SNC-Lavalin to sell AltaLink for $3.2B

SNC-Lavalin announced Thursday that it is selling AltaLink — Alberta's largest regulated electricity transmission company — to a subsidiary of the holding company run by U.S. financier Warren Buffett for gross proceeds of $3.2 billion.

The deal with Berkshire Hathaway Energy, owned by Bershire Hathaway Inc., is expected to close Dec. 31 and represents what the Montreal-based engineering giant says is "another significant step" in its strategic plan to unlock and create value from its portfolio of infrastructure concession investments.

AltaLink owns more than half of Alberta's transmission grid, some 12,000 kilometres of transmission lines, as well as 280 substations and delivers electricity to about 85 per cent of the province's population.

"After a robust process that drew considerable interest, we are very pleased to announce a transaction that recognizes significant value for AltaLink — a unique regulated asset in a high-growth electricity market — while also providing for a continued relationship with SNC-Lavalin," president and CEO Robert Card said in a statement announcing the deal after markets closed.

"I would like to thank AltaLink's employees, who have helped make their company so successful. I know they will have a bright future and benefit from enhanced career opportunities as part of Berkshire Hathaway Energy," Card added.

"The sale of AltaLink will help us build value for our company by providing opportunities to advance our E&C (engineering and construction) growth strategy."

Meanwhile, SNC and MidAmerican Transmission, a subsidiary of Berkshire Hathaway Energy, have also mutually agreed to develop engineering, procurement and construction opportunities in the United States and Canada.

"The agreement combines the engineering and construction management strengths of SNC-Lavalin with the strong track record of MidAmerican Transmission on joint transmission projects with other entities," SNC said.

Completion of the sale is subject to customary regulatory approvals, including approval by the Alberta Utilities Commission and approvals pursuant to the Competition Act and Investment Canada Act, which requires that deals of this size involving foreign buyers are of net benefit to Canada.

Based in Des Moines, Iowa, Berkshire Hathaway Energy, with assets of some $70 billion, owns and operates some 284,000 kilometres of transmission and distribution lines. Its subsidiary, MidAmerican Transmission, owns transmission lines throughout the U.S. and Canada.

SNC-Lavalin is one of the leading engineering and construction groups in the world and is a major player in the ownership of infrastructure and in the provision of operations and maintenance services.

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Ontario heads for June election, NDP to vote down budget

Ontario NDP Leader Andrea Horwath said this morning she will not support the minority Liberals' budget, a move that would send the province into a provincial election in June.

"I have lost confidence in Kathleen Wynne and her ability to deliver," Horwath said Friday. "I cannot in good conscience support a government that people don't trust anymore."

Horwath's announcement comes a day after she stayed silent as the Liberals released their budget on Thursday.

On Friday, she listed a number of scandals she says have caused her to lose confidence in the Wynne government. She also pointed to a number of undelivered Liberal promises.

Wynne had given Horwath a May 8 deadline to indicate whether she would support the budget. With Progressive Conservative Leader Tim Hudak already indicating he would not back it, the decision of whether to keep the Wynne government alive fell into Horwath's hands.

"This budget is not a solid plan for the future," she said. "It's a mad dash to escape the scandals. It's time for change. We do not support this government any longer."

With the Progressive Conservatives and NDP vowing to vote against the budget, the Liberal government appears poised to fall on what amounts to a confidence vote in the legislature.

Wynne could decide not to wait for the budget votes — there will actually be two  — and could ask the  lieutenant governor to dissolve the legislature and call an election.

Several large labour groups, including Unifor and the Ontario Federation of Labour, urged the NDP to pass the budget and avoid an election, but public-sector unions complained the fiscal plan puts jobs at risk.

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Meadowbank helps put Agnico Eagle back in the black

Agnico Eagle's Meadowbank gold mine, about 150 kilometres north of Baker Lake, Nunavut. (Agnico Eagle Mines)

Agnico Eagle Mines has reported a net income of $108 million in the first quarter of 2014 — a big improvement over its $406 million loss in 2013.

Gold prices are lower than at this time last year. Rather, Agnico Eagle says it set a company record for gold production in the last three months, extracting about 366,421 ounces overall at a cost of $567 US per ounce. That's $200 less per ounce than in the same three months in 2013.

Agnico Eagle president and CEO Sean Boyd said a lot of the first-quarter success was due to the company's largest gold producer, the Meadowbank mine in Nunavut, but added there was also strong performance from mines in the Abitibi region of northwestern Quebec.

"Meadowbank carried on its strong performance from Q4 of 2013.In fact, it had a very strong entire 2013. We carried that momentum into the first quarter (and) we're seeing strong production in April. We have encountered higher grades there."

The company is doing exploration around Meadowbank, about 110 kilometres north of Baker Lake, through which it hopes to extend the life of the mine. 

This year, it will spend about $2.2 million in exploration in and around the mine site, including at the IVR project, about 50 kilometres northwest of the mine. 

Boyd said that La Ronde in Quebec is also getting to more high-grade material in lower parts of the mine, which has lowered costs. And the Goldex mine in Quebec, which began commercial production in the fourth quarter, has also performed well.

"It's not production. We're getting very good cost-per-tonne performance at a number of our key mines, which is helping us lower the costs," Boyd said.

The company said on Thursday, after markets closed, that its 2014 production is now expected to be above its previous high estimate of between 1.175 million ounces and 1.205 million ounces, while costs will come in below its previous forecast range of between $670 US and $690 US per ounce.

Agnico Eagle recently joined a friendly takeover bid with Yamana Gold Corp. for Montreal-based Osisko Mining Corp. (TSX:OSK), which owns the Canadian Malartic gold mine in Quebec.

That mine which began commercial production in May of 2011, lies in the middle of Agnico Eagle's three mines between Val d'Or, Que. and Rouyn-Noranda, Que.

Osisko's shareholders have yet to approve the deal.

Boyd said it's too soon to say who will operate Canadian Malartic.

"I think we bring a lot to the table. We have a technical services team that's based in that region that services all of our mines, so we tend to do a lot of the technical work ourselves… and so we hope to bring that skill set to the table," Boyd said in a telephone interview.

Like other gold producers, Agnico-Eagle had a difficult year in 2013. In February it announced that its quarterly dividend would be cut from the 22 cents paid in December to eight cents. On Thursday, it announced the dividend would remain at eight cents per share with the next payment on June 16.

It also announced in February that it had a $453.3 million net loss, or $2.61 per share, for the fourth quarter. It included a non-cash item for asset impairments, which reduced operating earnings by $436.3 million or $2.51 per share, and a number of smaller items that are excluded for adjusted earnings.

Agnico Eagle shares closed Thursday at $32.42 before the financial results were issued, down from $33.45 on April 15, just before the Osisko deal was announced.

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AstraZeneca rejects Pfizer's $106B takeover bid

Pharmaceutical company AstraZeneca on Friday flatly rejected drug maker Pfizer's sweetened takeover bid — worth $106 billion US — just hours after it was levelled, describing it as inadequate.

After being rebuffed twice, Pfizer Inc., the maker of Viagra, made a third attempt for the London-based rival on Friday, offering £50  ($92 Cdn) a share in cash and stock, a 7.3 per cent increase on its last bid. The deal would be the biggest-ever foreign takeover of a British business.

But AstraZeneca's board said the terms were not right and the price substantially undervalued the company. The Anglo-Swedish firm said the potentially lucrative "pipeline" of new drugs it is developing would be disrupted by a takeover and its possible consequences.

Board rejects proposal

"Pfizer's proposal would dramatically dilute AstraZeneca shareholders' exposure to our unique pipeline and would create risks around its delivery," said Leif Johansson, the chairman of AstraZeneca. "As such, the board has no hesitation in rejecting the proposal."

Pfizer's bid early Friday comes amid a spate of mergers and acquisitions in the pharmaceutical industry, which is moving to consolidate gains as the patents on some top earners expire.

"There is a highly compelling strategic, business and financial rationale for combining our businesses, with significant benefits for shareholders and stakeholders of both companies," Pfizer CEO Ian Read said in a statement announcing the offer.

But the move quickly became political. Critics fear the takeover could mean big job cuts, and the potential loss of stature in the science sector in Britain has become a political issue.

Pledge to keep tax residence in U.K.

Cognizant of the concerns, Pfizer sent a letter to British Prime Minister David Cameron, promising to keep the company's corporate and tax residence in England. It said that the "golden triangle of Oxford, Cambridge and London" — where a significant portion of British scientific research is based — would represent a vital component of the deal.

Cameron responded within a few hours, declaring that while the government regards the potential takeover bid as a matter for the respective boards, the government was "determined to secure great British science, research and manufacturing jobs in the life sciences sector."

"The government will consider these proposals carefully as to whether they offer sufficient protection of our priorities," Cameron said.

Britain is investing millions of pounds into boosting science in the so-called "Golden Triangle" in the country's southeast. Only last month, London Mayor Boris Johnson announced a new investment organization meant to attract life sciences corporations and to facilitate collaboration between companies and researchers.

Besides access to the intellectual capital, some analysts say the main impetus for Pfizer's interest in AstraZeneca is a wish to limit a potential tax hit. Analysts suggest Pfizer has earned and held billions of cash overseas that it would have to pay taxes on at relatively high U.S. rates should it be brought back.

Political football

"Once the cash is offshore, the potential tax cost of repatriating it to the U.S. makes it much more attractive to find other homes for it — such as making foreign acquisitions," said tax specialist Heather Self of the law firm, Pinsent Masons.

Critics quickly took note and wondered whether Pfizer had any commitment to Britain at all.

"This does look a little bit like a transaction which has tax planning as a rationale," the opposition Labour Party's shadow business secretary, Chuka Umunna, told the BBC.

Pfizer is the world's second-biggest drugmaker by revenue, with sales of $51.6 billion last year and staff of 77,700.

AstraZeneca PLC ranks eighth, with sales of $25.7 billion last year and 51,500 employees worldwide. AstraZeneca was created in 1999 through the merger of Sweden's Astra and Britain's Zeneca.

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20-year Budweiser executive sues for sex discrimination

From male-only corporate jets to guys' golf outings and hunting trips, Francine Katz says her time in the Anheuser-Busch executive suite was rife with exclusion, intentional slights and outright discrimination. But it wasn't until the King of Beers' 2008 sale to Belgian brewer InBev in a hostile takeover that she says she realized the boy's club atmosphere was costing her millions in salary and bonuses.

In a 20-year career that saw her rise from a young corporate lawyer to a job as vice-president, key strategist and the beer maker's top female executive, Katz became the public face of her hometown employer, defending the maker of Budweiser and Bud Light from overzealous regulators and anti-alcohol crusaders before Congress and on network TV news shows.

'I felt invisible'- Budweiser executive Francine Katz

Now she's accusing Anheuser-Busch of sex discrimination, arguing in a 2009 lawsuit that went to trial this week that top male executives — including former CEOs August Busch III and his son, August Busch IV — purposely paid her less solely because she's a woman. Six years after the sale of AB to inBev, the trial fascinates a company town, threatening to give more unwanted publicity to a family dynasty that's had its fair share.

Systemic discrimination

"This was a company run by men who were unaccustomed with working with women at high levels," Katz's attorney, Mary Anne Sedey, told the jury of seven women and five men in opening arguments of a trial expected to last several weeks.

The trial comes amid growing national attention to gender discrimination in the workplace. In March, the White House Council on Economic Advisers issued a report noting that on average full-time working women earn 77 cents for every dollar earned by their male counterparts. Critics of the report said that figure oversimplifies the situation, but even they concede that women with advanced degrees in fields such as medicine and law face a persistent wage gap as their careers advance.

Counting bonuses and stock options, Katz earned more than $1 million annually after her 2002 promotion to vice-president of communications and consumer affairs and elevation to the company's influential strategy committee. Her predecessor, former National Urban League President John Jacob, earned four times that amount in his final year, Katz's lawyer said. Katz said she didn't realize the pay gap until reviewing tax filings connected to the sale to InBev.

Katz said August Busch III called her "ungrateful" after she brought her complaint about the salary disparity to him and other top company executives.

'Significantly underpaid'

"Make no mistake about it. Francine Katz earned a lot of money at Anheuser-Busch," Sedey said. "But like so many women in this country, Francine Katz was significantly underpaid."

Her attorney said Katz deserves at least $9.4 million she was entitled to from 2002 to 2008, plus punitive damages. In 2008, her final year with the company, Katz reported more than $14 million in income on her federal tax returns, an amount that includes stock options she cashed in.

Lawyers for Anheuser-Busch counter that Katz's salary, benefits and bonuses compared favourably to those in similar positions at Coca-Cola, Proctor & Gamble and other large U.S. corporations. They suggested that her primary duty involved public relations, while Jacob had far more substantive responsibilities, including as August Busch III's trusted confidant.

"Francine Katz was paid based on her job, not her gender," said Anheuser-Busch attorney Jim Bennett. "There was a fair process used, a rigorous process used."

Precedent setting

Liz Watson, a senior counsel at the National Women's Law Center who specializes in employment law, said the jury should not focus just on her admittedly sizable salary.

"Pay discrimination in any job is simply illegal and intolerable, no matter the level of compensation," she said.

Both August Busch III and his son and namesake, who led the company for two years before its sale, are expected to testify, perhaps as soon as Friday. Their presence is sure to draw close attention in St. Louis, where a bevy of buildings, from university lecture halls to the St. Louis Cardinals' stadium, bear the family name.

The elder Busch, 76, succeeded his father as CEO in 1975 at 38 in a coup initially resisted by August "Gussie" Busch Jr. August Busch III remained in charge for nearly three decades before his 2002 retirement and stayed on as chairman of its board of directors through 2006. Under his watch, the family business founded by German immigrants in 1876 became the country's largest brewer.

Colleagues and underlings said Busch ruled with an iron fist and a hair-trigger temper. Katz testified this week that Jacob told her Busch avoided discussing a contentious environmental issue with her because he was afraid Katz would cry.

Culture of exclusion

August Busch IV, 49, was better known for his legal missteps and love of nightlife before his ascendancy to the boardroom. As a sophomore at the University of Arizona, Busch caused a 1983 car accident that led to the death of his 22-year-old passenger, waitress Michele Frederick. A seven-month police investigation of a possible involuntary manslaughter concluded without charges being filed.

In 2010, the great-great-grandson of company founder Adolphus Busch was again in the spotlight for the wrong reasons when his 27-year-old girlfriend died of an accidental drug overdose at his mansion. He later settled a wrongful-death lawsuit filed by Adrienne Martin's family for $1.75 million.

Katz testified that Busch and another company executive forced her to fly on a separate corporate plane when the group travelled to Columbus, Ohio, so Katz could meet with the state's attorney general while her boss convened with Ohio's governor. On other occasions, she was excluded from corporate golf tournaments and other social functions, she said.

"I felt invisible," Katz said.

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How Canada became addicted to temporary foreign workers

The Temporary Foreign Worker Program has ballooned into a problem that's hurting not only unemployed Canadians but those coming here from abroad for short-term jobs as well, one labour expert says.

"The irony is we had a model that worked and we scrapped it," said Jason Foster, the coordinator for Athabasca University's industrial relations program. It went from a "small, nimble" program to a large-scale one that the government "lost the capacity to manage."

The Temporary Foreign Worker Program is under intense parliamentary scrutiny at the moment, following a series of allegations about the system being abused, including by the Royal Bank of Canada, three McDonald's franchises in Victoria, B.C., and a Weyburn, Sask. pizza restaurant.

Canada introduced the TFW program in 1973 with the goal of bringing in highly-specialized workers like academics and engineers to fill gaps here.

In 2002, the program morphed into something else under the Jean Chretien Liberals as it was opened to low-skill workers. It expanded further in the following years under the Liberals and Conservatives as a system came into place to expedite bringing workers into dozens of sectors, including food and construction, following pilot projects in Alberta and B.C.

The result was that it tripled in size within a decade, rising from 101,000 temporary foreign workers in 2002 to 338,000 in 2012. The fastest growing area has been low-skill workers. 

'Everybody's impacted'

Though foreign workers rotate in and out under the program, with a four-year maximum stay, they've become a permanent feature of the labour market that some sectors now rely on.

"In a way, everybody's impacted by this," says Foster.

Canadians lose out, and so can the foreign workers. Locals potentially miss out on jobs, wages are kept artificially low for everyone and the size of the program makes it hard to monitor for abuses.

Indeed, a C.D. Howe Institute report in April suggested that a pilot project that accelerated the approval process for companies to use low-skill temporary foreign workers increased unemployment levels here.

"The costs of a weakly designed TFW program can be quite high," wrote Dominique M. Gross, the report's author.

The problem lies at the very core of the program, she suggested. Though it is intended to fill labour shortages, the government doesn't even have enough data to understand what shortages exist.

Earlier this week, the Alberta Federation of Labour showed what the impact looks like on the ground.

The AFL revealed how companies were paying temporary foreign workers up to $5 less than the "prevailing" local market wage for their job — and the federal government was approving it. The figures were based on access-to-information requests.

That suggests the program can also lower wages for the foreign workers.

Lessons not learned

Last year, the restaurant industry rose to the top slot of occupations given so-called labour market opinions, basically approvals to hire temporary foreign workers. Six years ago, restaurants didn't even appear in the top 10.

"What it says to me, quite bluntly, is they have become dependent upon temporary foreign workers to meet their labour supply needs," said Foster.

"I'm not very surprised," he added. "That is exactly what we saw in Europe."

Foster points to the first-generation foreign worker programs in Europe following the Second World War, when some countries were struggling with extremely low unemployment rates of around two per cent.

"Europe is now paying the price of those programs a generation later," said Foster, pointing to the riots in France where the creation of so-called second-tier of citizens, the temporary foreign workers, was partly blamed for fuelling innercity tensions.

Many European countries later narrowed the scope of their programs, limiting the intake of foreign workers to highly-skilled professions. 

Foster argues that Canada has moved toward the old, flawed European model, instead of maintaining the small, more focused program that other countries are now moving toward.

But not everyone agrees that the situation has worsened.

'Window dressing'

Chris Ramsaroop, an organizer for the Ontario and B.C.-based non-profit group Justicia for Migrant Workers, said there's also been improvements in recent years.

"It's only in the last decade or so" that the conditions endured by some temporary foreign workers have been exposed, he said. 

But he also believes the program, in its current form, is flawed, and he doesn't hold out much hope for the federal government's promised reforms. 

Employment Minister Jason Kenney said the federal government will unveil another set of reforms for the TFW program in the coming weeks. Among them will be greater audit powers, which addresses a key concern of critics. Both New Democrats and Liberals want the Auditor General to investigate the program.

Recent changes by the Conservatives have amounted to mere "window dressing," claims Ramsaroop, when what's needed is a revamp.

He says the government should allow these short-term foreign workers to apply for residency and give them flexible work permits instead of tying them to a single company. 

"It's not simply looking at migrant workers as the problem here," he said.

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Al Feldstein, former Mad magazine chief, dead at 88

Al Feldstein, whose 28 years at the helm of Mad magazine transformed the satirical publication into a pop culture institution, has died. He was 88.

Feldstein died Tuesday at his home in Livingston, according to the Franzen-Davis Funeral Home and Crematory. No cause of death was released.

In 1956, publisher William M. Gaines put Feldstein in charge of the magazine, which gleefully parodied politicians and mocked traditional morality.

Feldstein and Gaines assembled a pool of artists and writers who turned out such enduring features as Spy vs. Spy, The Lighter Side of... and Snappy Answers to Stupid Questions.

Building on a character used by Mad founding editor Harvey Kurtzman, Feldstein turned the freckle-faced Alfred E. Neuman into an underground hero — a dimwitted everyman with a gap-toothed smile and the recurring stock phrase, "What, Me Worry?"

Neuman's character was used to skewer any and all, from Santa Claus to Darth Vader, and more recently in editorial cartoonists' parodies of President George W. Bush.

Flourished in early 1970s

The Portable Mad, a compilation of magazine highlights edited by Feldstein in 1964, gives a picture of the typical Mad features that year. Among its offerings: "Some Mad Devices for Safer Smoking" (including a "nasal exhaust fan" and "disposable lung-liner tips"); "The Mad Academy Awards for Parents" (one nominee does her "And THIS is the thanks I get!" routine); "The Lighter Side of Summer Romances"; and "Mad's Teenage Idol Promoter of the Year" (which skewers Elvis Presley and the Beatles.)

Under Gaines and Feldstein, Mad's sales flourished, topping 2 million in the early 1970s. In a 1997 interview with the Bozeman Daily Chronicle, Feldstein credited Mad's challenges to authority with helping incite the cultural revolution of the 1960s.

"Who's covering up? That was one of our slogans," he said. "We were orienting them to the adult world."

But not everyone was amused.

Mad once held a spoof contest inviting readers to submit their names to legendary FBI Director J. Edgar Hoover for an "Official Draft Dodger Card." Feldstein said two bureau agents soon showed up at the magazine's offices to demand an apology for "sullying" Hoover's reputation by using his name in Mad.

The magazine also attracted critics in Congress who questioned the magazine's decency, and a $25 million lawsuit from songwriters who objected to their work being parodied.

By Feldstein's retirement in 1984, Mad's heyday was past: Circulation had dropped to less than a third of its peak.

Returned to art after retirement

Feldstein moved West, first to Wyoming and later Montana. From a horse and llama ranch north of Yellowstone National Park, he ran a guest house and pursued his "first love" — painting wildlife, nature scenes and fantasy art and entering local art contests.

Born in 1925, Feldstein grew up in the Flatbush section of Brooklyn. He found early success as an artist a World's Fair contest for children and later trained at Manhattan's High School of Music and Art and Brooklyn College.

He got his first job in comics as a teenager, drawing background foliage for Sheena, Queen of the Jungle, which starred a female version of Tarzan.

"Then I got a great promotion," he told the Bozeman Daily Chronicle in a 1997 interview. "I was drawing leopard spots on her groin and breasts."

Feldstein served a stint in the military at the end of the Second World War, painting murals and drawing cartoons for Army newspapers. After his discharge, he freelanced for various comics before landing at Entertainment Comics.

Feldstein's survivors include his wife, Michelle, stepdaughter Katrina Oppelt, her husband, and two grandsons, the funeral home said.

Designed for children but loved by many adults, Entertainment Comics' titles included Tales From the Crypt, Weird Science and Feldstein's eventual vehicle to fame, Mad.

In 2000, a year after receiving an honorary doctorate in fine arts from Rocky Mountain College, Feldstein returned to the school to give its commencement address. He told students that while their carefree college days were ending, the "party of real life" was about to begin.

"If you're not having fun at the party you're at," he told the grads, "go find another party."

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Ukraine crisis: IMF approves $17B US bailout amid risks

The International Monetary Fund board on Wednesday approved a two-year, $17 billion US loan package for cash-strapped Ukraine as it seeks to regain stability following Russia's annexation of Crimea.

The IMF aid pledged in March will allow the immediate disbursement of $3.2 billion US to Kyiv. It was hinged on economic reforms in Ukraine, including raising taxes, freezing the minimum wage and raising energy prices — all steps that could hit households hard and strain the interim government's tenuous hold on power.​ 

Ukraine's interim government finds itself caught between the demands of international creditors and a restive population that has endured decades of economic stagnation, corruption and mismanagement.

The IMF's decision to approve the $17 billion US loan paves the way for Ukraine to receive $15 billion US in additional assistance pledged by the World Bank, the European Union, Canada, Japan and other European entities, and $1 billion US in loan guarantees from the U.S. that Congress recently approved. As part of the deal, Ukraine will be required to use some of the $17 billion US loan to repay money it already owes the monetary fund.

Bailout program faces risks, IMF chief says

Ukraine, a nation of 46 million, is in turmoil after Russia annexed Crimea. Russian President Vladimir Putin has massed 40,000 troops on Russia's border with Ukraine in what many fear is the first step to an invasion. Russia's actions have created a standoff with the United States and many European nations.

"Today's final approval for the $17 billion IMF program marks a crucial milestone for Ukraine," Treasury Secretary Jacob Lew said in a statement. 

"The IMF program, in conjunction with bilateral assistance from the United States and other nations, will enable Ukraine to build on the progress already achieved to overcome deep-seated economic challenges and help the country return to a path of economic stability and growth.

However, IMF managing director Christine Lagarde admitted the program faces geopolitical risks, along with uncertainty about the government's ability to carry out the politically unpopular measures necessary to get its finances in order.

"On the implementation front, we are taking all the precautions we can in order to mitigate those risks," Lagarde told reporters after the board's decision.

'We believe that Ukraine has an opportunity to seize the moment, to break away from previous practices, both from the fiscal, from the monetary, and from the governance point of view'- Christine Lagarde, IMF managing director

The IMF's board decided to meet every two months for the next couple reviews of Ukraine's program, rather than following the typical three-month schedule, in order to closely track the government's continued commitment to economic reforms, such as floating the currency and cutting fiscal deficits.

"On the geopolitical front, clearly the bilateral international support, and the cooperation of all parties, will be extremely helpful to reinforce the position of the economy of Ukraine," Lagarde said.

Ukrainian authorities have said the economy will likely contract by 3 per cent by the end of this year as a result of the chaos and mismanagement. Economic output fell 1.1 per cent in the first three months of the year.

Russian sanctions may hurt Ukrainian economy

Kyiv is also in a dispute with Moscow over the price it will pay for natural gas exports in the future, and over money owed for prior gas purchases.

Ukraine's economy may further suffer if sanctions intensify on its neighbour Russia, a key market for Ukrainian exports. Western nations have placed visa bans and asset freezes on Russian individuals and companies over what they see as Russian meddling in Ukraine.

"Clearly on the front of sanctions, anything that undermines the economic situation of the country will jeopardize the implementation of the program, which is why we very strongly encourage the parties to negotiate, to come to terms," Lagarde said.

Members of Ukraine's State Security Administration (top) clash with members of the Euromaidan movement's self-defence units during a rally in Kyiv on Wednesday. (Andrew Kravchenko/Reuters)

The political unrest makes it even more difficult for Ukraine to get its economy back into shape, even though the country's new government pledged to pursue politically unpopular reforms as a condition for receiving IMF aid.

Ukraine's previous two IMF programs were suspended after the government failed to follow through on promised reforms.

The IMF expects Ukraine to implement major reforms in its energy and financial sectors, including raising the price of gas for domestic consumers. The government, in power until elections on May 25, has already promised to raise gas prices by more than 50 per cent from this Thursday.

"(Ukraine) has demonstrated in the last few weeks that it can undertake comprehensive reforms and has actually addressed some of the issues that have been outstanding for a long time," Lagarde said. "We believe that Ukraine has an opportunity to seize the moment, to break away from previous practices, both from the fiscal, from the monetary, and from the governance point of view."

The decision from the IMF's 24-member board, which includes representatives from Russia and the United States, clears the way for an immediate disbursement of $3.2 billion US to Ukraine's cash-strapped government, allowing it to meet looming obligations and avoid a potential debt default. Of that first tranche, $2 billion will be targeted at supporting the budget.

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Fracking's effect on water not properly monitored, report finds

A new report commissioned by Environment Canada says there's little information about the effects of shale gas development on the environment.

The report by a panel of 14 international experts concludes "data about potential environmental impacts are neither sufficient nor conclusive."

So little is known about the long-term impacts of extracting gas by fracturing rock beds with high-pressure fluids that scientists and regulators need to start now to understand how to develop the resource safely and cleanly, according to co-author Rick Chalaturnyk, an engineering professor at the University of Alberta.

In an interview with CBC News, Chalaturnyk said "additional information needs to be collected to better understand and manage those impacts."

In the process called hydraulic fracturing, or "fracking," energy companies inject chemicals and sand deep underground to fracture the rock and free up natural gas.

A new report by a panel of 14 international experts concludes "data about potential environmental impacts are neither sufficient nor conclusive." A Talisman Energy worker is seen here walking from a shale gas drilling rig in Saint-Edouard-de-Lotbiniere, Que. (Jacques Boissinot/The Canadian Press)

That gas can leak into underground drinking water, and the report says it's not being properly monitored.

It says the government and industry have to do a better job of tracking the effects.

"For large-scale shale gas development now, I don't think you want to be in a position anymore of just saying, 'trust me, we know what we're doing.' We're past that,"  Chalaturnyk said.

The anti-shale gas protests in New Brunswick last fall are just part of the growing battle over fracking.

The report says proper research is needed to reassure Canadians who are anxious about their health and suspicious they are not getting the full story.

"There is reason to believe that shale gas development poses a risk to water resources, but the extent of that risk, and whether substantial damage has already occurred, cannot be assessed because of a lack of scientific data and understanding," the report says.

The report also draws attention to the potential risk posed by the chemicals used in the process. There's a long list of substances that are added to fracking water and their effects on human and environmental health are unknown, the report says.

"There is only minimal reference literature and no peer-reviewed literature that assess the potential for the various chemicals in hydraulic fracturing fluids to persist, migrate and impact the various types of subsurface systems or to discharge to surface waters," according to the report.

"The lessons provided by the history of science and technology concerning all major energy sources and many other industrial initiatives show that substantial environmental impacts were typically not anticipated," the report says.

"What is perhaps more alarming is that where substantial adverse impacts were anticipated, these concerns were dismissed or ignored by those who embraced the expected positive benefits of the economic activities that produced those impacts."

Former environment minister Peter Kent requested the report in response to ongoing concerns about fracking in Canada.  

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Mark Fields new Ford CEO, replacing Alan Mulally

CBC News Posted: May 01, 2014 8:44 AM ET Last Updated: May 01, 2014 8:44 AM ET

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TSX COMPOSITE

May 01, 2014 11:15 AM ET May 01, 2014 11:14 AM ET May 01, 2014 11:15 AM ET May 01, 2014 11:20 AM ET May 01, 2014 11:15 AM ET

Index	Last Trade	Change
TSX COMPOSITE	14656.40	4.53
DOW	16568.64	-12.20
NASDAQ	4134.36	19.80
SP 500	1884.85	0.90
TSX-VENTURE	1001.98	0.48

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