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Loblaw winding down third-party marketplace, focusing on pharmacy and grocery online

Loblaw ends marketplace

Photo: The Canadian Press

The Loblaws location on Carlton Street in Toronto on Thursday May 2, 2013. Loblaw Companies Ltd. is shutting down its third-party marketplace.THE CANADIAN PRESS/Aaron Vincent Elkaim

Loblaw Companies Ltd. says it's shutting down its third-party marketplace.

Spokeswoman Catherine Thomas has confirmed in a statement that the company will be winding down the marketplace.

Loblaw launched the online marketplace in late 2019 to include new vendors through its PC Express service, offering items in the baby, toy, home, kitchen and pet categories.

The company said at the time that it would offer brands like Umbra and Lennox Furniture Inc. to provide shoppers with a curated assortment of products.

Thomas says Loblaw launched its online marketplace to understand how those products could complement the company's offerings online.

She says the company has learned a lot about what customers are shopping for online, but that given the rapid change in e-commerce over the past three years, Loblaw has decided to focus on its grocery and pharmacy online shopping experiences.

Elon Musk's brain implant company Neuralink says it has US approval to begin trials in people

Brain implant trials to begin

Photo: The Canadian Press

FILE - Elon Musk departs the Phillip Burton Federal Building and United States Court House in San Francisco, on Tuesday, Jan. 24, 2023. Musk’s brain implant company Neuralink says it’s gotten permission to begin testing its device in people. The company made the announcement on Twitter Thursday, May 25, but has provided no details about a potential trial, which was not listed on the U.S. government database of trials. (AP Photo/ Benjamin Fanjoy, File)

Elon Musk’s brain implant company Neuralink says it's gotten permission from U.S. regulators to begin testing its device in people.

The company made the announcement on Twitter Thursday evening but has provided no details about a potential study, which was not listed on the U.S. government database of clinical trials.

Officials with the Food and Drug Administration wouldn’t confirm or deny whether the agency granted the approval, but press officer Carly Kempler said in an email that the FDA “acknowledges and understands” that Musk’s company made the announcement.

Neuralink is one of many groups working on linking the nervous system to computers, efforts aimed at helping treat brain disorders, overcoming brain injuries and other applications.

Earlier this week, for example, researchers in Switzerland published research in the journal Nature describing an implant that restores communication between the brain and spinal cord to help a man with paralysis to stand and walk naturally. There are more than 30 brain or spine computer interface trials underway, according to clinicaltrials.gov.

Musk – who also owns Twitter and is the CEO of Tesla and SpaceX – said last December that his team was in the process of asking regulators to allow them to test the Neuralink device.

The device is about the size of a large coin and is designed to be implanted in the skull, with ultra-thin wires going directly into the brain. Musk has said the first two applications in people would be to attempt to restore vision and try to help people with little or no ability to operate their muscles rapidly use digital devices. He also said he envisions that signals from the brain could be bridged to Neuralink devices in the spinal cord for someone with a broken neck.

After Musk made a presentation late last year about the device, Rajesh Rao, co-director of the Center for Neurotechnology at the University of Washington, said he doesn’t think Neuralink is ahead of other teams in terms of brain-computer interface achievements but is “quite ahead” in terms of the hardware in the devices.

It’s unclear how well this device or similar interfaces will ultimately work, or how safe they might be. Neuralink’s interface is considered an “investigational device” at this point, and clinical trials are designed to collect data on safety and effectiveness.

In its tweet this week, Neuralink said that it’s not yet recruiting participants for the study and will provide more information soon.

Crash of private Japanese moon lander blamed on software, last-minute location switch

Why moon lander crashed

Photo: ispace illustration

A private Japanese moon lander went into free-fall while trying to land on the lunar surface, company officials said Friday, blaming a software issue and a last-minute switch in the touchdown location.

The spacecraft belonging to the company ispace was originally supposed to land in a flat plain. But the target was changed to a crater before December’s launch. The crater’s steep cliff apparently confused the onboard software, and the 7-foot (2-meter) spacecraft went into a free-fall from less than 3 miles (5 kilometers) up, slamming into the lunar surface.

CEO and founder Takeshi Hakamada said the company is still on track to attempt another moon landing in 2024, and that all the lessons learned will be incorporated into the next try. A third landing attempt is planned for 2025.

If successful, ispace would have been the first private company to successfully land a spacecraft on the moon. Only three governments have achieved that: Russia, the United States and China. An Israeli nonprofit tried in 2019, but its attempt also ended in a crash landing.

Named Hakuto, Japanese for white rabbit, the spacecraft and its experiments were insured, according to Hakamada. The United Arab Emirates had a mini lunar rover on board that was lost in the crash.

McLeod Lake Indian Band, Mitsubishi Power working on $5B hydrogen project

$5B hydrogen project

Photo: McLeod Lake Indian Band

The McLeod Lake Indian Band is exploring the development of Canada’s largest hydrogen project.

The proposed project would be located at the Kerry Lake East Indian Reserve, about 80 km north of Prince George, and is expected to cost more than $5 billion to build, a statement released by the band on Thursday said.

“We are very excited about this project’s potential and by Mitsubishi Power's intent to partner with us,” Chief Harley Chingee said. 

“We have made quick progress in less than a year towards a project that will provide jobs and sustainable revenue for the McLeod Lake people for decades to come and help meet overseas demand for clean Canadian hydrogen. We are working closely with Mitsubishi Power Americas which is developing a number of hydrogen hubs in the United States, including a utility-scale clean hydrogen hub already under construction in Utah.”

The project concept calls for the production of ‘green hydrogen’ – derived from non-fossil fuel sources – and ‘blue hydrogen’ produced from natural gas, while storing the carbon dioxide emitted. Ammonia production is also anticipated to be part of the development.

“The Tse’khene Energy Transition Hub is ideally suited for the development of large-scale industrial development,” project CEO Dave LaVallie said. “The site is proximal to all the required infrastructure for clean energy export projects.”

Chingee met with Premier David Eby and B.C. Energy Minister Josie Osborne in Victoria on May 3 to brief them about the proposed project, the band statement said. The band has been working with the Ministry of Energy, Mines and Low Carbon Innovation and the BC Energy Regulator on a draft memorandum of understanding respecting the project.

Talks with BC Hydro are ongoing, as are discussions with interested investors, customers, and additional partners, while technical work on the project feasibility is ongoing.

“We have a long way to go to make this project a reality, but the concept is less than one year old, and we are moving quickly,” Chingee said. “We are talking with several other major energy infrastructure companies who are interested in partnering or becoming customers.”

After yearslong delay, DEA revokes license of wholesale drug distributor over opioid crisis failures

'Cavalier disregard' of crisis

Photo: The Canadian Press

The U.S. Drug Enforcement Administration stripped one of the nation's largest drug distributors of its license to sell highly addictive painkillers Friday after determining it failed to flag thousands of suspicious orders at the height of the opioid crisis.

The action against Morris & Dickson Co. that threatens to put it out of business came two days after an Associated Press investigation found the DEA allowed the company to keep shipping drugs for nearly four years after a judge recommended the harshest penalty for its “cavalier disregard” of rules aimed at preventing opioid abuse.

The DEA acknowledged that the time it took to issue its final decision was “longer than typical for the agency” but blamed Morris & Dickson in part for holding up the process by seeking delays due to the COVID-19 pandemic and its lengthy pursuit of a settlement that the agency said it had considered. The order becomes effective in 90 days, allowing more time to negotiate a settlement.

DEA Administrator Anne Milgram said in the 68-page order that Morris & Dickson failed to accept full responsibility for its past actions, which included shipping 12,000 unusually large orders of opioids to pharmacies and hospitals between 2014 and 2018. During this time, the company filed just three suspicious order reports with the DEA.

Milgram specifically cited testimony of then-president Paul Dickson Sr. in 2019 that the company’s compliance program was “dang good” and he didn’t think a “single person has gotten hurt by (their) drugs.”

“Those statements from the president of a family-owned and operated company so strongly miss the point of the requirements of a DEA registrant,” she wrote. “Its acceptance of responsibility did not prove that it or its principals understand the full extent of their wrongdoing ... and the potential harm it caused."

Shreveport, Louisiana-based Morris & Dickson traces its roots to 1840, when its namesake founder arrived from Wales and placed an ad in a local newspaper selling medicines. It has since become the nation's fourth-largest wholesale drug distributor, with $4 billion a year in revenue and nearly 600 employees serving pharmacies and hospitals in 29 states.

In a statement, the company said it has invested millions of dollars over the past few years to revamp its compliance systems and appeared to hold out hope for a settlement.

“Morris & Dickson is grateful to the DEA administrator for delaying the effective date of the order to allow time to settle these old issues,” it said. “We remain confident we can achieve an outcome that safeguards the supply chain for all of our healthcare partners and the communities they serve.”

Morris & Dickson’s much larger competitors, a trio of pharmaceutical distributors known as the Big Three, have already agreed to pay the federal government more than $1 billion in fines and penalties to settle similar violations. Cardinal Health, AmerisourceBergen and McKesson also agreed to pay $21 billion over 18 years to resolve claims as part of a nationwide settlement.

While Morris & Dickson wasn’t the only drug distributor who the DEA accused of fueling the opioid crisis, it was unique in its willingness to challenge those accusations in the DEA’s administrative court.

In a scathing recommendation in 2019, Administrative Law Judge Charles W. Dorman said Morris & Dickson’s argument that it has changed its ways was too little, too late.

Anything less than the most severe punishment, the judge said, “would communicate to DEA registrants that despite their transgressions, no matter how egregious, they will get a mere slap on the wrist and a second chance so long as they acknowledge their sins and vow to sin no more.”

But as the ensuing years passed, neither the Biden-nominated Milgram nor her two predecessors took any enforcement action. Past DEA officials told the AP such decisions usually take no more than two years.

As the pills kept flowing, Morris & Dickson attempted to stave off punishment, appealing directly to Milgram to order a reopening of the proceedings, arguing it would introduce new evidence showing it had implemented an “ideal” compliance program with the help of a consultant who is now second-in-command at the DEA, Louis Milione. The DEA said that Milione has recused himself from all agency business related to Morris & Dickson.

Milione retired from the DEA in 2017 after a 21-year career that included two years leading the division that controls the sale of highly addictive narcotics. Like dozens of colleagues in the DEA’s powerful-but-little-known Office of Diversion Control, he went to work as a consultant for some of the same companies he had been tasked with regulating.

Milione was hired by Morris & Dickson in 2018 as part of a $3 million contract and later testified that the company “spared no expense” to overhaul its compliance systems, cancel suspicious orders and send daily emails to the DEA spelling out its actions.

A footnote of the DEA’s order Friday said that since Milione returned to the DEA as principal deputy administrator in 2021, he has not had any contact with Milgram or other agency staff about the Morris & Dickson case due to his prior involvement with the company.

Virgin Galactic completes final test flight before launching paying customers to space

Ready for space tourism?

Photo: Virgin Galactic

Virgin Galactic completed what is expected to be its final test flight Thursday before taking paying customers on brief trips to space, marking what the space tourism company described as a “fantastic achievement” in what has been a long road to commercial operations.

Six of the company's employees, including two pilots, landed at Spaceport America in southern New Mexico after the short up-and-down flight that included a few minutes of weightlessness. It took about an hour for the mother ship to carry the spaceplane to an altitude of 44,500 feet (13,563 meters), where it was released and fired its rocket motor to make the final push.

“Successful boost, WE HAVE REACHED SPACE!” Virgin Galactic tweeted.

It reached an altitude of 54.2 miles (87 kilometers) before gliding back down to the runway, according to the company.

Jamila Gilbert, who grew up in southern New Mexico and leads the company's internal communications, was among those on board who were evaluating what it will be like for paying customers.

It was hard for her to put the experience into words, saying it probably will take a lifetime to process the sights and the feelings that filled those moments between the rocket igniting and the spaceship reaching its highest point.

“It was just this magnetic pull,” she said in an interview. “Once I started looking out, I could feel that I was floating. I could hear voices. But I couldn’t stop looking at the planet, and I couldn’t look away.”

Fellow crew member Christopher Huie said it seems as if everything stopped when the spaceship was released from the carrier plane.

“You’re just waiting for the rocket to light," said Huie, an aerospace engineer. "And I think that moment had so much anticipation, and I could have lived in that moment forever.”

Then came a little jostle with the firing of the rocket, and the crew were pinned to their seats as the G-forces kicked in.

The flight came nearly two years after founder Richard Branson beat fellow billionaire and Amazon founder Jeff Bezos and rocket company Blue Origin into space. Bezos ended up flying nine days later from West Texas, and Blue Origin has since launched several passenger trips. Federal aviation authorities banned Virgin Galactic launches after Branson's flight to investigate a mishap.

Virgin Galactic has been working for more than a decade to send paying passengers on short space hops and in 2021 finally won the federal government's approval.

The next step will be for Virgin Galactic to analyze data from Thursday's flight and inspect the planes and other equipment as the company prepares for commercial service, possibly as soon as late June.

Virgin Galactic CEO Michael Colglazier has acknowledged the delays and missed deadlines over the years. But on Thursday, he said seeing the crew's reactions after landing gave him confidence in what the company has built so far.

The initial commercial flight will include members of the Italian Air Force who will conduct experiments. Next will come customers who purchased tickets years ago for their chance at weightlessness aboard a winged spacecraft that launches from the belly of an airplane.

About 800 tickets have been sold over the past decade, with the initial batch going for $200,000 each. Tickets now cost $450,000 per person.

Virgin Galactic has reached space five times since 2018 and will be aiming for 400 flights per year from Spaceport America once it finishes building its next class of rocket-powered planes at a facility in neighboring Arizona.

After Branson’s trip, the Federal Aviation Administration grounded flights as it investigated a problem that caused the rocket ship to veer off course during its descent back to its runway in the New Mexico desert. Virgin Galactic insisted at the time that Branson and others were never in any danger.

The company made changes to its carrier airplane and the spaceplane. The delay was nearly twice as long as expected, partly because of supply chain issues and labor shortages.

Branson joined a group of customers who watched Thursday's flight from Spaceport America.

Huie, a senior manager with Virgin Galactic's flight sciences engineering team, said the company is ready for commercial service and will be expanding its fleet over the coming years.

“We’re looking to scale up in a big way," he said, "and the goal is to populate lots of spaceports with lots of spaceships and motherships and send hundreds of people every year to space.”

Spring flood risks highlight lack of insurance for Canadian homeowners

Covered in case of flood?

Photo: The Canadian Press

Flooding on the Bonaparte River in Cache Creek earlier this month.

As the spring season brings higher flood risk to Canadians, as seen in British Columbia recently, experts say many homeowners remain without adequate insurance to cover extreme weather’s damage to their homes.

“I would say that Canadians in general are not truly aware of the risks that their homes are exposed to, and the exposure they have to extreme weather events and the potential losses they could experience,” said Michelle Laidlaw, associate vice-president of The Co-operators Group Ltd.’s national product portfolio.

Flooding is the biggest under-insured climate risk in Canada, said Victor Adesanya, vice-president of insurance at DBRS Morningstar, especially during the spring thaw. IBC said more than 1.5 million households in Canada are “highly exposed” to flood risk.

In comparison, as wildfires in Alberta have forced evacuations and filled the skies with smoke, the Insurance Bureau of Canada said standard homeowner's insurance covers fire damage as well as the costs of mass evacuations.

Storm surge is another big under-insured risk, said Nadja Dreff, senior vice-president and head of Canadian insurance also at DBRS Morningstar. The Atlantic is at particularly high risk of storm surge, which tends to be in the aftermath of hurricanes or other such storms, said Adesanya.

The risks for these two events are only growing with climate change, said Dreff.

“There is very much a need for this coverage. And yet, we still haven't gotten to that level where we can say the insurance sector completely is able to cover all the risks,” she said.

IBC has said overland flood coverage for damage from overflowing bodies of water is generally only covered with an add-on to insurance plans. It may not even be available if you live in a known flood plain, it said.

Home and business insurance policies also don’t normally cover coastal flooding or storm surge flooding, IBC said, which means damage from rising water levels and waves caused by storms is generally not covered.

But some of the biggest damage can come from these kinds of events, as illustrated by hurricane Fiona, which hit homes in Atlantic Canada last fall. According to the IBC, severe weather caused $3.1 billion in insured damage in Canada in 2022, with Fiona costing $800 million.

“Incidents of extreme weather, including flooding, they've become more sudden, more frequent and more severe. And so what we're seeing is an increase in pricing, an increase in the cost of insurance for Canadians,” said Laidlaw.

Cooperators is the only insurance company that provides storm surge coverage for all Canadians, and not just those at lower risk, she said.

Right now, around 80 per cent of Cooperators’ clients are covered for storm surge, but there’s lower uptake in higher-risk areas, said Laidlaw. For example, she said only 60 per cent of Cooperators’ clients in Atlantic Canada are covered for storm surge.

That might seem counter-intuitive, but it’s likely because insurance premiums are based on risk, said Laidlaw.

“Where we see the highest risk, you will also see the highest premium,” she said.

Laidlaw said it’s possible there will be an uptick in interest among higher-risk homeowners as they rebuild from Fiona’s damage, but that hasn’t happened yet.

Meanwhile, the federal government has promised to stand up a low-lost national flood insurance program, “aimed at protecting households at high risk of flooding and without access to adequate insurance.” The latest federal budget announced $31.7 million over three years for the creation of the program, beginning in 2023-24.

“They’re trying to fill a gap that’s existed for a while now,” said Adesanya, though it’s not yet clear what form the program will take.

There are programs in other countries that give insight into what kinds of models are possible, said Adesanya. For example, the U.S. national flood insurance program is government-driven, while in the U.K. it’s industry-driven, with risk shared across insurance companies, he said.

The federal budget said the program would include offering reinsurance through a federal Crown corporation as well as a separate insurance subsidy program.

IBC has been advocating for such a program, and said it is expected to help speed up recovery and rebuilding in flooded communities as well as reduce unplanned disaster costs for the federal government.

“Its implementation is the single most important step Canada can take to better prepare for the impacts of climate change,” the organization said in a press release.

Lululemon promises 2,600 new jobs after exemption from some immigration rules

2,600 new jobs promised

Photo: The Canadian Press

Lululemon CEO Calvin McDonald, left, Minister of Innovation, Science and Industry, Francois-Philippe Champagne, centre, and Minister of Immigration, Refugees and Citizenship Sean Fraser arrive for a news conference at the company's headquarters, in Vancouver, on Thursday, May 25, 2023. The company has received a waiver from immigration rules restricting access to foreign workers as it expands its global headquarters, with plans to hire 2,600 additional workers over the next five years. THE CANADIAN PRESS/Darryl Dyck

Vancouver-based company Lululemon says it will expand its headquarters in the city and create 2,600 jobs over the next five years.

The announcement comes months after the federal government granted the company the ability to hire foreign workers for certain highly skilled positions, including management jobs, software engineers and computer technicians, without needing to apply for a labour market impact assessment.

Federal Innovation Minister François-Philippe Champagne says if Ottawa hadn't acted, the company's headquarters may have left Vancouver.

CEO Calvin McDonald says Lululemon has secured an additional 125,000 square feet of office space in downtown Vancouver because of the confidence it has in the agreement.

A labour market impact assessment is a process sometimes used to determine if a company needs a foreign worker to fill a position because of a lack of Canadian workers or permanent residents available to do the job.

Immigration Minister Sean Fraser says Canada won't be able to meet the domestic needs of the economy with an exclusively domestic labour force and the entire world is competing for talent.

The sharpest tool in the shed: How Lee Valley built a cult-like following

Lee Valley's cult following

Photo: Lee Valley Tools

Robin Lee knows what you’re thinking as he plucks an item from the shelf of his family-owned store in suburban Ottawa: This product seems a bit, well, stupid.

The CEO of Lee Valley Tools goes one step further: “Stupidest thing ever” is how he describes his first impression of the Wingman, a plastic dragonfly on a wire that’s designed to be clipped to your hat, wobbling absurdly overhead and purportedly repelling deer flies and horseflies. It seems fishy; it looks ridiculous.

But Lee Valley will sell it to you (for $13.90 plus tax) because it’s one of several oddball gadgets whose unexpected utility the retailer swears by. Its catalogue—highly anticipated by many customers for its articulate copy and surprising array of products—describes the Wingman as “a simple, effective alternative to the arm-flailing method of shooing away” the pests, assuring readers it was “tested in Ontario cottage country.” Lee is the unnamed tester; his is the cottage.

The Wingman is a perfect example of how Lee Valley has evolved over its 45 years, branching out from its origins as a mail-order purveyor of woodworking tools. The company still sells thousands of those tools, many of which it manufactures through its Veritas brand, a cornerstone of the business. But as time has passed, the product assortment has expanded—into other work-with-your-hands categories such as gardening and cooking, but also in some surprising ways. If you’re in the market for a box-maker’s plow plane or a mortise chisel, Lee Valley has it. Also, there’s a doohickey for squeezing toothpaste out of its tube.

On paper, this should not work.

“If you walked in cold off the street, you’d go, ‘What the heck are these people about?’” Lee acknowledges.

Lee Valley is part serious tool shop—catering to the kind of folks who appreciate having the choice of more than two dozen varieties of sharpening stone—part high-end cooking and gardening store, and part random potpourri of SkyMall-ish merchandise. In many of its product categories, it’s not the biggest, the fastest or the cheapest option. And it’s positively dwarfed by competitors like Home Depot, Canadian Tire and Amazon.

But Lee Valley has built itself a niche, with 18 stores across the country, an e-commerce operation that accounts for roughly 50% of its sales, and more than $100 million in annual revenue from the retail operations alone, not counting its manufacturing business.

Significant challenges still lie ahead, however. Lee Valley’s leadership is evaluating the future of its store network, which has gaps—including in Canada’s largest city, where skyrocketing rents forced the closure of two of its three locations in the past couple of years. The company must make sizable investments to modernize its manufacturing operations. And it’s grappling with how to remain relevant, not just as people’s shopping habits change, but as it seeks to appeal to newer, greener customers who may find the array of tools more intimidating than inspiring.

“We are an editor for the customer,” Lee says, referring both to how the company selects products and the tone it uses to recommend them to the right users. He references the friendly neighbour on the ‘90s sitcom Home Improvement, who dispensed advice and a bit of philosophy to Tim “The Tool Man” Taylor over the fence. “We’re Wilson.”

Lee Valley sells roughly 24,000 products—and many of them have to pass muster with Robin Lee himself, whether they come from the company’s own tool-making operation or from other manufacturers. The retailer adds new items every couple of weeks, which the product team pitches to Lee in a process the company’s president and chief operating officer, Jason Tasse, compares to Dragons’ Den.

Lee, 60, has spent most of his life refining his understanding of what works for Lee Valley. In 1976, his parents, Leonard and Lorraine, decided to try selling cast-iron stove kits out of their home in Ottawa’s Westboro neighbourhood. For Leonard, a civil servant looking to strike out on his own, it was a test run to gauge the viability of a mail-order business. Robin, then still a teenager, would grind the castings to remove excess bits of metal and then pack the stoves for shipping.

Lee Valley was launched in 1978 as a catalogue selling woodworking tools. Leonard got his start by partnering with Garrett Wade, a New York–based purveyor of similar catalogues. Owner Garry Chinn shared artwork for print and wrote to his product suppliers guaranteeing the fledgeling company’s invoices. (Mr. Chinn still owns a small percentage of Lee Valley and sits on the advisory board.)

But from the start, the operation was a family affair. Whenever someone called the company number, a phone in the Lee kitchen rang. After the 1981 postal strike just about put them out of business, demonstrating the necessity of brick-and-mortar stores, Robin built the very first showroom. (It was his summer job.) “The showroom model kind of mirrored the catalogue,” says Tasse, a 25-year veteran of the company who started out working in the warehouse. It remains the same today: Stores mostly display product samples, which customers can purchase by filling out an order—either on paper, by mobile phone or at a computer station. A staffer then fetches their items from the back.

As Lee Valley grew, Leonard Lee wanted to be more involved in the design of its tools and to incorporate customers’ feedback. The company launched a manufacturing arm, now called Veritas, in 1985, which operates in a facility just down the road from its Ottawa store and makes about 1,200 tools, hardware and gardening products both for Lee Valley stores and for export to more than 90 countries. About one-quarter of the products the stores sell are manufactured in-house. Veritas launches new items all the time; Robin Lee estimates there are currently more than 200 products in the queue waiting to be introduced, including a new set of bench rules, a hacking knife, a dowelling jig and a saw for cutting the fret slots on a guitar neck. “It’s a very tight connection between the retail arm and the manufacturing,” he says. “Let’s say you buy an electric drill from Home Depot, and you go back and say, ‘Here’s what’s wrong with it.’ The drill manufacturer never hears it. There’s no effective feedback loop…Whether they outsource or they do it internally, I think that’s a good strategy for many retailers—to have not just a house brand, to not just put your name on somebody else’s product, but to do the design work.”

When it comes to products sourced from outside the company—whether it’s a new garden pail or a quirky gift item—staff must convince Lee that the product solves a problem, represents good value and quality, and is something shoppers can’t find everywhere. (The Wingman is an exception to the latter rule: Amazon, Canadian Tire and a number of outdoor-supply stores will also sell you this backcountry fascinator.)

Still, it’s a delicate balance between solving problems and needing a tool for absolutely everything. While the serendipity of the product selection can be entertaining, it also begs the question: Does one really need tongs specifically for fishing toast out of the toaster? Or a paper plane launcher? Or a reflective sheet to warm your rear end while sitting around a campfire?

“We want you using this stuff,” Lee says. “These are tools that are going to be good. They have a utility and a value, which we will make clear to you. And you decide whether it applies to you or not.”

There’s a story behind the rasp. Of course there is—for a catalogue company like Lee Valley that prides itself on good copy, there’s always a story to be told. The microplane that does a real number on your lemon zest and your parmesan cheese, wouldn’t you know it, started off as a surgical tool for shaving bone (appetizing!) and for woodworking. After Robin Lee found it at a trade show in Chicago in the 1980s, his mother picked it up, figuring it might do the trick for zesting oranges. It became a kitchen favourite. The catalogue told the story—with Lorraine making an appearance as “a Lee Valley woodworker’s wife”—and soon the manufacturer called to ask what the heck was going on: Lee Valley was selling tens of thousands of the things.

The tone of the Lee Valley catalogue began with Leonard Lee, whose salesmanship included a tongue-in-cheek blurb casting the user of a long-handled trowel as the “lord of the manor.” Robin is particular about carrying on that legacy and still edits every bit of copy before it hits the page. “I ban words,” he says. (Recent outcasts that were hammered into semantic saturation with overuse: “exceptional” and “essential.”)

The voice Lee Valley has cultivated over more than four decades is deliberate: knowledgeable, not know-it-all. “Conservative but modest advice,” Tasse says.

“But also to be literate and not talk down to people,” Lee says.

The people Lee Valley speaks to are changing. The company’s core customers like working with their hands. Management has even given them personas: Earl, an old shop teacher, and Heather, a middle-aged gardener. But its newer customers fit a different profile. “We’ve got to be more about teaching gateway skills to different customers—not the 50-year-old woodworker, but somebody who never took shop class in high school or grade school, as most people don’t,” Lee says. “Now, a beginner isn’t 16 years old. A beginner is 35 or 40.”

Lee Valley has responded by focusing more on inspiring beginners, including with an ad campaign that emphasized failure as part of the learning process. It has also introduced “Make it Yourself” boxes inspired by meal kits, giving customers all the tools and materials to try out carving a wooden spoon, for example, or building a bird feeder.

There are other ways Lee Valley is seeking to modernize. A few years ago, it began overhauling its digital operations, including making a major investment in its website. E-commerce became a lifeline when the pandemic hit and digital sales became everything. But Lee Valley still took a major blow, with store closures eliminating half its sales at the worst possible time. It had just placed all its Christmas orders in January and February, and found itself in a cash crunch, forced to lay off 7% of its workforce across the retail and manufacturing operations. “We just had the rug pulled out from under us. And when you go to the bank, they say, ‘Retail—that’s going to be a big problem. We don’t want to invest in you,’” Lee says. “It’s as if the previous 40 years didn’t count.”

The company was able to recover by leaning on digital sales and benefitted greatly when locked-down Canadians began spending money on home improvement projects and hobbies to stay busy. Having always done store pickups for online orders—and with staff already fully trained in retrieving product from the back—Lee Valley was able to pivot quickly to curbside service, staying closed out of caution (or opening by appointment only) for some time even after hardware stores were categorized as essential retail.

Those online sales, and customers’ loyalty, “saved our bacon,” Lee says. For a time, though, he feared the second generation running Lee Valley might be its last. “We were closer than anybody knows to closing the doors permanently,” he says.

Lee Valley doesn’t work like other companies. Leonard Lee used to tout the fact that over the decades, the business had never had layoffs. Because of the pandemic, that’s no longer true. “It was tough,” Robin Lee says. “But there was some learning in there, too.”

For example, management realized that its resistance to layoffs wasn’t always a good thing. While employees appreciate loyalty, Tasse says, some were frustrated by the retailer’s tendency to hold on even to non-performers. With staffing levels now back up to pre-pandemic norms—about 1,000 employees—Lee and his team are working on managing their people differently. That means shedding the less formal approach of the past and introducing more career development discussions; skip-level meetings where staff have the chance to meet with managers above their direct supervisor; and better succession planning across roles, to ensure they’re identifying talent to take over when others leave. That also means better record keeping so that long-time staff don’t take all their institutional knowledge with them into retirement.

Some of the old ideas still apply, however. The founder always had a policy that the highest-paid employee at Lee Valley would never earn more than 10 times the wage of the lowest-paid person on staff, a rule that remains in place today. To put that in context, the 100 highest-paid CEOs in Canada took home 243 times the pay of the average Canadian worker in 2021, according to research by the Canadian Centre for Policy Alternatives—a gap that has widened considerably in recent years.

Other core tenets have changed. Lee Valley used to distribute one-quarter of its pre-tax profit among the staff. During his time as a warehouse worker, Tasse remembers that if a worker dropped something, the joke was to call out, “profit share”—as in, the cost of that broken item is coming out of our pockets. As the business got bigger, though, that message got lost, the executives say. They made the decision to increase core salaries rather than pay out bonuses tagged to profits, which left staff not knowing how much they could rely on. (Lee says there were some lean years when he fudged the number to make it look better.)

“We’re now tracking progress to a living wage,” Tasse says, adding the company pays a premium over minimum wage. It used to be about 30%, but that has narrowed slightly as provinces have raised their minimum wage levels. Still, Lee adds, “We don’t want it to be a little bit above minimum; we want it to be significantly above.” These efforts have helped the company build a workforce filled with long-timers. “I hand out 25-year certificates and awards every week,” he says.

With the turbulence of the pandemic behind it, Lee Valley is evaluating what its future should look like. A big part of that is its store network. “When they started back in the ‘70s, the market was not as urbanized,” says Wendy Evans, a retail expert and president of Evans & Co. Consultants. “As the market has evolved, they’ll have to rethink their location strategy.”

Photo: Globe and Mail

Many of Lee Valley’s stores are in suburban, and in some cases industrial, areas. The assumption was the customer would drive to them, so they went where the rent was cheap. Now, Lee says, the customer is changing, and the retailer is analyzing where there are gaps. One of them is in Toronto, where management is looking hard for new locations after shuttering two stores. (The last one left is in the suburb of Vaughan—a great stopping point for people on their way to cottage country, but hardly a lure for downtowners.)

As they look to more central locations, stores will likely become smaller, with a more selective number of items. But if customers want endless choice, they’re probably picking up their phones rather than driving to Lee Valley anyway—Lee himself says he turned to Amazon recently when he needed a specific size of bolt. It took a few clicks, the price was good, and he had it the next day.

“The trick is, why do people want to come to our store?” he says. It might be to take a woodworking class, to get that neighbourly Wilson advice, or to get a kick from browsing through bug catchers, an old-timey mariner’s weather glass or etched-steel plates for measuring butter. One thing is clear: “It’s not going to be for the bolt.”

It’s not just the stores Lee Valley is trying to modernize. Next door to its Ottawa headquarters, in the Veritas machine shop, a senior manufacturing employee named Rob is standing next to a bright-yellow robot arm, training it to pick up tenon cutters and put them into a lathe. “I’ve worked on equipment like this since 1993, but this is the first time I’m using it with a robot,” Rob says, adding the training process can be a bit of a challenge. “This guy has a bit of an attitude. He will only do one thing—or she will only do... Anyway, they do their job very well.”

Investing in this kind of efficiency is a priority for Veritas. Those tenon cutters are frequently on back order, Lee says, and this is exactly the kind of unskilled, repetitive job he wants to automate, freeing up humans for tasks that require judgment and flexibility. “Continuing to make more products in Canada, and continuing to employ more people, not fewer—that’s critical,” he says.

Lee Valley is also saddled with machinery that’s now 25 or 30 years old and on its last legs—and running at half the speed of new models. The company has poured $12 million into the machine shop in the past three years and recently converted a building next door into a second machine shop to accommodate newer equipment and growing operations. “Our big, audacious goal is over 100 years of sustainable growth,” Lee says.

But to get to a century, Lee will have to ensure the business successfully changes hands from one generation to the next. The company has already done it once. Robin Lee took over as CEO in 2002, after more than two decades in a variety of roles (interrupted only by his time at the University of Waterloo, where he earned a degree in systems design engineering and worked as a co-op student at IBM). As technology became a bigger part of the business—”Dad was not an internet guy”—and Leonard decided he wanted to focus more on the medical instruments company he launched in 1998, he decided to hand over the reins. Leonard remained involved in designing new tools, and he also ran a hardware store in the town of Almonte, Ont., as vascular dementia reduced the work he could take on. He died in 2016. (Lorraine still lives on their 75-acre spread, cutting the grass and driving the tractors at the age of 84. Do-it-yourselfing clearly runs in the family.)

Lee stepped into the CEO role with a vast array of experience across the company, and he has a background in product design and tool development his children don’t have. “But they will be skilled at other things,” he says. The Lees are very much a presence at Lee Valley: Robin’s wife, Lucie Robitaille, is chief customer officer. Daughter Annick Robitaille-Lee is divisional merchandising manager in charge of gardening, and son Philippe Robitaille-Lee is marketing content manager. (Tasse, 49, also worked closely with the senior Mr. Lee and has been around so long that Robin sometimes jokingly calls him “one more Lee.”)

What Lee Valley faces in the coming years is something many Canadian companies are grappling with: Six out of 10 businesses will change hands in the next decade as boomers retire, and keeping family businesses in the family is getting increasingly difficult. Lee Valley recently acquired two U.S. tool manufacturers when the second generation didn’t want to take over.

Robin Lee says he’s committed to passing the family business on to the third generation. “We could sell it a million times over, but I wouldn’t want to watch what it became,” he says, adding that he receives offers regularly. “I could see XYZ accounting firm coming in here and saying, ‘Cut this and this, and change this,’ and kill the golden goose.”

And he’s not stepping away any time soon—Lee jokes that his retirement plan is Freedom 85. “It’s not about money; it’s about your life and what you enjoy doing,” he says. “Also, when your name is on the building, it matters what happens under your name.”

He smiles.

“There’s a little bit of a trap there.”

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Ford electric vehicle owners to get access to Tesla Supercharger network starting next spring

Ford to access Tesla network

Photo: The Canadian Press

FILE - Ford's chief executive eEngineer Linda Zhang unveils the Ford F-150 Lightning on May 19, 2021, in Dearborn, Mich. All of Ford Motor Co.'s current and future electric vehicles will have access to about 12,000 Tesla Supercharger stations starting in 2024, according to an announcement Thursday, May 25, 2023, by Ford CEO Jim Farley and Tesla CEO Elon Musk. (AP Photo/Carlos Osorio, File)

All of Ford Motor Co.'s current and future electric vehicles will have access to about 12,000 Tesla Supercharger stations in the U.S. and Canada starting next spring.

Ford CEO Jim Farley and Tesla CEO Elon Musk announced the agreement Thursday during a “Twitter Spaces” audio chat.

“We think this is a huge move for our industry and for all electric customers,” Farley said.

Musk said he didn't want Tesla's network to be a “walled garden” and that he wants to use it to support sustainable transportation.

“It is our intent to do everything possible to support Ford and have Ford be on an equal footing at Tesla Superchargers,” Musk said.

Farley said there will be a cost to Ford owners, perhaps a monthly subscription, but he didn't give specifics. Details of any financial arrangement between Ford and Tesla were not announced.

At first, Ford's current electric vehicles will need an adapter to hook into the Tesla stations, which have their own connector. But Ford will switch to Tesla's North American Charging Standard connector with its second-generation EVs starting in 2025, Farley said.

Ford said Tesla's connector is smaller and lighter than those in use by other automakers.

Farley said Tesla's Superchargers have great locations.

“We love the locations. We love the reliability,” he said. They will join Ford's own Blue Oval charging network which has about 10,000 fast-charging stations, he said.

Ford EV owners will be able to access the Tesla chargers seamlessly with Ford's app, Musk said.

Tesla has about 17,000 Supercharger stations in the U.S. There are about 54,000 public charging stations in the U.S., according to the Department of Energy, but many charge much more slowly than the Tesla stations.

The Ford-Tesla deal is separate from a plan to open part of Tesla’s charging network to all EVs.

The White House announced in February that at least 7,500 chargers from Tesla’s Supercharger and Destination Charger network would be available to non-Tesla electric vehicles by the end of 2024.

The chat between Musk, who last fall bought Twitter for $44 billion, and Farley came off without the embarrassing technical glitches that plagued Florida Gov. Ron DeSantis’ announcement Wednesday that he was running for president.

With Musk, DeSantis released the news that he would seek the Republican nomination, but the chat was delayed by glitches for nearly a half hour. Musk blamed it on straining of servers because so many were trying to listen in.

The Farley-Musk chat had a much smaller audience, than DeSantis, about 18,000 listeners at the start.

The number on the DeSantis chat topped out at 420,000, far from the millions who have watched televised presidential announcements. After the problems were fixed, the audience remained under 500,000.

Twitter's launch of DeSantis' presidential bid underscores platform's rightward shift under Musk

Twitter's rightward shift

Photo: The Canadian Press

FILE - A sign at Twitter headquarters is shown in San Francisco, Dec. 8, 2022. While shaky and skewered by critics, Twitter’s forum for Florida Gov. Ron DeSantis to announce his presidential run nevertheless underscored the platform’s unmistakable shift to the right under new owner Elon Musk. (AP Photo/Jeff Chiu, File)

Two years ago, signing a bill intended to punish Twitter and other major social media companies, Florida Gov. Ron DeSantis blasted the platforms as "suppressing ideas” during the COVID-19 pandemic and silencing conservative voices.

What a turnaround.

The new Elon Musk-owned version of Twitter helped DeSantis launch his bid for the Republican presidential nomination Wednesday. Though it was marred by technical glitches and skewered by the candidate's critics, the forum nevertheless underscored Twitter's unmistakable shift to the right under Musk, who bought it for $44 billion and took over in October.

“The truth was censored repeatedly, and now that Twitter is in the hands of a free speech advocate, that would not be able to happen again on this Twitter platform,” DeSantis said during the Twitter Spaces event.

Musk, co-hosting the event, responded to the praise by saying, “Twitter was indeed expensive, but free speech is priceless.”

While Musk has promoted his platform as a haven for free expression, the site has been flooded with extremist views and hate speech since he bought it and fired or laid off roughly 80% of its staff.

That is raising alarms that Twitter — heavily used by candidates and government agencies, including those providing voting information — will become an open forum for conspiracy theories, fake content and election misinformation as a bitterly divided country heads into the 2024 presidential election.

Many Republicans have hailed Musk's takeover of Twitter as creating one of the last mainstream online spaces where they can share their views without fear of removal. Prominent figures in conservative media, like former Fox News host Tucker Carlson and the podcasts hosts of The Daily Wire, say they plan to start streaming content on the site.

Democrats and anti-hate watchdogs, meanwhile, say Musk's partisan comments and policy changes have effectively given a megaphone to far-right extremists.

Since Musk bought Twitter, he has overhauled the site’s verification system, removing safeguards against impersonation for some government accounts and political candidates. He also has personally indulged in far-right conspiracy theories on the site, reinstated accounts with a history of extremist rhetoric and gutted the team that had been responsible for moderating the content flowing across the platform.

That has coincided with a deluge of conspiracy theory rhetoric, according to the Anti-Defamation League, which reported that QAnon hashtags surged 91% on Twitter between May 2022 and May 2023, with about three-fourths of those messages posted after Musk's takeover.

Several believers of the baseless QAnon theory, centered on the idea that former President Donald Trump is waging a secret war against “deep state” enemies and pedophiles, have committed acts of violence, including the attack on the U.S. Capitol on Jan. 6, 2021.

Musk’s decision to reinstate influential Twitter accounts with a history of spreading extremist views also has created spaces in their tweet reply threads where users are sharing antisemitic tropes, conspiracy theories and other types of hate, the ADL reported Wednesday.

The group's vice president Yael Eisenstat, who leads its Center for Technology and Society, said Musk’s content moderation choices have “served to silence marginalized voices” by giving harassers and internet trolls free reign.

“It is one thing to say we want free speech on the platform,” she said. “It’s another thing to say we are going to allow extremists — conspiracy theorists — to contribute to normalizing this kind of rhetoric and antisemitism and racism.”

Twitter didn’t provide comment after repeated requests. It sent automated replies instead, as it does to most media inquiries.

Musk's free speech rhetoric also has attracted conservatives who have been knocked off other platforms — or fired, in the case of Carlson.

Shortly after his ouster, Carlson went on Twitter May 9 to announce that he would be doing some version of his show on that platform. It’s still not clear what that would entail, or when he would start.

“There aren’t many platforms left that allow free speech,” Carlson said in a two-minute message viewed more than 132 million times. “The last big one remaining in the world, the only one, is Twitter, where we are now."

Free speech and truth aren’t the same thing, however, and Carlson had been accused of spreading misinformation on his Fox show, most recently about the Jan. 6 Capitol insurrection.

DeSantis has been a frequent guest on Fox News, and on the night of his presidential campaign announcement he appeared on the network for an interview — after the Twitter event.

Though DeSantis' Twitter launch was severely delayed with site crashes and strained servers, his choice to debut his campaign on the platform illustrates that Fox will have more competition as a Republican kingmaker. His campaign said it had taken in $1 million online in the first hour after the announcement. Fox's ratings have declined dramatically during its 8 p.m. Eastern hour, which Carlson used to fill.

The Daily Wire, whose podcast hosts include popular conservative influencers such as Ben Shapiro and Candace Owens, said Tuesday that it would bring its shows to stream on Twitter starting next week.

At the same time, Wednesday's botched live event with DeSantis calls into question whether Musk’s ambitions to turn Twitter into a destination for politicians, businesses and others to make big announcements is realistic. For one, only about half a million people listened to the DeSantis webcast. A similar announcement on television would attract millions of people.

The other snag: Twitter’s audience size. Less than a quarter of U.S. adults use Twitter, according to Pew Research Center, and most of them rarely tweet, if at all. The site’s most active users are power players, politicians, public figures and journalists, which raises doubts about whether Musk’s desire to reach voters directly, without traditional media as a go-between, can succeed.

Doug Heye, a Republican strategist and former Republican National Committee communications director, said Twitter is “certainly going to be an increasing part” of GOP campaign strategies for the 2024 presidential primary.

“And that’s all because of what Elon Musk has said over the past few months as he’s taken Twitter over and sought to make it a space more friendly to conservatives,” he said.

Musk has leaned into Republican politics, tweeting in 2022 that Democrats “have become the party of division & hate.” While he has tweeted support for both DeSantis and South Carolina Sen. Tim Scott, who also entered the GOP field this week, he said Tuesday he was not yet endorsing any particular presidential candidate.

Even as Democrats wince at the direction Musk has taken Twitter, most are staying put — at least for now. A recent Pew survey found that when looking to the future, just slightly more Democratic users than Republicans said it's unlikely they will be on Twitter in a year.

Democratic Sen. Ron Wyden of Oregon said he has been experimenting with the Twitter alternative BlueSky as a “more casual, fun and positive environment” than Twitter. But he also has continued to use Twitter to communicate with his constituents.

Jimmy Williams, a longtime Democratic political consultant, said he would advise Democrats not to “cede the space.” Indeed, Musk said Wednesday that his forum would be available to any politician.

“Twitter's a two-way street," Williams said.

Air Canada briefly grounds flights due to computer system problem

Glitch grounds flights

Photo: The Canadian Press

Air Canada planes sit on the tarmac at Pearson International Airport in Toronto on Wednesday, April 8, 2020. THE CANADIAN PRESS/Nathan Denette

Air Canada briefly grounded its planes Thursday due to a problem with its computer system.

The airline says a technical issue with the system it uses to transmit messages to aircraft and monitor their performance, prompted a halt to operations.

Airline spokesman Peter Fitzpatrick says the temporary order was precautionary, and that the system is returning to normal.

He says there were some flight delays as a result, but the effects were limited.

Tracking service FlightAware says 106 Air Canada flights, or 21 per cent, have been delayed today, though the figure is lower than the 35 per cent on Wednesday.

Air Canada says it advised Nav Canada and the U.S. Federal Aviation Administration of the ground stop, which lasted about an hour.