jeff Hancock, a professor who researches online deception at Cornell University in Ithaca, NY, told Marketplace co-host Erica Johnson.

And as the public's reliance on review sites has increased, so has the market for bolstering businesses online reputations.

Jeff Hancock

"I think it's going to become increasingly a big problem as more and more these high-end services – lawyers, dentist, doctors – come online with the reviews," says Jeff Hancock, a professor and researcher at Cornell University in Ithaca, NY. (CBC)

"I think it's really amazing how easy it is to purchase deception now on the internet," Hancock says.

(Watch the investigation, Faking It, on Friday, Nov. 7 at 8 p.m. ET / 8:30 p.m. NT on CBC Television to find out how you can separate review fact from fiction. Join the conversation on Twitter using the hashtag #reviews.)

Faking out the fakers

As many as 15 per cent of online reviews are fake, according to a 2012 study by IT researcher firm Gartner.

For its investigation, Marketplace created a grilled cheese food truck business called "Cheezed Off!" to test how easy it is for a company to artificially boost its reputation online. Cheezed Off! has all the hallmarks of a legitimate online business: A professional website, promotional YouTube video and social media presence.

The company also has glowing online testimonials on popular review sites like Yelp, Google Plus and UrbanSpoon:

  • "Cheezed Off! has mastered the art of creating the perfect grilled cheese sandwich. I love comfort food and could not pass up an opportunity to try this nostalgic meal from a food truck while in downtown Toronto. I ordered the classic sandwich and my boyfriend ordered the Hellzaoppin sandwich. Both of these were made quickly and tasted absolutely delicious. This food truck knows their way around a grilled cheese," one reviewer writes.
  • "Just tried Cheezed Off! for the first time and I have to say that I was very pleased.  The bread had a very crispy, satisfying crunch, the presentation was very appealing and the taste was, in a word, yummy!," another reads.
Online reviews

Research published by the Harvard Business School in 2011 found that a one-star increase on the popular review site Yelp meant a five to nine per cent increase in revenue for independent restaurants. (CBC)

The problem? Cheezed Off! doesn't actually exist.

The fake Cheezed Off! food truck was a product of clever photography and PhotoShop; its online reputation was purchased from a variety of businesses designed to help companies deceive consumers.

The Marketplace  investigation was inspired by a sting set up by the New York state Attorney General that concluded last year. In that operation, investigators posed as a fake yogurt shop and targeted companies that offered to write fake reviews to make the business more appealing to customers. The sting resulted in $350,000 U.S. in fines against 19 companies for false advertising and deceptive business practices.

Industry of deception

A wide variety of internet marketing companies, online reputation firms and freelance reviewers supply fake testimonials to popular review websites for a price.

Marketplace paid as little as $5 for testimonials to be written about its fake business and posted on big review sites Google Plus, Yelp and UrbanSpoon.

While leading review sites say they try to crack down on the practice, only one site detected and removed the fake reviews that Marketplace paid to have posted.

Yelp, the popular review site with 67 million reviews, detected two of three fake reviews posted about the fictitious Marketplace company.

UrbanSpoon and Google did not detect or remove fake reviews posted about Cheezed Off!.

In a statement, Google wrote: "While we take down thousands of false entries each month, there is a small subset of bad apples out there.

"We take verification very seriously and have several processes in place to authenticate businesses and remove false reviews, including a link next to each review allowing users to help flag suspicious reviews for us."

Fake review problem growing

Hancock says that most of the reviews online are legitimate, but the problem with fake reviews will continue to grow.

"I think it's going to become increasingly a big problem as more and more these high-end services – lawyers, dentists, doctors – come online with the reviews," Hancock says.

"That's not just having a bad meal at a restaurant. That could affect your life in a big way."

His advice? If you're going online for advice, sample widely.

"One of the best pieces of advice is to look for lots of different reviews and lots of reviews," he says.

"Just like you would never just ask one person what they thought of something, you don't want to rely on one or two reviews. It's hard to fake hundreds and hundreds of reviews even though they're so cheap."


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'Why would you even take the risk?' Taxi drivers question UberX safety

Cab companies have channelled their anger about a new competitor into a national movement. Seven taxi operators in cities across Canada have launched an advertising campaign to discredit cheaper rideshare services — namely UberX — that threaten to drive them out of business.

The campaign will jump-start this Saturday with a plea to Canadians in the Globe and Mail and La Presse newspapers.

An open letter warns readers to "think" before they take the rideshare route and to be aware of "the risks of using an unregulated service. Is the car safe? Is the driver fully trained?"

The letter also applauds the safety, security and value of the regulated taxi industry where, it states, drivers have proper insurance and certification, and their cars meet all safety requirements.

"I wouldn't get into a plane knowing that there was an amateur pilot that was flying this. I wouldn't get into a train if it wasn't a regulated system … so why would you even take that risk and go into an unregulated vehicle?" asks Carolyn Bauer, spokeswoman for the newly formed Canadian Taxicab Companies group.

'Why would you even take that risk and go into an unregulated vehicle?'—Carolyn Bauer, Canadian Taxicab Companies group

In a news release, she states people using unregulated rideshare services are "literally risking life and limb."

The UberX factor

The campaign doesn't target UberX by name, but it's widely considered to be the biggest threat to Canada's taxi industry. The rideshare service, the latest incarnation by the U.S.-based taxi alternative company, Uber, already operates in Toronto and Ottawa, and just last week started its engines in Montreal.

UberX uses a smartphone app to connect passengers with drivers who are not licensed cabbies. Those drivers can escape the overhead and licensing costs of the established industry and offer lower fares.

But Uber says its service is safe and reliable. The company states that participating drivers must pass both stringent background and motor vehicle record checks, and that the company carries extra auto insurance on top of a driver's own coverage.

"In the absence of any regulation on ridesharing, we've been very diligent about making sure we have safety in place," said Ian Black, general manager with Uber Toronto.

But often when UberX drives into town, cab companies and many local politicians are quick to condemn the unregulated service; in Montreal, Mayor Denis Coderre declared it "illegal."

'We have to follow the regulations, they don't.'—Cabbie Vestas Absa Mwakyeledzi

Fears of UberX coming to Vancouver already have provincial politicians prepping for battle. It has also prompted the city's four taxi companies to file a lawsuit this week to try to block the service from setting up shop there. Uber fired back in a statement, calling the lawsuit "a prime example of the Vancouver taxi industry's singular goal: protecting its own cartel."

Taxi drivers are also on the offensive. Ottawa cabbie Vestas Absa Mwakyeledzi fears the encroaching competition will jeopardize his ability to support his family. "There's a lot of people that make a living at this [whose lives] are at stake and the company, Uber, is not really fair competition for us," he said.

Consumers will decide

But UberX fan and business professor Joshua Gans says that no matter what the critics charge, market forces will decide the service's fate. 

news-taxi-driver-110614_lead_media_image_1

Ottawa cabbie Vestas Absa Mwakyeledzi fears the encroaching competition will jeopardize his ability to support his family. (CBC)

"One big interest group, consumers, tends to like it. And if they become devotees of Uber or any other similar service, that's going to have some political weight," said Gans who teaches at Toronto's Rotman School of Management.

According to Uber, Canadians are already flocking to UberX, which, it says, typically costs 30 per cent less than a traditional taxi ride. The company said that since it launched the service this past September in Toronto, it has attracted tens of thousands of users in the city.

Gans tried UberX in the U.S. and said he felt safe thanks to its customer review system: "The thing that keeps a check on safety for Uber is they've got a very strict ratings system. Basically, I get to rate every driver. I don't get to do that with cabs."

But in its efforts to fight off the UberX factor, the Canadian Taxicab Companies group is soliciting customer comment. Its national campaign includes a new website, Taxitruths.ca, which encourages customers to provide feedback: "We want to serve the public. We serve it so wonderfully every day, but if there's things that we need to change, we'd love to hear from you so that we can make those changes," said Bauer.

She said the group also plans to launch a national app for Canadians to hail a taxi.

But Mwakyeledzi, the taxi driver, fears UberX will eventually win out, as long as the service has the key competitive advantage: lower prices owing to less overhead.

"It's not fair competition because we have to follow the regulations, they don't. And that's really the key point. We don't mind the competition, but let's be fair."


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Stephen Poloz, unintended champion of jobless youth: Don Pittis

The furor set off by Bank of Canada governor Stephen Poloz this week may be the best thing to happen for the youth jobs issue in ages.

For the few who didn't notice, the governor of our central bank put his foot in it the other day, telling young people they should work for free.

Canada's latest jobs data from Statistics Canada Friday morning showed some improvement in the jobless rate for youth, but unemployment among young people is still nearly double that of everyone else.

Poor Stephen. You get the feeling he's not quite as media savvy as, say, his immediate predecessor. He likely didn't know what he was getting himself into. 

The backlash was terrific, with his off-the-cuff remarks characterized by many as turning a blind eye to current employment standards. 

Youth at job board

Unemployment among young people has been nearly double that of other Canadians. (Shutterstock)

"Employers in the private sector can't employ interns and pay them zero dollars," said Claire Seaborn from the Canadian Interns Association on CBC's Radio's Metro Morning.

Although there is a patchwork of provincial rules, generally, she says, internships are restricted to those within a specific education program.

Otherwise, employers and unemployed people just aren't allowed to agree that work will be done for free.

Good intentions

"That would essentially be contracting out of the minimum wage," says Seaborn. "Interns can't agree to be paid $3 an hour or zero dollars an hour. It's simply against our employment standard."

Despite the way it played in Peoria, Poloz's intentions were good.

What he is, quite validly, worried about is something that has often been called "generation jobless." And it is phenomenon well-known to have a long-term effect on an entire economy.

Here's how it works.

Imagine you finish your degree in law or commerce during a boom. As you graduate, employers are anxious to snatch up the fresh talent, hiring you young and malleable.

Lucky you, you get on the professional job ladder early and work your way up.

But if instead you complete the exact same qualification during an economic downturn, sometimes even the best graduates go begging.

Poor you, you get part-time work in retail, or worse, can't find a job at all. Even when the boom returns, your educational skills are stale and you are at the back of the line. 

Policy problems

If they were my kids, I'd give them the same advice Poloz offered. But then, I am not a high government official. And my saying it does not make it sound like policy. 

There are two obvious problems with encouraging free work as policy. One is that that even the smartest poor kids can't afford to work for free.

Job search

Youth unemployment is crucial issue, and not just for the youth scouring the job ads for opportunities. (Shutterstock)

The other is that a supply of free workers completely destroys the motivation for employers to actually hire young people and pay them. In a profit-motivated world, lots of free workers make the youth unemployment problem even worse.

In the past, government youth hiring programs gave kids from all backgrounds a leg up. But the current urge by governments to slash the public service means the bottom rung of entry-level jobs is drying up.

Apart from waiting for the economy to kick back into gear, the private sector solution is not obvious. 

Government handouts for companies to hire young people are in danger of turning into just one more form of corporate welfare as profit-seeking employers hire the people they would have hired anyway, and simply pay them with taxpayers' money.

I've reported in the past on the shortage of startup cash for young entrepreneurs.

But there are things governments can do. Employers are not currently pulling their weight when it comes to training the next wave of young people. They want their new workers to arrive fully formed. They each want someone else to do the training.

What about pre-trainees?

One technique might be for governments to make a rule that every employer hire some percentage of their workers as pre-trainees at minimum wage.

It would have no effect on workers who have skills or experience that commanded higher wages. And while employers would pay the cost, all would benefit equally.

The Poloz solution will not do as public policy.

But by his comments, our chief central banker has given the issue of youth unemployment a much higher profile than if he had spoken in platitudes. And as we begin a federal election year, he has done it at a perfect time.

As Poloz and today's jobless numbers remind us, youth unemployment is crucial issue, and not just for youth.

We should make federal parties realize it is the economic issue of our times.


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Historic Detroit bankruptcy ruling today

The largest public bankruptcy in U.S. history is reaching a climax.

A judge set to decide Friday whether to approve Detroit's plan to emerge from Chapter 9 with buckets of debt emptied and $1.7 billion (all figures U.S.) pledged to improve the quality of life in the struggling city.

Judge Steven Rhodes promised to announce his decision early Friday afternoon in a downtown courtroom. His task: to declare whether the plan is fair to creditors and feasible for the years ahead, the key standard under bankruptcy law.

All major critics have been silenced, particularly two bond insurers who dropped their opposition in exchange for cash, real estate and long-term leases on some city assets. General retirees voted in favour of a 4.5-per-cent cut in pensions and the elimination of annual cost-of-living payments. Detroit also is shedding $7 billion in debt.

'We'll be on a little bit of a diet for a while'

"I think we've met all the conditions we need to meet, but he's the final voice," emergency manager Kevyn Orr said of the judge.

Orr, who ran Detroit for 18 months until late September, took the city into bankruptcy with Michigan Gov. Rick Snyder's blessing in 2013.

"No one has said it's not feasible. No one has said it will not provide adequate services," Orr said of the bankruptcy exit plan. "Everybody said, `It's skinny, so we'll be on a little bit of a diet for a while.' That's OK."

Quick decision

With Rhodes' decision, the case could be concluded in just under 16 months, lightning speed by bankruptcy standards. That was largely due to the series of deals between Detroit and creditors, especially retirees who agreed to accept the smaller pensions after Rhodes last year said they had no protection under the Michigan Constitution.

The most unusual feature is an $816 million pot of money funded by the state, foundations, philanthropists and The Detroit Institute of Arts. The money would patch holes in pension funds, prevent even deeper cuts to retirees and avert the sale of city-owned art at the world-class museum.

It took more than two years for a smaller city, Stockton, California, to get out of bankruptcy. San Bernardino, a California city even smaller than Stockton, still is operating under Chapter 9 protection more than two years after filing.

"Chapter 9 is an open book. It's not going to look the same from case to case," said Melissa Jacoby, who teaches bankruptcy law at the University of North Carolina at Chapel Hill law school. "One shouldn't look at Detroit and say, `We're going to do exactly that.' That would be very difficult to do."

She noted the "high level" of involvement by the governor and Legislature in the Detroit bankruptcy as well as federal judges who acted as mediators to broker settlements between the city and creditors.


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SNC-Lavalin to axe 4,000 jobs

Written By Unknown on Kamis, 06 November 2014 | 22.40

SNC Lavalin 20130517

SNC-Lavalin plans to lay off about 4,000 people in the next year and a half as part of a major cost-cutting move. (The Canadian Press)

Montreal engineering conglomerate SNC-Lavalin says it will cut 4,000 jobs over the next 18 months in an attempt to streamline operations and save $200 million.

"SNC-Lavalin plans to scale back certain underperforming activities and adjust, consolidate and streamline some of its operations and corporate structure to improve efficiency, effectiveness and competitive positioning," the company said in a statement.

Part of that will be the loss of about 4,000 jobs, three-quarters of which will be from outside Canada, the company said.

SNC-Lavalin has offices in more than 50 countries and about 45,000 employees worldwide, so the cuts represent about nine per cent of their total workforce.

The cuts come as the company is working to repair the damage to its reputation after it was revealed the company had made some illegal payments in some countries to secure work. A number of ex-employees have seen jail time.

The job cuts were also announced as part of the company's Thursday release of the latest quarterly results, which showed improvement from a weak three-month period last year.

SNC-Lavalin turned a profit of $69 million, or 45 cents per share, as investments in major infrastructure businesses and a reduced loss from engineering and construction activities.

The quarterly profit compared with a loss of $72.5 million, or 48 cents a share, in the comparable period a year ago.


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Republicans pledge vote soon on Keystone XL

The Republican takeover of the U.S. Senate on Tuesday lays the groundwork for a more favourable attitude toward pipelines, with North Dakota Senator John Hoeven pledging legislation in the first quarter to push ahead the TransCanada Corp. project.

It also could set the stage for more measures to tackle the U.S. deficit, cutbacks in the Affordable Care Act and policies that weaken labour laws.

Hoeven, a former governor of North Dakota, said he sees a "good chance" of working with the president toward Keystone approval, but is willing to attach approval to other "must-pass" energy legislation to get it through the White House.

'It is time to break the gridlock on Keystone and move forward.'- TransCanada CEO Russ Girling

The Keystone XL pipeline, which would take oil from Alberta's oilsands to the Gulf Coast for refining, has been stalled for six years awaiting U.S. approval. That could be good for TransCanada, which yesterday said the cost of the pipeline keeps rising and now stands at $8 billion.

TransCanada CEO Russ Girling signalled his approval of Hoeven's remarks in a statement released Tuesday morning. "After six years, it is time to break the gridlock on Keystone and move forward," he said.

Girling said there is cross-partisan support for the project, which he said would employ 42,000 Americans, invest $2 billion in wages across the United States and injects $3.4 billion into the U.S. economy.

But Keystone isn't the only pipeline at stake – Encana and Enbridge and several U.S. companies also are working on U.S. pipeline projects that could help both Bakken shale oil and oilsands oil get to market.

Chris Sands, a senior fellow at the Hudson Institute in Washington, said pipelines have been waiting on a political shift that seems to have happened. 

None of those headed for the presidency in two years are likely to block it, he told CBC News.

"Most of the leading Democratic contenders are comfortable with the Keystone pipeline, I think all of the Republican potential contenders are," he said,

Even in Nebraska, where a legal case against Keystone has slowed its approval, a legislator who was working to stop the pipeline lost to a supporter of the pipeline.

"Even in Nebraska, the signals are good for the pipeline to move forward," Sands  said.

Greg Stringham, vice president with the Canadian Association of Petroleum Producers, points out that Keystone still needs a presidential permit.  The Republicans need more than 66 votes to override Obama's veto, and they don't have that many seats.

"It still remains his decision. Control of the Senate does not make it veto proof. You need to have 67 votes for that. And perhaps there are some Democrats on that side that would get it close to that, but really control just means it will be on the agenda more often," Stringham said.

Good for stocks

Midterm elections have historically been good for the stock market, no matter who gets elected. A recent study found markets usually record a low just before the vote and move upwards in the six months after the midterm.

Stocks already are higher today, partly on the euphoria of the Republican win. The Dow closed up 100 points at 17, 483.83, the S&P 500 up 11 points to 2,023 and Canada's TSX closing up 157.87 or 1.1 per cent at 14,548.26 in afternoon trading.

The generally pro-business stance of the party is expected to play out in a good climate for energy production and transportation. The party would support efforts to move toward North American energy self-sufficiency, if only to break the Middle East's stranglehold on U.S. energy prices.  

Republicans also aren't as worried about climate change or the support of environmentalists as Obama.

Senate Texas

U.S. Sen. Ted Cruz of Texas takes the stage to speak at a Republican victory party Nov. 4. He wants his party to do all it can to block Obamacare. (Associated Press)

The U.S. energy industry hopes for a reform of export laws in place for 30 years to allow unrefined crude to be exported outside of North America. That's a stickier file and there is no guarantee the Republicans would support it.

Nor is it a slam-dunk that Republican support free trade and would remove barriers such as the Buy America policy and the COOL meat-labelling laws, to name two irritants to trade with Canada.

But it would be well-regarded by the business community if Republicans could advance a reform of the tax code, with high corporate taxes driving tax inversions that see American corporations move offshore.

The opposition to Obamacare may play out in a lift of the tax on medical devices, which could help the healthcare sector.

Deadlock over budgets a risk

Tea Party Texas Senator Ted Cruz said this week that Republicans should "pursue every means possible to repeal Obamacare," a move that could mean huge disruptions for health insurers in the program.

It is also possible that an emboldened Republican Party will attempt to force more budget cuts in attempt to slay the U.S. deficit.

If the 2011 tactic of blocking necessary government and spending in a battle over the debt ceiling is repeated, it could hurt equity markets and cut into U.S. growth.

"Republicans who want to make a run for control of the executive branch in 2016 will likely strike a tone of compromise," said analyst Brian Jacobsen, but there is a risk "those on the fringe will likely look to turn the showdown into a shutdown."


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Federal pension board used offshore 'scheme' to skirt foreign taxes

The federal agency that invests civil servants' pensions set up a complex scheme of European shell companies and exploited loopholes that helped it avoid paying foreign taxes — a move that could undermine Canada's standing internationally as its allies try to mount a crackdown on corporate tax avoidance.

The arrangement involved two dozen entities, half of them based in the financial secrecy haven of Luxembourg, and all of them set up in order to invest money in real estate in Berlin by a Crown corporation called the Public Sector Pension Investment Board.

The blueprint for the tax-avoidance plan was obtained by the Washington-based International Consortium of Investigative Journalists and shared with CBC News as part of a larger leak of records exposing hundreds of corporate offshore schemes set up to capitalize on advantageous tax and secrecy rules in Luxembourg.

German tax official Juergen Kentenich

Juergen Kentenich, director of the regional tax office in Trier, Germany, said the pension board's tax dealings amounted to 'a very aggressive way to avoid taxes.' (Harvey Cashore/CBC)

Some of those leaked documents were first reported on in 2012 by Edouard Perrin for France 2 public television and by the BBC, but most of them have never before been analyzed by reporters.

While the Canadian government corporation's transactions were not illegal, a senior German tax official who reviewed them said the pension investment board had used "a very aggressive way to avoid taxes."

"The only goal is to avoid taxes," Juergen Kentenich, director of the regional tax office in Trier, Germany, said of the tangle of Luxembourg companies.

The loopholes that were exploited were legal, he says. "But is this fair? Should a reputable and decent businessman do something like that? That's another question."

Hundreds of millions in European real estate

The pension board invests the pension funds of federal civil servants, RCMP officers and members of the Canadian Forces, and has its directors appointed by the federal government with some input from public servants.

According to its website, it had $94 billion in assets under management as of March 31.

Berlin apartments owned by Canadian civil servant pension plan

The pension board bought these Berlin apartments, and many others, through a complex web of companies based in Luxembourg. (Harvey Cashore/CBC)

Between 2008 and 2013, hundreds of millions of that was held in real estate in Germany, though the leaked records also lead to assets in France, Spain, Norway, the Netherlands, Britain and Belgium.

The documents — which consist of a tax plan devised for the pension board by global accounting firm PricewaterhouseCoopers — show that the pension fund acquired 69 mixed residential and commercial buildings, totalling nearly 4,500 suites and units, in Berlin in 2008.

CBC News has learned the buildings were acquired for close to $390 million. But as a result of the way the transaction was structured, the pension investment board would have avoided paying $20 million in German taxes.

The purchase exploited a loophole in Germany's land transfer tax, which is normally levied on any entity that acquires 95 per cent or more of the shares of a real-estate holding company.

PricewaterhouseCoopers Luxembourg offices

The blueprint for the pension board's tax strategy was drawn up at the Luxembourg offices of PricewaterhouseCoopers. (Harvey Cashore/CBC)

Instead, the pension board bought a direct 94.4 per cent interest in a number of Luxembourg-based property holding companies, and then obtained an indirect interest by taking a large majority position in entities that held the remaining 5.6 per cent.

The board thus obtained a 96.4 per cent overall stake in the Berlin buildings, but the German loophole meant the indirect holdings weren't counted toward the real-estate transfer tax — so it didn't pay any.

PricewaterhouseCoopers's own experts refer to this kind of set-up as a tax "avoidance scheme," though the firm said in a statement that it rejects "any suggestion that there is anything improper" about its work.

Germany closed the loophole last year.  

'No issue was raised'

Pension board vice-president Mark Boutet acknowledged in an email to CBC News on Tuesday that the board's Berlin investments used the arrangement, but said it was "communicated to the German tax authorities and no issue was raised in that regard."

"Before German legislators changed the law, this approach was used by other investors and was consistent with German case law," Boutet wrote. "We respectfully disagree with your characterization of our actions as 'aggressive tax avoidance.' "

Send us tips

If you have more information on this or any other story, email us at investigations@cbc.ca. 

The board also avoided paying almost any tax in Luxembourg, because it used a complex system of cascading loans between the different companies it owns. (As a pension plan, it is tax-exempt in Canada.)

And Boutet acknowledged that by acquiring and then selling some of the Berlin real estate using non-German corporations, the pension board saved some money on German capital gains taxes. But he said it was minimal.

"The capital gain tax on the sale of a German company holding German real estate is less than one per cent," he wrote in an email. "No significant tax advantage resulted from [using] Luxembourg companies."

'Hypocrisy'

CBC reporters tracked those companies to an address in Luxembourg, where two staff rent desks in a shared office and oversee $700 million in civil servants' pension assets.

The revelations come as the Canadian government asserts it is fighting the very kinds of complicated, abusive tax practices that see multinational corporations route their profits through letterbox companies in tax-friendly jurisdictions. Just on Monday, Revenue Minister Kerry-Lynne Findlay told the House of Commons: "One of our government's key areas of concern is the issue of international tax evasion and aggressive tax avoidance."

Luxembourg rent-a-desk office

CBC reporters tracked the pension plan's maze of companies to this address in Luxembourg, where two staff rent desks in a shared office and oversee $700 million in civil servants' pension assets. (CBC)

Finance Minister Joe Oliver and his predecessor, Jim Flaherty, made similar declarations in recent years, as they touted measures to let the Canada Revenue Agency go after more tax from money held and moved offshore.

Canada has also pledged to crack down on international tax wizardry as part of wider efforts on this front by the Paris-based Organization for Economic Co-operation and Development and by the G20. Canada is a member of both groups.

"I think this is hypocritical," German opposition MP Gerhard Schick said of the Canadian pension board's tax planning. "Our governments should work for better rules, but they should also, in the companies they control, make sure that they are not part of the problem and avoid taxes as aggressively as private investors do."

Dalhousie University tax law professor Geoffrey Loomer agreed, saying the pension board's explanation that it follows all applicable tax laws is "the completely standard response given by the likes of Apple, Google, General Electric, Amazon, every multinational pharma corporation, every multinational financial institution."

"I have a problem with the hypocrisy of a government entity engaging in tax avoidance," Loomer said, "while the CRA, OECD and G20 are routinely criticizing 'aggressive tax planning.' " 

If you have more information on this or any other story, email us at investigations@cbc.ca.


Secret tax plan censored

The Public Sector Pension Investment Board's Luxembourg holdings came to light in a large document leak. Separately, CBC applied under access to information legislation to get the same documents directly from the pension board. The files that were released came heavily redacted. See a comparison of the redacted version with the original: 

(On mobile? See the document-reveal animation here)

PSPIB Luxembourg Tax Plan (PDF)
PSPIB Luxembourg Tax Plan (Text)


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Faking it: 4 ways companies can deceive you online

Trying a new sushi spot or booking into a hotel? Do you check online before you check it out?

Millions of consumers look at online references to followers, likes and shares to try to determine if a business is popular and legitimate before deciding to spend their money there.

But how much can you trust a company's online reputation?

Jeff Hancock

Cornell University professor Jeff Hancock says 'it's really amazing how easy it is to purchase deception now on the internet.' (CBC)

CBC's Marketplace investigated how companies artificially inflate their online credibility through paid testimonials and fake reviews.

Marketplace set up a fake business to test how easy it is to buy a good reputation online. The Marketplace investigation, "Faking It," airs Nov. 7 at 8 p.m. (8:30 p.m. NT) on CBC Television.

"I think it's really amazing how easy it is to purchase deception now on the internet," says Jeff Hancock, a professor who researches online language and behaviour at Cornell University in Ithaca, N.Y.

"You can get fake likes, you can get fake comments, fake reviews, fake everything."

So why do we fall for companies' fake reviews and false reputation?

"We believe other people," Hancock told Marketplace co-host Erica Johnson. "It's actually the foundation of how, I think, language and society work."

For some companies looking to look good online, there are lots of ways they can try to boost their business. Here are four ways that companies can fake it online.

Fake reviews

Research published by the Harvard Business School in 2011 found that a one-star increase on the popular review site Yelp meant a five to nine per cent increase in revenue for independent restaurants.

"If you're an owner of property that gets reviewed — and there is hardly anything that isn't reviewed now — there is real pressure to have good online reviews because if you don't, your business is gonna be hurt," says Hancock.

A 2012 study from IT research analysts Gartner found that 10 to 15 per cent of reviews on social media are fake.

'We take verification very seriously and have several processes in place to authenticate businesses and remove false reviews.'- Google

Last year, New York state cracked down on fake reviews, setting up a fake business and buying fake reviews in a sting operation dubbed Operation Clean Turf. It fined 19 businesses a total of $350,000 US.

"Consumers rely on reviews from their peers to make daily purchasing decisions on anything from food and clothing to recreation and sightseeing," New York attorney general Eric Schneiderman wrote in a news release, describing the practice as false advertising.

Some internet marketing and online reputation management companies bolster a business's online image with fake testimonials on a variety of popular review websites for a price.

Other websites connect businesses with freelancers who post fake reviews. Marketplace paid as little as $5 for testimonials about its fake business.

Review sites like Yelp and Google say they do what they can to delete fake reviews.

In a statement to Marketplace, Google said that the company takes down thousands of suspicious reviews down every month, but "there is a small subset of bad apples out there."

"We take verification very seriously and have several processes in place to authenticate businesses and remove false reviews, including a link next to each review allowing users to help flag suspicious reviews for us."

Fake YouTube views

With more than 100 hours of video uploaded to YouTube every minute, it can be hard for companies to compete for video views.

But Marketplace found it was easy to buy them, and inexpensive; the show bought 10,000 video views from a company for its video promoting its fake business. The cost? Thirty dollars.

Keyboard

Some websites connect businesses with freelancers who post fake reviews. Marketplace paid as little as $5 for testimonials about its fake business. (CBC)

In December 2012, YouTube stripped almost two billion fake views from music videos from major labels including Universal, Sony/BMG and RCA.

In February, Google, which owns YouTube, announced that it was increasing efforts to audit video views and remove fake views from the site.

Software engineer Philipp Pfeiffenberger wrote in a blog post: "When some bad actors try to game the system by artificially inflating view counts, they're not just misleading fans about the popularity of a video, they're undermining one of YouTube's most important and unique qualities."

Fake Twitter followers

Last year, Italian security researchers Andrea Stroppa and Carlo De Micheli researched fake Twitter followers. They estimated that four per cent — or 20 million — Twitter accounts were fake.

According to the researchers, fake Twitter accounts have become a multimillion-dollar business.

Smartphone

Millions of consumers check out online reviews to help decide the restaurants, shops and companies where they spend money. (CBC )

Research by internet security analysts at Barracuda Labs found that as of the end of 2013, there were 52 sellers on eBay selling fake Twitter followers, a number that more than doubled in roughly six months.

How much does a fake follower go for? Not a lot: the cost was an average of $11 per 1,000 followers.

Twitter's rules prohibit buying and selling fake followers.

"When you purchase followers, retweets and favourites, you are often purchasing bot (fake) or hacked accounts," the site reads.

"Any account caught participating in this behavior will be in violation of the Twitter rules and may be suspended."

Fake Facebook likes

Facebook is another platform popular for posers. The company estimates that as many as 1.2 per cent of accounts are fake, but with 1.2 billion active monthly users, that number represents as many as 14 million fake accounts.

Like many other sites, Facebook says it tries to crack down on fakers.

'We adapt our defences constantly to stay ahead of spammers' techniques.'- Matt Jones

"Fraudulent activity is bad for everyone — including page owners, advertisers, Facebook and people on our platform," wrote Facebook site integrity engineer Matt Jones in a blog post last month.

"We adapt our defences constantly to stay ahead of spammers' techniques, and one area we've focused on for several years is fake likes."

Hancock says that while some reviews are fake, many are honest and useful.

"Most businesses really want to provide a genuine service; most businesses are real," he says.

"The ones that do take the risk and they're desperate and buy some fake support, some fake reviews, some fake likes, this is not going to be a long-term business.

"It's going to damage the reputation in the long run. If I had one piece of advice, not for the consumers but for business owners, don't do it. It's too easy to get caught. One of the main things with deception on the internet: it leaves a record."


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