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Energy earnings: How bad will they get?

Written By Unknown on Sabtu, 31 Januari 2015 | 22.39

Suncor Energy

Suncor will report its fourth-quarter earnings on Feb. 5. (Agence France Presse)

Canadian Oil Sands surprised no one on Thursday when it reported sharply lower earnings and a massive cut to its dividend.

But as energy earnings season gets fully underway next week, the hope is that company's report won't be representative of the entire sector.

Canadian Oil Sands reported net income of $25 million, down 87 per cent from the same quarter a year ago. It cut its capital spending plans for 2015 and slashed its dividend by 86 per cent, to five cents a share, to conserve cash.

"Canadian Oil Sands is what you call a pure play," says Judith Dwarkin, director of energy research with ITG Investment Research in Calgary. The company's only asset is a nearly 37 per cent stake in Syncrude, which has been mining the oilsands since the 1970s. It's neither a diversified nor an integrated company, so there's no protection against volatility in the price of crude.

'How do you strategically position yourself to weather the storm?'— Nick Lupick, AltaCorp Capital

That's not the case for every oilsands player reporting in the coming weeks, but that doesn't mean we should expect good news.

"The general tenor is not going to vary a lot," says Dwarkin. "Capital cuts, trying to maintain the cash flow."

Suncor and Imperial

Imperial Oil and Suncor Energy report Feb. 2 and Feb 5, respectively. Both companies are fully integrated, meaning they extract the oil, refine it and sell gasoline, diesel, propane and petrochemicals. Refining margins have been under pressure in the U.S., but holding together in Canada, according to Nick Lupick, an energy analyst with AltaCorp Capital.

Lupick does not expect capital spending cuts from the two giants. There will naturally be less spending from Imperial because Kearl (oilsands mine) is in operation now." Lupick says that Suncor is not easily able cut back on its spending because development of its Fort Hill project is far enough along that it's difficult to turn back.

Cenovus and Husky

Cenovus and Husky report the following week on Feb 12. Both companies have oilsands operations that are steam-assisted instead of mined. Steam-assisted drilling operations tend to have break-even costs around the $50 US a barrel mark. The average price for West Texas Intermediate in the fourth quarter was $73.20 US.

That means the earnings pain is mostly deferred until the first-quarter numbers come out in the spring.

"That will dominate all the analyst calls next week," says Lupick. "How do you strategically position yourself to weather the storm."


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Greece, EU creditors in open dispute over debt demands

Greece and its European bailout creditors were in open dispute Friday, with Germany bluntly rejecting suggestions the heavily indebted country should be forgiven part of its rescue loans and warning against "blackmail" from Athens.

Greece's five-day-old radical left government insists it will honour pre-election promises to seek a cut on most of the country's rescue debt and scrap painful budget measures that were demanded in exchange for the loans.

German Finance Minister Wolfgang Schaeuble, however, warned Athens against strong-arm negotiating tactics in its effort to win debt relief. Rules need to be kept, and trust and reliability were the basis for further solidarity, the dpa news agency reported him saying.

"There's no arguing with us about this, and what's more we are difficult to blackmail," Schaeuble was quoted saying in Berlin.

"We are prepared to offer all co-operation and solidarity," he said, but only if Greece abides by its agreements, under which it received €240 billion ($270 billion US) in rescue loans.

Without the loans from its fellow eurozone countries and the International Monetary Fund, Greece would struggle to service its debts and avoid bankruptcy.

"The discussion about a debt cut or a debt conference is divorced from reality," Martin Jaeger, a German finance ministry spokesman, said in Berlin earlier.

Greece's Parliamentary Budget Office, which makes quarterly recommendations to lawmakers, warned that the country faces default unless a deal with creditors is reached soon. Greece's next government debt obligations are due in March.

Shares on the Athens Stock Exchange closed down 1.6 per cent Friday, capping total losses of 13 per cent for the week, while the interest rate on three-year bonds — a gauge of short term risk of default — rocketed to 19.3 per cent.

In Athens, Jeroen Dijsselbloem, the Dutchman who chairs eurozone finance ministers' meetings, met with top officials to sound out the new government.

Greece Bailout

Greece's Parliamentary Budget Office, which makes quarterly recommendations to lawmakers, warned that the country faces default unless a deal with creditors is reached soon. (Petros Giannakouris/Associated Press)

Dijsselbloem acknowledged Greeks have gone through much in recent years to reform their economy, and warned that rash actions by the government would not help.

"Taking unilateral steps or ignoring previous agreements is not the way forward," he told reporters in statements after his meeting with Finance Minister Yanis Varoufakis.

Prime Minister Alexis Tsipras's government, voted in last Sunday, has already said it will cancel several planned privatization projects and considerably scale down planned budget surpluses required to pay down Greece's massive national debt.

Tsipras will launch a small tour of other eurozone countries next week, flying to Cyprus, Italy and France on Monday, Tuesday and Wednesday, respectively.

Greece's bailout, which began in May 2010, runs out on Feb. 28 after an initial two-month extension was granted for completion of frozen negotiations with the so-called "troika" — the European Commission, European Central Bank and IMF.

Greece and the troika hold talks regularly to make sure Athens keeps up its reforms and qualifies for the next instalment of loans. Because the latest talks have yet to be concluded, Greece still has to receive the last, €7.2 billion-batch of its loans from the eurozone.

Dijsselbloem said the eurozone countries would decide before Feb. 28 what to do about financing Greece. He also rejected Greece's request to hold a conference to discuss restructuring its debt, saying the eurozone's monthly finance meetings would serve the purpose.

But Greek State Minister Nikos Pappas said Athens is no longer bound by the deadline.

"I think you will see in coming days that that deadline does not exist," he told private Mega TV, adding that Greece is aiming for "a political framework to reach a solution."

Varoufakis, for his part, said Greece was not asking for an extension of the existing bailout, as the government disputed the very wisdom of the program in the first place.

"Our intention is to — with an absolute will to co-operate — to persuade our partners ... that our common interest in Europe is served best by a new agreement that will emerge following talks between all Europeans," he said.

He said the new government would not be talking to the bailout negotiators from the troika.

Instead, the minister said, the government would co-operate with the "legitimate institutions of the European Union and the International Monetary Fund."

The new government has indicated that it is not interested in receiving the last €7.2 billion loan instalment from its European partners, and will instead focus on debt forgiveness.

Credit ratings agency Fitch said Friday that, in the short term, both sides have a "strong incentive" to reach an agreement to make sure Greece gets the rescue money from the bailout programs. It warned, however, that drawn-out negotiations pose a "high risk" to the country's fragile economy.


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Canadian dollar closes at 78.67 cents US

The Canadian dollar hit a six-year low Friday after a report showing Canada's GDP fell 0.2 per cent in November.

The loonie was trading at 78.67 US cents at the close of trading, down 0.53 of a cent from Thursday's close.

The currency had gone as low as 78.22 cents US, its lowest level since mid-March 2009, in morning trading.

Toronto stocks initially slumped, but the TSX closed up 36 points at 14,673 after oil strengthened.

Investors were concerned about the worsening economic picture emerging from Canada because of low oil prices.

Manufacturing and mining, quarrying, and oil and gas extraction all showed weakness in the October to November period, according to Statistics Canada.

The loonie is down nine per cent since the beginning of the year and three per cent this week alone.

But BMO chief economist Doug Porter says a falling dollar isn't all bad news.

"A falling currency does not necessarily equal economic doom," he said in a note to investors.

"True, the limping loonie is making southbound travel suddenly much more expensive, and will also put some serious upward pressure on core inflation. But, the currency also acts as a buffer against big changes in the price of Canada's exports, and it is responding about in line with the steep fall in oil, copper and iron ore." 

Many analysts are predicting future woe for the Canadian economy, with JP Morgan warning the Canadian dollar will fall to 77 cents if the Bank of Canada cuts rates again, as some economists have predicted.

"There will be blood," the Wall Street firm predicted, referring to the ripple effect of low oil prices on the economy.

It forecast a potential recession in Alberta with a recovering manufacturing sector in central Canada failing to offset the downturn there.

Oil was having a better day Friday, with the Brent crude contract in Europe closing above $52 US a barrel and West Texas Intermediate crude trading in New York at $47.52, up by $2.96.

Oil traders were spooked by violence in Iraq, where Islamic State militants had struck at Kurdish forces in the oil-producing region near Kirkuk.

Economic data out of the U.S. was disappointing, with fourth-quarter growth coming in at 2.6 per cent, lower than expected.

The Dow Jones industrial average is down 251 points or 1.4 per cent to 17,165.72. The Standard & Poor's 500 dropped 25 points to 1995 and the Nasdaq was off 48 points to 4,635.


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Tim Hortons job cuts, loonie's latest low & Coke's new recipe: BUSINESS WEEK WRAP

Tim Hortons was back in the news this week, first denying, and then admitting that it was laying off hundreds of head office workers. The news came as a shock to long-time workers, some of whom described to CBC the spectre of seeing colleagues unceremoniously shown the door after years of service.

Tims was recently bought by the company that owns Burger King, and the combined firm says it is living up to all of its commitments of that deal, which included maintaining and even increasing staffing levels over time.

But it was certainly a very bitter jolt of coffee for Tims' workers and many of our readers this week.

Loonie plunges — again

Tims wasn't the only Canadian icon down in the dumps this week. The Canadian dollar crashed below the 80-cent level on Wednesday and just kept going, flirting with 78 cents US as the week drew to a close.

The reason? Well, there's many, but a big one continues to be oil. The value of the loonie is closely tied to the price of oil, so just as it surged above $1.10 US when the world was worried oil was too expensive, so it plunged now that the main concern is how low oil can go.

Tim Hortons

Tim Hortons made headlines with news that the donut and coffee chain was laying off about 350 people from its corporate offices this week. (CBC)

The Bank of Canada move to cut rates was another blow, as that makes our dollar less attractive as an investment because lower rates tend to lower investment returns for savers.

And gloomy GDP numbers on Friday didn't help the loonie's case, pouring cold water on the notion that strength in other parts of the economy would be enough to offset weakness in energy. 

But one analyst told CBC this week the future isn't so bleak for the dollar. "What I think we're seeing with the Canadian dollar is more of a depreciation," ATB Financial economist Todd Hirsch said, "but not a free fall. It's not a really a fundamental problem with the Canadian economy."

DIY home buying

One industry that's had to stretch those dollars further in recent years is real estate. As home prices keep rising higher, consumers are getting pickier about the fees they have to pay. Two realtors, the buyer's and the seller's, typically pocket about five per cent of the price of any home sale. With the Canadian average over $400,000, that's $20,000. 

So websites have sprung up to help cost-conscious buyers hook up with realtors who are willing to give them a deal — something like one or two per cent on a home sale, as opposed to the standard 2.5.

It means a little more legwork, and one Toronto realtor warned us this week that consumers should be wary of what they're buying. "What are you giving up as a consumer by taking this service at a lower price?" Andrew Lafleur told the CBC's Aaron Saltzman this week. "I think the answer is that you're not going to get the best result at the end of the day."

Coke's recipe change

There was another shakeup in the news this week, as Coca-Cola announced it would be slightly altering the recipe for its eponymous soft drink.

Canadian Coke drinkers may not have known it, but the taste of Coke here contained more sweetness than it did in other places, because of higher sugar content. The new changes, which will be rolled out in the coming weeks, give the cola eight per cent less calories. A standard 355-ml can of Coke will have 9.7 teaspoons of sugar, instead of 10.5 teaspoons.

The size of containers is also getting a makeover, with a pint-size 591-ml bottle slimmed down to half a litre, a 500-ml bottle.

It's a response to consumer demand, the company says, because customers have been getting more health conscious. And Coke clearly wants to help them — while ensuring they can still drink as much Coke as they did before.

Will it work? Time will tell. But one McMaster University professor said he expects it's the start of a growing trend. " I think both Coke and Pepsi will be doing more about reducing sizes, giving people less soft drink, and looking at the sweetness level," we quoted Marvin Ryder as saying in our story this week.

Other stuff

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

In the meantime, here's a day by day list of some of our most-read stories of the week.

Monday

Tuesday

Wednesday

Thursday

Friday


 

...manager says 2) Don Pittis: currency wars... 3) CRTC - new rules on Super Bowl ads.....


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Germany's Merkel says she doesn't see another Greek debt cut

German Chancellor Angela Merkel has underlined the refusal of Greece's European creditors to consider forgiving part of the debt-ridden country's rescue loans, though she stressed in an interview published Saturday that Berlin's aim is to keep Greece in the eurozone.

Greece's new government insists it will honour pre-election promises to seek a cut on the country's rescue debt and scrap painful budget measures that were demanded in exchange for the loans.

Merkel said in an interview with the daily Berliner Morgenpost that Europe will continue showing solidarity with Greece and other nations hit by Europe's debt crisis "if these countries undertake their own reform and saving efforts," and fended off a question about the new Greek government's moves to reverse reforms and rehire suspended workers.

"We — Germany and the other European partners — will now wait and see what concept the new Greek government comes to us with," she was quoted as saying. She was clear, however, about prospects of a debt cut.

Athens already was forgiven billions of euros by private creditors, Merkel said. "I don't see a further debt haircut."

As for demands that have surfaced in Greece for Germany to pay more compensation for Nazi crimes during the Second World War, Merkel said that "this question doesn't arise."

Merkel said she wants Greece to be successful and acknowledged that "many people there have hard times behind them."

"The aim of our policies was and is for Greece to remain a part of the euro community permanently," she said.

Greece's left-wing Syriza party won last weekend's election promising to get half the country's debt written off.


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Supreme Court strikes down Saskatchewan law that prevents right to strike

Written By Unknown on Jumat, 30 Januari 2015 | 22.39

The Supreme Court of Canada has struck down as unconstitutional a Saskatchewan law that prevents public sector employees from striking.

By a 5-2 majority, the high court granted an appeal by the Saskatchewan Federation of Labour of the province's controversial essential services law that restricts who can strike.

The ruling will affect public service unions in provinces across the country. Last April, Nova Scotia enacted its own essential services law for health care workers, joining Newfoundland and Labrador and British Columbia as provinces that have essential services laws.

The Supreme Court also gave Saskatchewan one year to enact new legislation.

After winning power in 2007, the Saskatchewan Party introduced the new law, which says employers and unions must agree on which workers are deemed essential and cannot legally strike.

If the two sides can't agree, the government gets to decide who is an essential worker.

Writing for the majority, Justice Rosalie Abella said that power violated section 2(d) of the Charter of Rights and Freedoms, which protects freedom of association.

The two dissenting justices, Richard Wagner and Marshall Rothstein, said that enshrining the right to strike restricts the government's flexibility in labour relations.

The Saskatchewan law came after some high-profile labour unrest in Saskatchewan, including a strike by thousands of nurses in 1999 and another by highway workers and correctional officers in late 2006 and early 2007.

Court challenges began in 2008 after the law was enacted, and the Regina Court of Queen's Bench struck it down as unconstitutional in February 2012.

The court did uphold the principle of essential services and gave the government 12 months to fix the law.

The Saskatchewan Court of Appeal overturned the lower court ruling in 2013, so the labour federation appealed to the Supreme Court.

The Supreme Court has now reversed that appeal.

"Given the breadth of essential services that the employer is entitled to designate unilaterally without an independent review process, and the absence of an adequate, impartial and effective alternative mechanism for resolving collective bargaining impasses," wrote Abella, "there can be little doubt that the trial judge was right to conclude that the scheme was not minimally impairing."

Wagner and Rothstein disagreed.

"The statutory right to strike, along with other statutory protections for workers, reflects a complex balance struck by legislatures between the interests of employers, employees, and the public," they wrote in their dissent.

"Providing for a constitutional right to strike not only upsets this delicate balance, but also restricts legislatures by denying them the flexibility needed to ensure the balance of interests can be maintained."

Today's ruling comes after just two weeks after the Supreme Court's landmark labour relations ruling in a case involving rank and file officers of the RCMP.

The Supreme Court overturned a previous ruling of its own from the 1990s which upheld an exclusion that barred the Mounties from forming unions like federal public servants, who gained the right to collective bargaining in the late 1960s.

The ruling did not explicitly state that RCMP members have the right to form a union, but the justices effectively cleared a path to that possibility. As with today's ruling, the high court gave the federal government one year to create a new labour relations framework with the RCMP.

The RCMP ruling did not address the right to strike. 


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Layoff shock: How employers can soften the blow

After recent announcements that scores of employees would be laid off from Target Canada and Tim Hortons across the country, controversy boiled over how management made their decisions.

Target Canada's CEO severance package matched that of all 17,600 laid-off employees, and at Tim Hortons, a laid-off manager has said the abrupt layoffs there were "really shocking."

While such announcements can provoke anger among employees, management experts say companies can take a humane approach in the face of downsizing that hits employees hard.

"The No. 1 thing is to treat people with respect in the process. These are human beings that you're talking about," says Fraser Johnson, a professor at the Ivey Business School at Western University in London, Ont.

According to internal memos provided to CBC News, Tim Hortons management said it tried to do that.

"Our top priority throughout this process has been one thing — respect," read a memo to employees.

A corporate manager, who witnessed people filing out the door of the Oakville, Ont., head office, said that was hardly the case. Staff were told there would be "minimal" job cuts but then, by that manager's account, about 40 per cent of the office's workers were laid off.

' It's very shocking to know that you have no information up to a certain date and then suddenly your job is gone.'- Anil Verma

While the employees may have felt blindsided, a professor at the Rotman School of Management at the University of Toronto says that's common practice.

"Of course it comes as a very abrupt and rude shock. It's very shocking to know that you have no information up to a certain date and then suddenly your job is gone," says Anil Verma.

"It's kind of messy and what the employers want is that there's a clean break … a big bang moment at which everything happens and you are no longer part of the organization."

The Ivey School's Johnson says that abruptness is part of established management practice, which is to go through layoffs effectively and in as short a time as possible.

"What you don't want to do is have it drag on for a protracted period of time. Then you get people looking over their shoulders saying, 'Am I going to be next?' " says Johnson, who's also supply chain management chair at the Ivey Business School.

Warning bells

Some critics had sounded warning bells as Tim Hortons and Burger King worked towards their $12.5-billion merger. The deal is backed by Burger King owner 3G Capital, a Brazilian investment firm known for its ruthless cost-cutting.

Tim Hortons coffee

Some critics had sounded warning bells as Tim Hortons and Burger King worked towards their $12.5-billion merger. (Chris Young/Canadian Press)

But while initial cost-cutting announcements may be shocking, there are actions employers can take to soften the blow of a termination.

One is to provide retraining, especially for older workers.

An example is a 45-year-old worker steel worker who spent, let's say, 20 years with a company. It's very hard, says Verma, for the worker to have the up-to-date skill sets that today's broader job market requires.

However, he says there is a "very small number of cases" where companies would actually provide or pay for retraining for their employees.

"It's typically the responsibility of the individual," he said, but noted that there are federally funded retraining programs for displaced employees.

Career counselling

The employer could also pay for outplacement agencies to step in and assist workers with retraining, as well as provide career and financial counselling services, added the Ivey School's Johnson.

"You can walk someone out to the door and give them a cheque, but if they don't have the tools and the skills and the capabilities to look for a job, then I think you're creating a problem for individuals involved," he said.

Johnson says another way for employers to treat the individuals with respect is by giving them a competitive financial package "so that they don't have to spend a lot of time with lawyers to try to negotiate a better deal with companies."

In reality though, laid-off employees may not always get a fair shake, according to an employment law expert.

Lawyer Daniel Lublin says that a lot of packages are usually at the bottom of the reasonable range or even slightly below.

"In other words, it's not a total rip-off but it's not a really fair deal either," says Lublin, a partner at employment law firm Whitten & Lublin in Toronto.

"If you get a severance package, you have to understand that what you're being offered is what the employer thinks you'll agree to, not necessarily what you're entitled to," he says, adding that most people can't be harmed by negotiating for more.

Lublin says severance packages should be in writing, especially in situations of downsizing and mass layoffs, and that workers should be given "some time" to consider the package. If an employer asks you to sign on the spot, don't. That's duress, Lublin says.

The right to sue

Verma says it's been established that severance pay reflects how long a person has been working at the company and how difficult it is to find the next job. The Canadian norm for longtime employees, he says, is about two to three weeks of pay for each year of employment.

And if you, the employee, don't like what happens during a negotiation, says Lublin, you have the right to sue.

Lublin also commonly informs his clients that provincial and federal legislation gives people a minimum amount of severance that they're entitled to unconditionally.

"There's a government-prescribed payment that you're entitled to and that should cover you for the immediate future after your termination," he says.

"You're being paid right now to look for another job so it could be worse," Lublin says. "In other countries, you don't get paid severance — at least not this much."


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Canada's economy shrank 0.2% in November

Welder jobs

Canada's economy shrank in November, and has only expanded by 1.9 per cent over the past 12 months as a whole. (Matt Rourke/Associated Press)

Canada's gross domestic product contracted by 0.2 per cent in November, as the economy was dragged down by cheap oil prices and unexpected weakness in manufacturing and mining.

Statistics Canada said Friday that for the 12-month period ending November as a whole, the economy expanded by 1.9 per cent — less than the 2.1 per cent that economists had been expecting.

It's also far less than the 2.6 per cent annual pace the U.S. economy is expanding at, according to a separate set of data released out of Washington on Friday.

The loonie, which has been on a slow decline since the fall of 2014, lost another half-cent on the news, falling to 78.66 cents US within seconds of the data coming out.

Statistics Canada says that during November, compared to October's level:

  • Manufacturing output declined by 1.9 per cent.
  • Mining was down by 2.5 per cent.
  • Oil and gas extraction shrank by 0.7 per cent.

BMO economist Doug Porter said he was expecting declines in those sectors, but the numbers proved to be worse than even he had feared.

"While we were looking for declines in both, the drops were more intense than anticipated," he said in a note to clients early Friday.

The utilities sector was a rare bright spot in November, expanding by 2.4 per cent as demand for both electricity and natural gas rose.

The weak reading for November casts some doubt that the economy will manage to show growth for the fourth quarter as a whole, which includes December's data.

After eking out a gain of 0.3 per cent in October and then shrinking in November, the data for the end of the year are unlikely to show growth because much of the factors that made November weak — namely the decline in oil prices — continued to the end of 2014 and beyond.

"The weaker-than-expected headline implies Canadian GDP is looking soft in Q4​," Scotiabank economists Derek Holt and Dov Ziegler said in a note to clients.

There's now a very real possibility that the economy will have shrunk for the quarter as a whole, for the first time in Canada since the end of 2009.

That won't be enough to start talking about the "R" word, however, as economists define a recession as two consecutive quarters of decline in GDP.


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Credit card users easily identified from 'anonymized' data

Credit card data isn't quite as anonymous as promised, a new study says.

Scientists showed they can identify you with more than 90 per cent accuracy by looking at just four purchases, three if the price is included — and this is after companies "anonymized" the transaction records, saying they wiped away names and other personal details. The study out of the Massachusetts Institute of Technology, published Thursday in the journal Science, examined three months of credit card records for 1.1 million people.

'We are showing that the privacy we are told that we have isn't real.'- Alex 'Sandy' Pentland, MIT

"We are showing that the privacy we are told that we have isn't real," study co-author Alex "Sandy" Pentland of MIT said in an email. His research found that adding just a glimmer of information about a person from an outside source was enough to identify him or her in the trove of financial transactions they studied.

Companies routinely strip away personal identifiers from credit card data when they share information with outsiders, saying the data is now safe because it is "anonymized." But the MIT researchers showed that anonymized isn't quite the same as anonymous.

Household Debt

Companies routinely strip away personal identifiers from credit card data when they share information with outsiders, saying the data is now safe because it is 'anonymized.' But the MIT researchers showed that anonymized isn't quite the same as anonymous. (Ryan Remiorz/The Canadian Press)

Drawing upon a sea of data in an unnamed developed country, the researchers pieced together available information to see how easily they could identify somebody. They looked at information from 10,000 shops, with each data piece time-stamped to calculate how many pieces of data it would take on average to find somebody, said study lead author Yves-Alexandre de Montjoye, also of MIT.

In this case the experts needed only four pieces, three if price is involved.

As an example, the researchers wrote about looking at data from September 23 and 24 and who went to a bakery one day and a restaurant the other. Searching through the data set, they found there could be only person who fits the bill — they called him Scott. The study said, "and we now know all of his other transactions, such as the fact that he went shopping for shoes and groceries on 23 September, and how much he spent."

Women easier to identify

It's easier to identify women, but the research couldn't explain why, de Montjoye said.

The study shows that when we think we have privacy when our data is collected, it's really just an "illusion," said Eugene Spafford, director of Purdue University's Center for Education and Research in Information Assurance and Security. Spafford, who wasn't part of the study, said it makes "one wonder what our expectation of privacy should be anymore."

Yves-Alexandre de Montjoye

It's easier to identify women, but the research couldn't explain why, said the study's lead author Yves-Alexandre de Montjoye. (Bryce Vickmark/MIT)

"It is not surprising to those of us who spend our time doing privacy research," said outside expert Lorrie Faith Cranor, director of the CyLab Usable Privacy and Security Laboratory at Carnegie Mellon University. "But I expect it would be surprising to most people, including companies who may be routinely releasing de-identified transaction data, thinking it is safe to do so."

Credit card companies and industry officials either declined comment or did not respond to requests for comment.

The once-obscure concept of metadata — or basic transactional information — grew mainstream in recent years following revelations by former National Security Agency contractor Edward Snowden. Those disclosures from once-top secret U.S. government documents revealed that the NSA was collecting the records of digital communications from millions of Americans not suspected of a crime.

Lucrative big data

The use of so-called "big data" has been a lucrative prospect for private companies aiming to cash in on the trove of personal information about their consumers. Retail purchases, online web browsing activity and a host of other digital breadcrumbs can provide firms with a wealth of data about you — which is then used in sophisticated advertising and marketing campaigns. And big data-mining was used extensively in the 2012 president election to win over voters or seek out prospective donors.

"While government surveillance has been getting a lot of press, and certainly the revelations warrant such scrutiny, a large number of corporations have been quietly expanding their use of data," said privacy consultant and author Rebecca Herold. Studies like this show "how metadata can be used to pinpoint specific individuals. This also raises the question of how such data would be used within insurance actuarial calculations, insurance claims and adjustments, loan and mortgage application considerations, divorce proceedings."


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U.S. economy finished 2014 with slower growth

The U.S. economy slowed in the final three months of 2014 as a big burst in consumer spending was offset by weakness in other areas.

The Commerce Department said Friday the overall economy grew at a 2.6 percent rate in the October-December period, down from sizzling gains of 4.6 percent in the second quarter and 5 percent in the third quarter.

Consumers did their part in the fourth quarter, pushing up spending by fastest rate in nearly nine years. But businesses investment, trade and government spending weakened.

2.4% growth for 2014 as a whole

For the year, the economy grew at a moderate rate of 2.4 per cent. But economists believe 2015 could be a breakout year for growth, with consumer spending boosted by strong employment gains and falling gas prices. Many expect growth above 3 per cent this year.

That would be a significant acceleration after a prolonged period of sub-par activity. Over the past five years since the recession ended in 2009, economic growth has averaged just 2.2 per cent, far below the kinds of gains normally seen after a deep recession.

The growth in 2014, as measured by the gross domestic product, came after a 2.2 per cent gain in 2013. Last year's overall gain was held back by a steep drop in activity in the first three months when severe winter storms sent the economy into reverse with GDP dropping at a 2.1 per cent rate in the first quarter. But after that setback, growth averaged 4.1 per cent over the next three quarters.

In the October-December period, consumer spending, which accounts for 70 per cent of economic activity, grew at 4.3 per cent rate, up from 3.2 per cent growth in the third quarter. It was the strongest gain for consumer spending since the first three months of 2006.

Business investment slowdown

But business investment on equipment shrank at a 1.9 per cent annual rate after big gains in the previous two quarters. Economists said part of that weakness likely reflected cutbacks in oil and gas drilling by energy companies trying to cope with the big drop in energy prices.

Government spending fell at a 2.2 per cent annual rate in the fourth quarter after a 4.4 per cent gain in the third quarter. The third quarter had been supported by a big rise in defense spending which was reversed in the fourth quarter.

Trade, which had contributed 0.8 percentage point to growth in the third quarter, reduced growth by a full percentage point in the fourth quarter. Business stockpiling added to GDP by 0.8 percentage point in the fourth quarter.

Even with the fourth quarter slowdown, the U.S. economy continues to outpace other big economies with Europe battling renewed weakness, Japan in a recession and even growth in China slowing. Many economists believe U.S. growth this year will be the strongest in at least a decade.

Last week, the International Monetary Fund cut its outlook for global growth over the next two years, warning that weakness in most major economies will trump lower oil prices. But the IMF increased its outlook for the U.S. economy, pegging growth this year at 3.6 per cent. If that forecast comes true, it would mark the fastest annual U.S. growth in over a decade, since the economy expanded 3.8 per cent in 2004.

That would mark a sharp acceleration after a string of sub-par years in which the economy grew on average by just 2.2 per cent. That weakness reflected the struggle the country faced in pulling out of the 2007-2009 Great Recession, the worst downturn since the 1930s.

Forecasters say the U.S. economy at long last has turned the corner with solid job growth and plunging gasoline prices combining to boost consumer spending, which accounts for two-thirds of economic output.

"It took us awhile to get here, but I think the economy is finally off and running," said Mark Zandi, chief economist at Moody's Analytics. "We are seeing a number of positive developments. Businesses are hiring aggressively and the big drop in gas prices means that people have more money to spend on other items."

Global oil prices have fallen by nearly 60 percent in just seven months with the nationwide average for gasoline now around $2 per gallon.

That decline translates into a savings for consumers of about $175 billion, Zandi said. "A big part of growth this year will be people spending their gas savings," he said.

The Federal Reserve on Wednesday took note of the better economic conditions while promising to remain "patient" in deciding when it is time to begin raising interest rates. A key Fed rate has been at a record low near zero for six years.

The central bank has leeway to be patient because the weaker global economy has helped push up the value of the dollar against other countries and gasoline prices are plunging. Both developments are helping to hold down inflation, which was already low.


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Facebook profit nears $700M as user base grows along with ad views

Written By Unknown on Kamis, 29 Januari 2015 | 22.39

Facebook Inc. on Wednesday reported fourth-quarter profit of $696 million as the social media company signed up more members who logged on to the site more often, and viewed more ads.

On a per-share basis, the Menlo Park, California-based company said it had profit of 25 cents. Earnings, adjusted for stock option expense and amortization costs, were 54 cents per share.

The results topped Wall Street expectations. The average estimate of analysts surveyed by Zacks Investment Research was for earnings of 49 cents per share.

The stronger finances were driven by a growing user base that's using the service more and more. Facebook says it had 890 million daily users every day, on average, in December, an increase of 18 per cent year-on-year. On Mobile, the growth was even stronger, up 34 per cent on the year to 745 million during the month.

And almost two thirds — 64 per cent — of the social network's almost 1.4 billion users come back to the site at least once a day.

And all those eyeballs are translating into more ad dollars for the company.

The social media company posted revenue of $3.85 billion in the period, also surpassing Street forecasts. Analysts expected $3.79 billion, according to Zacks. The ad figure is up 54 per cent compared to last year.

Facebook shares have declined nearly 2 per cent since the beginning of the year, while the Standard & Poor's 500 index has decreased nearly 3 per cent. In the final minutes of trading on Wednesday, shares hit $76.65, an increase of 39 per cent in the last 12 months.


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CRTC gives OK to U.S Super Bowl ads in Canada — starting in 2 years

Canada's broadcast regulator plans to ban Canadian specialty TV channels from blacking out U.S. Super Bowl ads in favour of Canadian ones, starting with the big game in early 2017.

The decision won't take effect in time for this Sunday's game in Phoenix between the New England Patriots and defending champion Seattle Seahawks, but it could be in place for next year if Bell Media — the rights holder for the 2016 event — waives its rights to switch ads.

In a speech to a London, Ont., business audience earlier Thursday, Canadian Radio-television and Telecommunications Commission chair Jean-Pierre Blais says the new rule will be officially in place for the Super Bowl that ends the 2016 NFL season, which will air in early 2017.

Under the decades-old current rules, Canadian television stations can take broadcast feeds for foreign events like the Super Bowl and then substitute in their own Canadian ads for the broadcast.

That process — known as simultaneous substitution, known as simsub — has been a consistent thorn in the side of Canadian TV viewers who want to see some of the high-production value ads that U.S media companies and advertisers come up with for those events.

"Viewers dislike it, particularly when it is exercised during major live broadcasts such as the Super Bowl or the Academy Awards," CRTC chair Jean-Pierre Blais said Thursday. "They tell the CRTC — and we receive many complaints — that they want to see the newest American commercials as and when they are broadcast. And they rightly resent the fact that simsub is often mistimed, causing viewers to miss, for example, key plays during a big game."

But simsub has also been lucrative for television stations, to the tune of $250 million a year to the industry as a whole. So the CRTC threw local affiliates a bone in making its decision on Thursday — local affiliates will still be allowed to simultaneously substitute advertising, but specialty channels (like Bell-owned TSN, which will show Sunday's game) will be banned from doing so.

"It's too intertwined to remove entirely without upsetting the existing business model," Blais said. "But that is not to say that the Commission is maintaining the status quo."

Thursday's move stops well short of stopping simsub altogether. So Canadian viewers of other U.S. broadcasts, such as CBS's The Big Bang Theory, will still see Canadian-focused ads wrapped around the American-produced show.

But for the Super Bowl, at least, the regulator made it clear that it will watch Canadian networks closely to ensure they're handling it appropriately.

"If, for example, a Canadian broadcaster cuts back to an NFL game late and causes viewers to miss a play, it could be forced to pay rebates to viewers for its mistake," Blais said.

Blais also announced that broadcasters will lose the ability to switch ads, along with mandatory carriage privileges on cable and satellite services, if they shut down transmitters that allow Canadians access to free, over-the-air TV signals.


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When Tim Hortons dropped the axe, employees were in shock

They didn't see it coming. That's what a laid-off Tim Hortons manager tells CBC News.

Instead, she says, just days before job cuts were announced, the company played down media speculation about mass layoffs and gave employees the impression they shouldn't worry.

So when Tim Hortons started doling out pink slips at its headquarters and regional offices across the country on Monday and Tuesday, she says, "it was really shocking."

"We all anticipated something happening. I don't think any of us assumed it was going to happen so fast. There was just no transition time and it was pretty much, these guys came in, your job is gone."

"It was just really sour, really ominous,"  continues Jane. "You could just see a steady flow of people being escorted from the building."

Jane is not her real name. She wants that withheld for fear she will face repercussions from the company if it discovers she's speaking out.

'It was just really sour, really ominous'- Jane, laid-off Tim Hortons manager

Holding it close

U.S.-based Burger King bought Tim Hortons last year. The company has remained tight-lipped about the layoffs, refusing to make public how many jobs were cut. Until the axe fell, more than 2,000 people worked at Tim Hortons corporate offices and distribution centres in Canada.

Jane estimates 40 per cent of staff may have been laid off from head office in Oakville, Ont. She had worked in middle management. In her department, she says 60 per cent of employees were cut. She also believes some other departments were entirely gutted.

Late yesterday an official in the office of Industry Minister James Moore told CBC News that Burger King had committed to cutting no more than 20 per cent of Tim Hortons corporate staff at its headquarters or regional offices. The official said that commitment was legally binding.

Don't worry about it

Jane says when Burger King took over, it gave no indication there would be big layoffs. Instead, she says the company told Tim Hortons head office staff, "'We're here for you guys. We're here to respect you as employees, empower you,' and pretty much tried to give us the impression that everything's going to be fine."

She admits staff were told there would be "minimal" job cuts but adds that the company also stated there would be "great opportunities" for other employees.

Jane learned about the looming cuts from the media. News reports this past Friday speculated about significant job losses at Tim Hortons offices. But then, she says the company downplayed the trouble ahead.

She showed CBC an email from Burger King head office, sent that Friday night shortly after 9 p.m. It stated that "Much of the information that was reported today [in the media]...is simply incorrect."

The email admits that "Yes, we will be changing our structure." But the letter also states that the company will treat employees respectfully.

It concludes by stating, "We have nothing to announce at this time, however we are committed to communicating with you as soon as we are in a position to do so."

Surprise! You've lost your job

Jane says the big layoffs that were announced the following Monday and Tuesday hardly showed respect for employees.

She explains that on Monday, some of the more senior vice-presidents were let go. She also says a team from an external outplacement agency arrived "to essentially perform all the dirty work."

She says the team set up shop in offices left vacant by the laid-off executives "and called us in one at a time, letting us know that this is your package, you're on your way out and we'll escort you to the door."

"It was just really poorly executed," says Jane, because employees got no adequate warning. "There was a lot of crying, just emotion running high in the office."

Sign of the times

While employees may be feeling blindsided by the news, it comes as no surprise to Carleton University business professor Ian Lee. "This goes on in almost every merger today."

He explains that when a big company takes over another, it identifies overlapping jobs and lays off people to cut the fat.

"So if you have a marketing department at Burger King and a marketing department at Tim Hortons, you look for anywhere you can get rid of people."

More than one side

Not everyone connected with the company sees the layoffs as bad news. Archibald Jollymore is a former Tim Hortons executive and franchise owner. His wife Anne still owns a Tim Hortons franchise in which he is actively involved.

About the layoffs, Jollymore says, "I'm certainly not surprised at them organizing or reorganizing and trying to streamline the company. That's totally understandable." He adds that the restructuring "could be a good thing."

He also doesn't fear the layoffs will hurt business. "If at the store level, the customer doesn't see a change, I don't think it's going to [have an] impact."

But for Jane, the cuts have permanently sullied her view of Tim Hortons. "I was proud to be part of a company that I thought was part of our culture and national identity."

"But then being part of it and being shown behind the curtains, that whole illusion got quickly swept away. It's just a corporation like any other corporation."


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Falling loonie part of a new race to the bottom

In the Cold War it was called nuclear escalation.

Each time one side upped its missile count, the other would up it more. Soon both sides were so bristling with missiles that the only possible strategy was mutually assured destruction, or MAD, which threatened to send much of Europe and North America back to the Stone Age.

Fortunately, a currency war does not have the same destructive capacity. But the principle of escalation is the same. And just as in the nuclear example, despite repeated talks to get it under control, new outbreaks of escalation keep happening.

In a currency war each round of escalation is the process of making your currency worth less. And in this war, Canada is a full participant. 

As economists repeatedly tell us, the falling loonie is bad for Canadians who want to travel abroad. It also makes life more expensive for people who want to buy foreign goods, from European cars to South Korean washing machines.

Boost to exports

China Rising Yuan

Central banks around the world, including China, have been cutting interest rates, pushing down the value of their currencies. (Associated Press)

But on the bright side, they tell us, it will be good for the Canadian economy.

Our products will become cheaper in foreign markets, boosting our industrial economy as we export more to the thriving U.S. economy.

And while working to encourage Canadians to holiday at home and shop at home, it will make people with higher currencies want to shop and travel in Canada.

Of course that only works if everyone else's currency stays high. And in currency wars that's not what happens.

The ruble is down by half. The euro has hit 11-year lows after countries using it began printing money. Japan has been printing money, too. Denmark has cut interest rates to keep the krone from surging against the falling euro.

India and China have cut. Yesterday, Singapore joined the pack, saying it was worried about deflation. 

We've seen it all before. I first noted it in 2009 when world leaders and bankers were all trying to talk down the value of their money. About a year later Brazil's finance minister officially complained, coining the term currency war. After each  new complaint, countries meet to try to hammer out friendly agreements to keep their currencies in balance.

One of the reasons thoughtful economists don't like currency wars is that manipulating your currency is a well accepted barrier to trade of the kind that seized up global commerce in the 1930s. Pushing your currency down has a similar effect to putting a restrictive tariff on imports. 

This means war

Since the Brazilian minister coined it, the term currency war has been adopted by an odd conspiracy theory that warns of inflation and a run on gold. But instead, as U.S. Fed Chair Janet Yellen said yesterday, she is more worried about deflation as the prices of U.S. imports fall.

This is only one example of how economic contagions spread across international borders. There are others. U.S. corporate results have not been as good as expected because when companies bring their profits home they are worth less in dollars. Companies are also worried about future sales as U.S. goods become more expensive. U.S. car makers will face stiffer competition from Japanese and European imports.

Much of the world, including Canada, has been counting on a strong U.S. recovery. But the United States can't buy everyone's exports if theirs collapse.

Oil effect

It is reasonable that currencies of countries like Canada and Russia that depend on oil exports will fall with the price of petroleum. That's the way currencies are supposed to work. But Canada has gone beyond that, cutting rates once and hinting it will cut again.

No central bank says it is cutting interest rates or printing money as a trade barrier. There is always another good reason. But the result may be that when everyone pushes their currency down it will force places with strong currencies to put up subtle trade barriers of their own.

And rather than helping the world economy, that would be a matter of mutually assured destruction.

CANADIAN DOLLAR CHART


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PotashCorp hikes dividend on improved outlook and higher profit

Potash Corporation of Saskatchewan Inc. says demand and prices for its fertilizer has been strong, resulting in a big jump in fourth-quarter profit and supporting the company's confidence in the year ahead.

The Saskatoon-based company's net income for the three months ended Dec. 31 was $407 milion, or 49 cents per share —up more than 75 per cent from the fourth quarter of 2013, which included $60 million in severance-related charges.

The fourth-quarter profit was ahead of analyst estimates compiled by Thomson Reuters, which called for 47 cents per share of net income and 46 cents per share after adjustments.

Profit for the full year in 2014 was $1.82 per share or $1.5 billion — at the high end of the company's guidance to investors but down from 2013.

Revenue was $1.9 billion in the fourth quarter and $7.1 billion for the 12 months ended Dec. 31, 2014, compared with $1.5 billion in the 2013 fourth quarter and $7.3 billion for the full year.

Net income in the fourth quarter of 2013 was $230 million or 26 cents per diluted share and profit for all of 2013 was $1.785 billion or $2.04 per share.

PotashCorp also said it will raise its dividend almost nine per cent — to 38 cents per share from 35 cents — starting with its next quarterly payout in May in a sign of the company's confidence in future cash flow and demand for its fertlizer products.

Besides potash, the company produces nitrogen and phosphate products also used to boost crop production.

"As we look ahead, we see a supportive market environment — most notably in potash," said Jochen Tilk, the company's president and chief executive officer.

It's estimating the first quarter's profit will be about the same in a range from 45 to 55 cents per share and that 2015 earnings will be higher than last year's at between $1.90 to $2.20 per common share.


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Waterloo's Kik messenger app surpasses 200M users

Written By Unknown on Rabu, 28 Januari 2015 | 22.39

The Waterloo, Ont.,-based messenger app Kik is making its mark in a clogged marketplace featuring giants like Facebook and Snapchat, surpassing 200 million registered users on Wednesday.

It's a major milestone for the company, founded in 2009 by a group of University of Waterloo students, who had fewer than 5 million registered users at the end of 2011.

'[I]t's friends that got them to Kik, and it's friends that keep them using Kik.'- Heather Galt, Kik

"We're really excited about it. It puts us in a category with few other Canadian companies. From that perspective it's pretty neat," said Heather Galt, head of marketing at the company.

In a Wednesday blog post, founder and CEO Ted Livingston bluntly writes, "The truth is, it doesn't really matter all that much," going on to say the company is more interested in knowing how long users are spending in the app.

"Some of our registered users are people who probably used the app one time," explained Galt in an interview with CBC News. "But what gets us excited about our engaged users is those people are coming back. They're having meaningful, impactful conversation with people they know or people they meet."

Kik says it's done research that shows U.S. Kik users spend an average of 35 minutes per session in the app, ahead of Facebook Messenger at 27 minutes and Snapchat at 21 minutes, but behind Facebook at 37 minutes.

These numbers were collected in an online survey commissioned by Kik and conducted by U.S.-based consulting firm Frank N. Magid Associates.

The firm surveyed 1,000 men and women between the ages of 14 to 25 between Nov. 12 and 17 last year. Participants all owned smartphones and had at least one of the following apps: Kik, Facebook/Facebook Messenger, Twitter, Instagram and Snapchat.

Galt said engaged users are driving the growth of the company.

"We do a lot of what we call user chats. So we engage with users who reach out to us and we actually learn a bit about them. So, why do you use Kik? What do you like to do outside of work or school? When you're hanging out with your friends where do you go, what do you do, what do you eat? What do you like to do in your leisure time?" said Galt.

"And one of the things we always learn from these conversations is it's friends that got them to Kik, and it's friends that keep them using Kik."

Kik's next milestone is improving the 35 minutes to 38 minutes – which would push it 1 minute ahead of the Facebook app.

"We're focusing on being the WeChat of the west," said Galt, referencing the hugely popular messaging app from China.

"What we're doing is focusing the company on three different areas. So one is chat, so bringing new and unique features and functionalities to our core chat experience. Second area of focus is our platform, so giving our partners and ourselves more robust features and functions…beyond that core chat. And the third area is around services, so overall giving our users more utility more experiences within the app and more reason to engage within it."


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Real estate fees getting knocked down by homebuyers going mostly solo

The role of realtors is changing, as Canadians are no longer relying on them to find the right homes.

High-tech real estate websites are now empowering consumers to shop for their dream homes on their own.

As the internet transforms their industry, where does the real estate agent fit in?

A new breed of realtors say they're often not needed until the home stretch. So they're offering clients a cut to their commission that can amount to a rebate of thousands of dollars.

It's a perk that's sometimes frowned upon in an industry that clings to tradition. Some agents say a rebate offer raises a red flag — a sign of a substandard realtor who can't drum up enough business.

Home buyers on the hunt

Eric Rouah likes to peruse the real estate site TheRedPin.com, where, for no cost, he can wander a virtual Toronto, searching for properties for sale. The investor owns multiple condos and is hunting for more.

He likes the fact the site lists pre-construction condo projects in intricate detail, something not offered on the standard Canadian Real Estate Association site realtor.ca.

"What kind of amenities do they have, any schools in the area, when's it going to be done, who's the builder? There's a lot of information," he says.

But Rouah has still hired a RedPin agent because he needs someone to seal the deal: "That's really what I think I'm sort of paying them for, facilitating that whole transaction aspect."

Cash back

When Rouah does buy a property, his agent will give him a rebate: 15 per cent of the agent's 2.5 per cent commission that's paid by the seller. Rouah says it's a fair deal considering the process is a "combined effort."

TheRedPin.com offers the 15 per cent rebate to all home buyers, acknowledging that many will do a share of the work themselves.

"Traditionally agents were the gatekeepers," says the company's co-founder Rokham Fard. He says when it came to finding out details about properties and neighbourhoods, "they had the key to the lock box."

But now, he points out, most Canadians start their own research online.

"They can filter through all the facts until they're ready to take the next steps, which is usually going to see the home." He adds, "They're obviously taking some of the burden off us."

Even more cash back

Real estate agent Dan Chan is offering an even bigger cut. The Toronto agent has just launched a new real estate business, CommissionMadeFair.com. He is offering homebuyers up to 80 per cent of his 2.5 per cent commission. 

Chan bases his rebate on how many homes his client visits. If he only has to show one property, his client will get 80 per cent of his commission. For every home showing after that, he reduces the cut to his commission. After 20 properties, adds the realtor, "I feel like I deserve the full commission."

Chan recently gave a client a $10,000 rebate because the first home they visited together turned out to be the one.

"I will work with a buyer at any stage of the process, but if you're further along, then it just makes my job easier," says Chan.

The rebate controversy

While home buyers may be keen on cash back, rebates have been met resistance from the traditional real estate industry. In the United States, 10 states currently ban the practice.

The list was once longer, but the U.S. Justice Department has won a handful of battles to repeal the ban in other states. The department argues on its website that "rebate bans artificially inflate the cost of real estate services" and "prohibit brokers from competing on price."

In Canada, any agent is free to give cash back. But some would never consider it. Toronto realtor Andrew la Fleur says an agent offering rebates is a warning sign you're not dealing with the cream of the crop.

"You're dealing with somebody who can't compete at the same level as a top producer," he says. "So what do they do? They say, 'Well, come to me and I'll give it to you for a lower price.'" He adds, "You're not going to get the best result at the end of the day in most cases."

Get used to it?

But Chan says he's not competing with traditional agents. Instead, he's offering an alternative service to a particular client: "Clients who are empowered to have made their own decisions about where they want to live."

And he says as technology advances and more real estate information becomes available online, it will be even more important for agents to offer cash incentives like rebates.

Fard with TheRedPin.com, agrees. "I don't think realtors will go away. That's sometimes a fear to some people. But I feel [their] role has to change."

He believes agents should focus on skills that will still be needed in the internet age: negotiating price and sealing the deal. "Will technology shine when it comes to negotiation? No it doesn't . [It's] something technology hasn't been able to replace."

At least not yet.


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Cenovus Energy makes $700-million cut to 2015 spending budget

CENOVUS ENERGY AGM 20130424

Brian Ferguson, president & CEO of Cenovus Energy, says the company will lower its 2015 capital budget to between $1.8 billion and $2 billion, which is about $700 million less than the previous estimate. ( Larry MacDougal/Canadian Press)

Cenovus Energy Inc. has lowered its 2015 capital budget to between $1.8 billion and $2 billion, which is about $700 million less than the previous estimate and more than 15 per cent below last year's spending levels.

It's also looking for ways to reduce annual operating and cost reductions by between $400 million and $500 million in the years ahead and expects to redeploy and reduce its workforce in the coming weeks.

The Calgary-based oil producer and refiner says it's taking the move to preserve cash in response to further erosion in global oil prices, which have fallen below US$50 a barrel from more than $100 a barrel last summer.

The company says it plans to reassign employees to core areas in coming weeks and begin reducing the size of its contract workforce, but didn't provide details on how many people will be affected.

Cenovus says it's suspending most of its conventional drilling program in southern Alberta and Saskatchewan but will continue projects at the Christina Lake and Foster Creek oilsands operations in northern Alberta.

Cenovus chief executive Brian Ferguson says he believes crude oil prices will rebound, but the timing is uncertain.

"As a result of the dramatic slowdown across the energy sector, we expect to see continued reductions in demand for labour, service and materials.

This should create potential opportunities for us to drive improvements in our cost structure," Ferguson said in a statement.


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Yahoo to spin off lucrative stake in Alibaba

Yahoo CEO Marissa Mayer is spinning off the internet company's prized stake in China's Alibaba Group in a bid to save taxes and pass the benefit of Alibaba's strength on to shareholders.

The breakup announced Tuesday will transfer ownership of 384 million shares of Alibaba stock, currently worth $39 billion US, into a new entity called SpinCo. Those holdings, part of an astute investment made nearly a decade ago, represent the main reason that Yahoo's stock has more than tripled since Mayer became CEO two-and-half years ago.

Investors viewed Yahoo as another way to own a piece of Alibaba, a rapidly growing e-commerce company that is expected to become even more successful during the next decade as more of China's population gains online access through smartphones and other devices.

As long as there was a link to Alibaba, it almost didn't matter that Yahoo's own digital services have been struggling to generate more revenue during the past six years, even as advertisers have been pouring more money into digital marketing.

With the Alibaba stake jettisoned by the end of the year, Mayer will be under greater pressure to prove she can rejuvenate one of the internet's oldest and best-known companies.

"The heat is on," Outsell Inc. analyst Randy Giusto said. "This (spinoff) exposes the fact that Yahoo still is not growing in key areas where it has been investing."

Yahoo performance lacklustre

Fresh evidence of the challenges facing Mayer emerged Tuesday with the release of Yahoo's fourth-quarter results. Earnings fell 52 per cent from last year while Yahoo's revenue dipped 1 per cent.

It marks the eighth time in Mayer's 10 quarters as Yahoo's CEO that the company's revenue has declined from the previous year.

Yahoo's problems largely stem from its inability to adapt to the declining use of banner ads as more people spent their free time gazing into the smaller screens of smartphones and tablets instead of desktop and laptop computers. Analysts credit Mayer for overhauling Yahoo's mobile apps and sharpening the focus on smartphones and tablets, but it still hasn't been enough.

After subtracting commissions, Yahoo's display ad revenue declined five per cent from the previous year in the fourth quarter.

Advertising tied to internet search results — a bright spot in recent quarters — barely budged from the previous year at $462 million in the fourth quarter.

Firefox deal

The fourth quarter included the start of a deal that makes Yahoo the default search engine on Firefox's web browser in the U.S. until late 2019. Yahoo replaced Google on Firefox, and Mayer told analysts Tuesday she hopes to do it again by persuading Apple Inc. to switch to Yahoo's search engine on its Safari browser for the iPhone and iPad.

"We are all here to return an iconic company to greatness," Mayer said of her vision for Yahoo.

Don't expect that to happen during the current quarter ending in March. After subtracting commissions, Yahoo predicted its first-quarter revenue will fall in the range of $1.02 billion to $1.06 billion — slightly below the company's performance at the same time last year.

The Alibaba spinoff will give Yahoo's current shareholders stock in SpinCo, which will be designated as a registered investment company.

Tax benefit

The breakup is an attempt to ensure that most SpinCo shareholders profiting from future sales of Alibaba stock will be taxed at a lower rate than Yahoo Inc. would have paid had it held on to the stake, said Mark Luscombe, principal federal tax analyst for Wolters Kluwer Tax & Accounting.

Yahoo Inc. invested just $1 billion in Alibaba nearly a decade ago, a bargain that slapped the company with massive tax bills as it whittled its stake during the past three years. Without the spinoff, Mayer estimated that Yahoo's tax bills on its Alibaba stake would have been about $16 billion, based on Alibaba's current market value.

It might sound like another way for a large company to dodge taxes, but there is nothing wrong with the manoeuvr under U.S. law, said Don Williamson, professor of taxation at American University's Kogod School of Business.

"Some people would call it a loophole," Williamson said. "Others would call it a more efficient way of doing business."


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Canadian workforce at lowest level in 14 years in 2014

Just 121,000 more Canadians found jobs in 2014 and the number of people in the workforce has fallen to the lowest level in 14 years, according to Statistics Canada.

That's because the growth in the number of Canadians of working age, which rose 1.1 per cent, outstripped the growth of jobs in the economy, which grew by 0.7 per cent.

The labour participation rate, a key measure of whether Canadians are working or looking for work, fell 0.6 percentage points to 65.7 per cent in December 2014 — the lowest since 2000.

Part of the decline is due to an aging population, as Canadians over 55 are less likely to participate in the workforce.

But a low labour participation rate also indicates many Canadians have lost confidence they can find work. Youth unemployment remains stubbornly high.

Compared with December 2013, full-time employment increased by 158,000 jobs, while part-time employment didn't change much. The total number of hours worked increased by 0.6 per cent over the period.

Employment growth in the year was concentrated among men  25 and older. Most new employment was in the private sector, with little change from the previous year in the number of public-sector and self-employed workers.

Employment grew in Alberta, Manitoba, Saskatchewan and Ontario in 2014, but declined in Newfoundland and Labrador as well as New Brunswick.

At the end of the year, the unemployment rate was 6.7 per cent, down 0.5 percentage points from December 2013 — revised from the previous estimate of 6.6 per cent unemployment.


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Boeing, SpaceX rides for astronauts expected to save NASA millions

Written By Unknown on Selasa, 27 Januari 2015 | 22.40

NASA expects to save millions of dollars sending astronauts to the International Space Station, once its commercial crew program starts flying in a couple of years.

SpaceX and Boeing said Monday that they are on track to carry out their first manned test flights to the space station in 2017. NASA chose the two private companies last September to transport American astronauts to and from the orbiting lab.

U.S. manned launches ended with the retirement of the space shuttles in 2011. Until SpaceX and Boeing begin flying crews from Cape Canaveral, NASA astronauts must continue to hitch rocket rides with Russia.

"I don't ever want to have to write another check" to the Russian Space Agency after 2017, said NASA Administrator Charles Bolden, a former shuttle commander.NASA's commercial crew program manager, Kathy Lueders, said the average price for a seat aboard the SpaceX Dragon and Boeing CST-100 capsules will be $58 million. That compares with $71 million a seat charged by Russia under its latest NASA contract.\

"If we can make that date," he said, referring to 2017, "I'm a happy camper."

Cost includes cargo

Unlike the Russian charge, the $58 million per-person cost estimate includes a fair amount of cargo to be flown aboard the SpaceX and Boeing spacecraft, along with four crew members. That price tag is based on a five-year period, Lueders said.

Dragon V2 capsule

SpaceX, which makes the Dragon spacecraft, was one of two companies contracted by NASA to take astronauts to the International Space Station. (NASA/CBC)

The Russian Soyuz holds a maximum of three people, with at least one a Russian to pilot the craft.

SpaceX President Gwynne Shotwell said the future enhanced Dragon capsule could carry five astronauts — one more than NASA's stipulated four — and still meet all the cargo requirements.

The Hawthorne, California, company, led by billionaire Elon Musk, was the space station's first commercial shipper. It's been successfully delivering supplies since 2012 with the Dragon. Virginia's Orbital Sciences Corp., NASA's other contracted supplier, has grounded its rocket fleet following a launch explosion last fall.

Lueders said the plan is to have two "robust providers" for crew transport, in case one of them ends up grounded by technical problems. NASA awarded SpaceX $2.6 billion for crew transport, while Boeing got $4.2 billion. Each is to provide two to six missions.

Boeing's vice president and general manager for Houston-based space exploration, John Elbon, said an unmanned test flight of the CST-100 capsule in 2017 will be followed a few months later by the first crewed test flight. That first manned mission will include one Boeing test pilot and one NASA astronaut, he said.

Unmanned test may happen in 2016

Shotwell said the SpaceX unmanned test flight could occur as early as 2016, followed by a crewed flight in 2017. She said the company is still working on the number and makeup of the first crew.

Boeing CST-100 spacecraft

The interior of Boeing's CST-100 spacecraft features LED lighting and tablet technology. (Robert Markowitz/NASA/Reuters)

It was the first in-depth public description of the commercial crew effort by NASA and winners SpaceX and Boeing; discussion had been stalled because of a protest lodged by losing competitor Sierra Nevada Corp., developer of the mini-shuttle Dream Chaser. The Government Accountability Office dismissed Sierra Nevada's challenge earlier this month.

Some of NASA's 40-something-member astronaut corps turned out for the event at Johnson Space Center in Houston. Bolden urged "they better start smiling."

While the current astronauts will be the ones flying to the space station on Dragons and CST-100s, it will be the younger, future crop that ends up bound for Mars, he noted.

NASA conducted a successful orbital test flight of its new Orion spacecraft last month. That's the capsule that, along with linked habitats, would get crews to and from Mars in the 2030s under NASA's current plan.

Bolden said NASA wouldn't be able to do deep-space exploration if it was still saddled with getting supplies and people to low-Earth orbit.

"We're about going to Mars," he said.


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Middle-class families earn up to $120K a year, feds say

Canada's finance minister insists low- and middle-income families will see two-thirds of the benefits from the Harper government's contentious multibillion-dollar tableau of family-friendly measures.

By that measure, Joe Oliver is suggesting families with annual incomes as high as $120,000 qualify as middle class.

The Finance Department's own internal breakdown of the distribution of relief from the family package shows 68 per cent of the benefits — about two-thirds — will go to families that earn as much as $120,000 in 2015.

The Canadian Press obtained the figures under the Access to Information Act.

"Two-thirds of the benefits will go to low- and middle-income families," Oliver said Monday while defending the government's family package during Question Period in the House of Commons.

"I'm proud that our government has presented a plan, a benefit plan for four million Canadian families — every one of them."

That family plan, including a controversial $2-billion-per-year income-splitting component, is expected to be a centrepiece of the Tories' re-election campaign when Canadians head to the polls later this year.

It has also become a preferred bull's-eye for their adversaries.

No universal definition of 'middle class'

Political opponents have zeroed in on the income-splitting element, calling it an unfair policy that provides no relief for 85 per cent of all Canadian households and provides more benefits to wealthier families.

Looking at the family tax-and-benefit package as a whole, however, the subjective nature of the so-called "middle class" means who exactly stands to benefit — and who does not — remains an open question.

There is no universal definition of the middle class, a term frequently trotted out by politicians as a way to connect with a large group of voters.

Economists prefer to stick to statistical definitions to identify the middle class, such as isolating that 20 per cent of all income earners who land directly in the middle in terms of income.

They may also try to pinpoint the median income, selected by lining up all earners from top to bottom and identifying the person in the middle.

Statistics Canada says the median 2012 income level for families of at least two people was $82,100, including government transfers but before taxes.

This measure includes families without kids.

In its internal analysis of the family package, the Finance Department also used income calculated with transfers and before taxes, a spokesman said.

The government's figures show that 25 per cent of the relief will go to families that earn under $30,000 in 2015; 11 per cent to those earning between $30,000 and $60,000; 15 per cent between $60,000 and $90,000; and 17 per cent between $90,000 and $120,000.

Package to reduce government revenues by $26.7 billion by 2020

Together, these categories represent 68 per cent of the relief.

The average relief for families that earn less than $60,000 is expected to be $970, while those in the $60,000 to $120,000 bracket will get an average of $1,219.

The remaining 32-per-cent share will benefit families that bring in more than $120,000 this year.

The average relief for families that take home between $120,000 and $180,000 is $1,183, while those that earn more than $180,000 will receive an average benefit of $1,452.

Overall, the government documents say 4.07 million families will benefit from the measures in 2015 by an average of $1,140 each.

The entire package is expected to reduce government revenues by $4.62 billion in 2015, and $26.7 billion between 2014-15 and 2019-20.

The government's tableau of family measures, announced in October, includes the expansion of the universal child care benefit and an increase to the maximum child-care expense deduction for each child.

It also features income splitting, which will allow an eligible taxpayer with at least one child to transfer up to $50,000 of income to his or her spouse in order to collect a non-refundable tax credit of up to $2,000 per year.


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Why Europe fears a Grexit more than a new bailout

Europe is caught on the horns of a dilemma.

Just when economists and financiers were dusting their hands over a job well done fixing Greece's economy, they stumbled across an irritating roadblock. From its birthplace, democracy intervened.

In a warning that goes far beyond the continent, European governments have been forced to realize that satisfying bondholders is not always enough. Bondholders have a lot of power but the Greek election reminds us that, when pushed too far, voters have more.

Hardliners, notably from Germany, complain that Greece has already had its bailout and that the rich countries of Northern Europe should now wash their hands of their ne'er-do-well southern neighbour. As Don Murray of CBC News says, Germans would do well to remember they have benefited from bailouts.

But there is a more self-interested reason for them to be charitable: The alternative could be even more costly.

Greece's critics say the country's current financial mess is its own fault because it borrowed too much. By that argument, if Greeks reject the discipline of austerity, they alone should accept the consequences of leaving the euro, the so-called Grexit.

Flawed argument

The argument is flawed in two ways. One is that in the world of finance, borrowing too much money is not just a problem for the borrower. Lenders also take a share of the responsibility, partly by setting interest rates high enough to cover losses from risky loans.

It is written right into the principle of bond lending that some borrowers will default. That is why interest rates differ. In theory, the high cost of borrowing discourages risky borrowers. The high income from those rates pays for a higher than expected rate of default.

For a number of reasons, default is difficult while Greece continues to use the euro. But if it exits the euro and switches its euro-denominated loans into a new currency, it can safely devalue that currency and start afresh. 

The other flaw in the anti-Greece argument is the view that only Greeks will be hurt. The fact is that while the new currency, let's call it the drachma, would make European goods more expensive, the burden of austerity would be gone.

The country would no longer have to sell its public enterprises to the private sector, and most of the money lent to it by European banks and governments would have disappeared.

European pain

If a Grexit happens, European institutions will have lost just as much cash as if they had made a deal to forgive some of the Greek debt. There is no guarantee such a separation would be painless, nor that a post-euro Greece would be a trouble-free, easygoing member of the European Union. The tearing sounds would be loud, both inside and outside the eurozone.

But there is a much worse outcome for the countries of Northern Europe -- if a Grexit is a success.

It is possible that wiping out the debt and revaluing the currency would turn the Greek economy around, spurring the country's key tourism industry, rebuilding manufacturing, creating jobs and transferring wealth from the Mercedes-driving elites to the people who backed the new prime minister.

It is possible that Greeks, having witnessed the pain of economic deprivation and austerity, will find a new resolve. Tried by fire, they could work together and allow their new government a chance to rebuild. Even if they are only partially successful they would be a model for other struggling Southern European economies.

Warning from Piketty

As the best-selling French economist Thomas Piketty has said, one reason inequality is a threat to capitalism is that if enough people feel they are not getting their share they will elect governments that will turn against global capital. If the Greek democratic revolution is a success, how long until a Grexit is followed by a Spanxit, an Itxit or a Franxit?

The deal is far from done and things could still go wrong. But no wonder most European governments say they are willing to negotiate better terms that will improve the lives of ordinary Greeks. No wonder bond markets are so confident the Europeans will offer a deal satisfactory to the new Greek prime minister Alexis Tsipras. The alternative is even less appealing.

For those of us who may have grown cynical about democracy and the power of money to influence elections, the Greeks have taught us a wonderful, upbeat lesson. People will accept a lot of hardship in exchange for stability, but they will only be pushed so far.

This is a warning to financial markets everywhere that for good or ill, in a democracy voters get the final say.


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Grocery chain Metro raises dividend

Metro Inc.says its quarterly dividend will be going up 16.7 per cent amid expectations that the grocery company is well-positioned to continue strong growth in the coming quarters.

The Montreal-based company says its net income in the first quarter ended Dec. 20 was up 13.4 per cent from a year ago, rising to $112.5 million from $99.2 million a year earlier.

Metro's adjusted earnings were up 21.6 per cent to $1.35 per share, four cents above analyst estimates from Thomson Reuters.

Sales totalled $2.84 billion, up 5.2 per cent from $2.7 billion or 5.2 per cent from a year earlier.

The company's chief executive says he's confident Metro is well-positioned to continue growth over the coming quarters.

"Building on the momentum of the fourth quarter of 2014, our sales growth was strong and we are pleased with our first quarter results," Metro CEO and president Eric La Fleche said in a statement.

"Our merchandising strategies and investments in our retail network are well received by our customers and we are confident that we are well-positioned to continue to grow over the coming quarters."

The financial report was released before Metro's annual shareholders meeting in Montreal.

Metro also announced a three-for-one stock split, which will result in shareholders of record getting two additional shares for each share they own at Feb. 6. The split is expected to take effect Feb. 11.

Metro says it wiill increase its dividend with the March 16 payout to shareholders of record as of Feb. 6. Prior to the split, the quarterly dividend will rise by five cents to 35 cents per share. On a split-adjusted basis, the dividend will got to 11.7 cents per share after Feb. 18.


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Parliamentary budget officer sees $48 oil creating small deficit

The parliamentary budget officer (PBO) projects the federal government could see its $3-billion contingency fund dissipate and run a $400-million deficit in 2015-16 if oil prices stay at an average of $48 a barrel.

The watchdog was asked by Liberal MP John McKay to analyze the impact of lower oil prices on projected federal surpluses through 2019-20. 

The projections work through the numbers for two scenarios:

  • West Texas Intermediate (WTI) stays at its recent price of $48 a barrel through the entire time period.
  • WTI sits at an average of $51 for 2015 and then rises gradually to $81 in 2019.

In the rosier scenario, the analysis suggests the books can show a small surplus of $700 million, assuming the contingency fund is tapped.

"The path for oil prices over the next five years is uncertain," the report from Jean-Denis Frechette's office cautions.

PBO Outlook 20141021

Jean-Denis Frechette, the parliamentary budget officer, issued his report in response to a request from Liberal MP John MacKay. (Handout/Canadian Press)

If something resembling the first scenario comes to pass, the PBO estimates that a price of $48/barrel would would reduce federal budgetary revenues by approximately $7.6 billion annually, on average, over 2015‐16 to 2019‐20.

Overall, the federal budgetary balance would be reduced by $4.8 billion annually, on average, over 2015‐16 to 2019‐20.

The impact across Canada's economy would result in lower household incomes and corporate profits, the report says, which would reduce the federal government's personal and corporate income tax revenues.

But lower prices also reduce the government's expenses when it purchases goods and services, partially offsetting the lost revenue.

Spending on programs that are indexed to inflation elderly benefit payments and the Canada child tax benefit, for example  would be lower. Spending that's tied directly to growth in nominal GDP, like transfers to other levels of government, would also be lower.

The PBO stresses, however, that the impacts of lower oil prices considered in its two scenarios do not include impacts from Canada's lower real GDP that would likely materialize.

"As such, the fiscal impacts [in absolute terms] should be viewed as lower bound estimates," the report concludes.

Last week, the Bank of Canada scaled back its forecast for GDP growth, attributing low oil prices in its decision to cut the key overnight lending rate by a quarter of a percentage point.

CBC is not responsible for 3rd party content


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Europe Central Bank stimulus plan brightens economic outlook

Written By Unknown on Minggu, 25 Januari 2015 | 22.40

The global economic outlook just got brighter after this week's big stimulus from the European Central Bank, leading policymakers from around the world said Saturday.

In a panel at the World Economic Forum in Davos, they said a perkier Europe, coupled with a prolonged period of low oil prices, could help shore up the global economy following a period of under performance that has prompted many forecasters to reduce their growth forecasts.

"Lower oil prices and the big decision by ECB could further improve world economic outlook," said Haruhiko Kuroda, governor of the Bank of Japan.

The ECB's planned 1.1 trillion-euro ($1.2 trillion) stimulus has been one of the main talking points at Davos and has helped counter some of the pessimism that has enveloped the global economy in the past few weeks. Stock markets around the world have surged amid hopes the ECB move could help boost the ailing economy of the 19-country eurozone.

'In the case of Europe, being patient is just a risk that we don't want to take.'- Benoit Coeure. ECB board member

However, Benoit Coeure, an executive board member at the ECB, insisted that on its own, it won't be enough. He said governments across the region have to enact a raft of structural reforms to their economies, such as making their labour markets more flexible and encouraging businesses to invest.

"We have done our part, others have to do their part," he said.

Coeure hoped the stimulus will give governments the space and encouragement to proceed with those measures.

"In the case of Europe, being patient is just a risk that we don't want to take," he said.

Some in Europe, particularly in Germany, are worried that the ECB's bond-buying program may ease the pressure on governments to do more to reform their economies.

In Germany, there's also concern the stimulus is debasing the euro currency — the prospect of more euros in circulation can weigh on the currency. The euro has fallen sharply since Thursday's announcement, and is trading at 11-year lows around the $1.12 mark.

That's potentially good news for eurozone exporters as it makes their wares cheaper in international markets. A lower euro can also boost inflation as imports get pricier. The primary motivation behind the stimulus is to get inflation in the eurozone back toward the target of just below 2 per cent. Currently prices are falling modestly.

Coeure insisted the lower euro wasn't a primary motivation of the ECB, stressing that the ECB doesn't have an exchange rate target.

The euro's fall, he said, "was part of the channel" by which the stimulus works but "not the main consideration."

International bank execs composite

Central bankers have shaken markets this week with their stimulus plan. From left, European Central Bank president Mario Draghi, Bank of Canada governor Stephen Poloz and Swiss National Bank chairman Thomas Jordan. (Reuters)

Mark Carney, governor of the Bank of England, also welcomed the ECB's stimulus and said low oil prices may prevail for longer than many people think.

"That creates an opportunity that is considerable and possibly undervalued for the global economy," he said.

Carney did issue one note of caution, warning that the current low interest rates around the world and the stimulus programs in Europe and Japan could prompt "excessive risk-taking." However, he said a better international supervisory framework means the world economy is more able to deal with that than it was before the global financial crisis in 2008.

But now, in a single week, three central bankers have attracted  not just the attention of the business press, but made the top of newscasts and appeared in blazing front page headlines in popular dailies.


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Top Target Canada managers get big cash payouts as stores close

As Target Canada prepares to shut its doors, key managers will walk away with thousands of dollars of extra cash, but none of its approximately 17,000 front-line workers will be so lucky. Target is not offering any severance.

Target, based in the U.S., is closing all of its 133 Canadian stores.

Between 21 and 26 of Target Canada's top senior and operations managers will receive an average of about $30,000 each on top of their final paycheque. That's equal to eight to 12 weeks' salary for most of them.

Approximately 520 store level managers, about four per Target Canada store, will get an average of around $11,000 each, also based on eight to 12 weeks salary.

The extra payments add up to $6.5 million. Managers have to stay in their jobs until they're no longer needed in order to receive the cash.

The cash incentives are part of a Key Employee Retention Plan (KERP). Target has applied for creditor protection and documents filed in Ontario Superior Court explain that KERP was created by Target Canada to encourage key managers to stick around and guide the company as it winds down operations and closes stores.

The document notes the extra cash payments are necessary because the company can't risk losing its valued managers: "These employees have significant experience and specialized expertise that cannot be easily replicated or replaced."

Outrage at extra pay

A Target Canada employee named Sarah, who asked that her real name not be used for fear she will lose the final weeks of her employment for speaking out, is already upset that she's losing her team member job at an Ontario Target store and getting no severance. On learning that some managers are receiving extra cash, she finds her outrage boiling over. 

'At the end of the day, it's the team members that run that store.'- An employee who is losing her job

Referring to what select managers of her store may each get, she says, "$11,000 is a little under a year's salary for me. That's disgusting."

"I'm fuming right now, absolutely fuming. Wow. I'm stunned. I'm not surprised and yet I'm at a loss of words," says the single mother.

She doesn't buy the idea that the cash is needed to entice some store managers to stay because their expertise in the final days will be vital.

"I don't see where they're a key employee. I'm failing to see that. It's the team members who are getting the product to the floor for it to be sold, and keeping the store clean."

She recognizes the need for leadership but says that "at the end of the day, it's the team members that run that store."

Target is providing all eligible workers with at least 16 weeks pay starting on Jan. 25. Some will be let go early and still pocket the entire four months' pay. But others may have to work for the entire time.

"If we work the full 16 weeks, it's 'Thank you very much for your hard work, goodbye.' We get nothing," Sarah says.

Why should I care?

Labour expert Anil Verma says a cash top-up for select managers is common practice in the business world.

"The traditional view is that it's all hierarchy driven. Companies would say that the top guy has to make sure that there's an orderly wind down," says the professor who teaches at the Rotman School of Management at the University of Toronto.

But he says what is unusual is the fact that many Target Canada employees are remaining on the job, possibly for several weeks, after being given notice.

Without a financial incentive, says Verma, workers still scheduled to work could turn into lousy employees who might even be a menace.

"If I were Target, I think I'd be very concerned about the possibility of sabotage and so forth. Also, imagine what the motivation of these workers would be? Why would they want to do a good job?

"I think that Target is setting itself up for even more difficult times winding down," he concludes.

Sarah admits knowing some are getting a cash top-up dampens her drive to do a good job.

"It discourages me from wanting to work hard and make sure this company has a positive exit, because they're not making sure I have a positive exit from their company, after all the work I put in."


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