- Honda's hydrogen plans Tokyo 848 views
- Gas prices fuel retail salesBusiness 5,081 views
- Earls to launch new brandBurnaby 10,993 views
- Fed lifts rate by quarter-pointUnited States 3,295 views
- Google's next move on AIBusiness 3,410 views
- Food prices to rise again?Business 3,366 views
- Immigration won't fix it allBusiness 3,239 views
- European inflation easesBusiness 874 views
Honda is expanding the use of hydrogen to include trucks and construction equipment, electricity for buildings and even outer space, not just cars on the roads.
Honda Motor Co. plans a new fuel cell vehicle for sale next year, packed with a fuel cell stack developed with General Motors Co. of the U.S., its general manager, Testsuya Hasebe, told reporters Thursday.
That will lower the cost of the fuel cell stack to a third of what it is now, he said. By 2030, costs of Honda’s fuel cells will become comparable with diesel engines, Hasebe said.
The new fuel cell stack, which charges faster than previous versions, will be produced in Ohio, then roll out to other North American and Japan sites, said Arata Ichinose, its operating executive.
All the world’s automakers, including newcomers like Tesla, are coming up with electric vehicles and those that run on fuel cells and hybrid systems, which switch back and forth between a gas engine and a green technology.
Fuel cells are powered by hydrogen and are emissions-free.
“Compared to electric batteries, fuel cells are efficient in producing energy and so they offer a good emission-free solution,” said Hasebe, who oversees the development of the hydrogen business at Honda.
Honda was among the pioneers in fuel cells, showing a prototype car in 1998, and its first market product in 2002.
Honda plans to provide its fuel stack to JAXA, or Japan Aerospace Exploration Agency, this nation’s equivalent of NASA. In using hydrogen for commercial trucks, Honda is working with Japanese truck maker Isuzu Motors and has begun tests with Dongfeng Motor in China. Honda’s fuel cell started providing electricity to a Honda site in the U.S. this month.
Honda’s announcement on fuel cells underlines how Japanese automakers have for years insisted on working on various solutions to climate change, not just electric vehicles.
Canadian retail spending increased six per cent year-over-year in November thanks largely to a 13.7-per-cent price hike for automotive and household fuels, Statistics Canada said this morning.
Spending on those fuels soared 23.8 per cent, compared with November 2021. This was those fuels' 21st consecutive month with a year-over-year increase in the value of products sold. The large increase in November had more to do with higher gasoline prices, however, than a surge in the volume purchased.
Inflation for all goods in November was 6.8 per cent, which was higher than the six-per-cent increase in overall retail spending.
Chances are that spending on fuels was also up year-over-year in December given that gasoline prices continued to soarthroughout that month.
Despite the soaring costs involved in operating motor vehicles, sales for those vehicles remained remained strong in November, rising 6.1 per cent compared with the same month in 2021, the nation's number cruncher said.
The largest contributor to that gain was sales for new motor vehicles, which were up 8.3 per cent, led by sales for new minivans, sport utility vehicles and light trucks, which were up 16.7 per cent.
Sales for used motor vehicles in November increased by a comparatively small 3.7 per cent, compared with November 2021. Sales for minivans, sport utility vehicles and light trucks that were previously owned jumped 10.6 per cent in November. The used-car sector was hurt by a 11.7-per-cent decline in the value of sales for passenger automobiles, Statistics Canada said.
Grocery prices continued to drain more of consumers' budgets as Canadians spent seven per cent more on groceries in November than they did in the same month in 2021. Again, inflation played a role as prices for food purchased from stores increased 11.4 per cent year-over-year in November, compared with the same month in 2021.
The increase in total spending on retail food was up for the ninth consecutive month.
Sales for fresh food in November was up 5.8 per cent from November 2021. Sales for eggs and dairy products (except frozen desserts) jumped 8.3 per cent in November compared with the same month in 2021. Packaged shelf-stable food sales were up 8.6 per cent while frozen food sales were up 9.4 per cent in November, compared with November 2021. In all of those cases, the cause for the rise in total sales had more to do with inflation than an increase in the volume sold.
Sales of soft drinks and alcoholic beverages rose 3.9 per cent in November, compared with the same month in 2021, while sales for soft drinks and non-alcoholic beverages led that gain, with a 13.7 per cent jump in sales in November compared with the same month in 2021, Statistics Canada said.
There were some retail categories where the value of products sold in November was less than in November 2021. Furniture sales and sales for housewares, appliances and electronics were down 3.1 per cent in November, compared with November 2021.
Higher interest rates in November helped slow home sales, leading to fewer people in the market to buy new furniture for their new homes.
Sales specifically for indoor home furniture were down 8.2 per cent, while sales for home furnishings more generally were down 6.6 per cent and sales for home appliances were down 4.7 per cent in November compared with the same month in 2021. The only gainer in the larger home furnishings category was sales for housewares, which was up 4.4 per cent in November, compared with the same month in 2021, according to Statistics Canada.
Vancouver's Fuller Family is readying to launch in June a new restaurant banner: Birdies Eats & Drinks, with a first location in Burnaby.
Its plan is to soon close its 26-year-old Earls Kitchen + Bar location at 3850 Lougheed Highway in Burnaby, do extensive renovations and reopen the site as its first Birdies restaurant, Earls CEO Stan Fuller told BIV.
The chain will also open in mid-February a new Earls location at the nearby upscale Brentwood Town Centre, which is in the fast-developing, 28-acre neighbourhood that calls itself the Amazing Brentwood.
Birdies will be the first new store banner for the Fullers in years. Fuller said future Birdies restaurant openings will depend on how successful the Burnaby location turns out to be.
"The customer is king," he said.
The successful family is known for founding and growing what is now the 68-location Earls Kitchen + Bar restaurant chain as well as the 31-location Joey Restaurants chain.
It was an early investor in Cactus Club, in part because Cactus Club's co-founders Richard Jaffray and Scott Morison started their careers working at Earls. Last February, the family bought out other shareholders in Cactus Club to take their stake in the company to 100 per cent, up from 65 per cent. Cactus Club has 31 locations including one that opened last week at the Coquitlam Centre shopping mall.
The family also owns two Saltlik steakhouses, and has other investments.
Birdies is expected to have a casual, drink-forward California-style theme with menu items that include burgers and nachos.
"We wanted to move the Earls into the mall," Fuller said before gushing about how much he likes the new Brentwood Town Centre.
"It's not just us. All the casual diners and fast food [companies,] and everyone has gone out of their way to do something that is better in class. Our store there is really done up well."
Fuller said he did not want to have two Earls locations so close to each other, so that opened up the idea to renovate the 3850 Lougheed Highway location and add a new restaurant banner.
"We when we renovate restaurants, we spent a lot of money," he said.
That will be the case at the old Lougheed Highway site, and it is also the case at Brentwood Town Centre, where Earls snagged a prime location visible to those who arrive by SkyTrain, Fuller said.
"We've been working very hard at upgrading everything [related to] Earls," he said.
He estimated that the new Earls at Brentwood mall would be around 7,200 square feet, which is slightly larger than the old Earls on Lougheed Highway.
The way the family structures its businesses is to have different family members have larger financial stakes in different restaurant chains in which they have more say. That is why Stan Fuller is CEO at Earls, and his brother Jeff Fuller is CEO at Joey Restaurants. Stan Fuller said each of them, however, report to a board of directors that includes family as well as three outside directors:
•former Lululemon Athletica Inc. CFO John Currie
•retired Cactus Club executive Jim Stewart
•former Wesbild president Randy Zien
Family members on the board include brothers Stan Fuller, Jeff Fuller, Stewart Fuller and a person who Stan said he did not want to identify, who is representing his brother Clay Fuller.
The Federal Reserve extended its fight against high inflation Wednesday by raising its key interest rate by a quarter-point, its eighth hike since March. And the Fed signaled that even though inflation is easing, it remains high enough to require further rate hikes.
Though smaller than its previous hike — and even larger rate increases before that — the Fed's latest move will likely further raise the costs of many consumer and business loans and the risk of a recession.
In a statement, Fed officials repeated language they have used since March that says, “ongoing increases in the (interest rate) target range will be appropriate.” That is seen as a signal that they intend to raise their benchmark rate again when they next meet in March and perhaps in May as well.
The Fed’s hike was announced one day after the government reported that pay and benefits for America’s workers grew more slowly in the final three months of 2022, the third straight slowdown. That report might help reassure the Fed that wage gains won’t fuel higher inflation.
Though the Fed kept language in its statement suggesting that more rate hikes are in store, it did note for the first time that price pressures are cooling. It said “inflation has eased somewhat but remains elevated." The statement also hinted that it will likely stick with modest quarter-point hikes in coming months and is considering when to eventually suspend its rate increases.
But the overall message was that the Fed isn't done raising rates.
“We will need substantially more evidence to be confident that inflation is on a long, sustained downward path, Chair Jerome Powell said at a news conference.
Speculation is widespread among Wall Street investors and many economists that with inflation continuing to cool, the Fed may soon decide to halt its aggressive drive to tighten credit. When they last met in December, the Fed’s policymakers forecast that they would eventually raise their benchmark rate to a level that would require two additional quarter-point hikes.
Yet Wall Street investors have priced in only one more hike. Collectively, in fact, they expect the Fed to reverse course and actually cut rates by the end of this year. That optimism has helped drive stock prices up and bond yields down, easing credit and pushing in the opposite direction that the Fed would prefer.
The divide between the Fed and financial markets is important because rate hikes need to work through markets to affect the economy. The Fed directly controls its key short-term rate. But it has only indirect control over borrowing rates that people and businesses actually pay — for mortgages, corporate bonds, auto loans and many others.
The consequences can be seen in housing. The average fixed rate on a 30-year mortgage soared after the Fed first began hiking rates. Eventually, it topped 7%, more than twice where it had stood before the hiking began.
Yet since the fall, the average mortgage rate has eased to 6.13%, the lowest level since September. And while home sales fell further in December, a measure of signed contracts to buy homes actually rose. That suggested that lower rates might be drawing some home buyers back to the market.
Over the past several months, the Fed’s officials have reduced the size of their rate increases, from four unusually large three-quarter-point hikes in a row last year to a half-point increase in December to Wednesday’s quarter-point hike.
The more gradual pace is intended to help the Fed navigate what will be a high-risk series of decisions this year. The central bank’s latest move put its benchmark short-term rate in a range of 4.5% to 4.75%, its highest level in about 15 years.
The slowdown in inflation suggests that its rate hikes have started to achieve their goal. But measures of inflation are still far above the central bank’s 2% target. The risk is that with some sectors of the economy weakening, ever-higher borrowing costs could tip the economy into a recession later this year.
Retail sales, for example, have fallen for two straight months, suggesting that consumers are becoming more cautious about spending. Manufacturing output has fallen for two months. On the other hand, the nation’s job market – the most important pillar of the economy – remains strong, with the unemployment rate at a 53-year low at 3.5%.
The Fed’s latest policy statement indicated that the central bank no longer regards COVID-19 as a driver of higher prices. It removed from its statement a reference to the pandemic as a cause of supply shocks that have heightened inflation. It also dropped a reference to “public health” as among the factors it will consider when assessing its next steps.
Over the past year, with businesses sharply raising pay to try to attract and keep enough workers, Powell has expressed concern that wage growth in the labor-intensive service sector would keep inflation too high. Businesses typically pass their increased labor costs on to their customers by charging higher prices, thereby perpetuating inflation pressures.
But recent gauges show that wage growth is slowing. And in December, overall inflation eased to 6.5% in December from a year earlier, down from a four-decade peak of 9.1% in June. The decline has been driven in part by cheaper gas, which has tumbled to $3.50 a gallon, on average, nationwide, from $5 in June.
Supply chain backups have also largely been cleared, leading to a drop in prices for manufactured goods. Used car prices, having skyrocketed in the pandemic amid an auto shortage, have now fallen for several months.
Other major central banks are also fighting high inflation with rate hikes. The European Central Bank is expected to raise its benchmark rate by a half-point when it meets Thursday. Inflation in Europe, though slowing, remains high, at 8.5% in January compared with a year earlier.
The Bank of England is forecast to lift its rate at a meeting Thursday as well. Inflation has reached 10.5% in the United Kingdom. The International Monetary Fund has forecast that the U.K. economy will likely enter recession this year.
Before the artificial intelligence tool ChatGPT was unleashed into the world, the novelist Robin Sloan was testing a similar AI writing assistant built by researchers at Google.
It didn’t take long for Sloan, author of the bestseller “Mr. Penumbra’s 24-Hour Bookstore,” to realize that the technology was of little use to him.
“A lot of the state-of-the-art AI right now is impressive enough to really raise your expectations and make you think, ‘Wow, I’m dealing with something really, really capable,’” Sloan said. “But then in a thousand little ways, a million little ways, it ends up kind of disappointing you and betraying the fact that it really has no idea what’s going on.”
Another company might have released the experiment into the wild anyway, as the startup OpenAI did with its ChatGPT tool late last year. But Google has been more cautious about who gets to play with its AI advancements despite growing pressure for the internet giant to compete more aggressively with rival Microsoft, which is pouring billions of dollars into OpenAI and fusing its technology into Microsoft products.
That pressure is starting to take a toll, as Google has asked one of its AI teams to “prioritize working on a response to ChatGPT,” according to an internal memo reported this week by CNBC. Google declined to confirm if there was a public chatbot in the works but spokesperson Lily Lin said it continues "to test our AI technology internally to make sure it’s helpful and safe, and we look forward to sharing more experiences externally soon.”
Some of the technological breakthroughs driving the red-hot field of generative AI — which can churn out paragraphs of readable text and new images as well as music and video — have been pioneered in Google's vast research arm.
“So we have an important stake in this area, but we also have an important stake in not just leading in being able to generate things, but also in dealing with information quality,” said Zoubin Ghahramani, vice president of research at Google, in a November interview with The Associated Press.
Ghahramani said the company wants to also be measured about what it releases, and how: “Do we want to make it accessible in a way that people can produce stuff en masse without any controls? The answer to that is no, not at this stage. I don’t think it would be responsible for us to be the people driving that.”
And they weren't. Four weeks after the AP interview, OpenAI released its ChatGPT for free to anyone with an internet connection. Millions of people around the world have now tried it, sparking searing discussions at schools and corporate offices about the future of education and work.
OpenAI declined to comment on comparisons with Google. But in announcing their extended partnership in January, Microsoft and OpenAI said they are committed to building “AI systems and products that are trustworthy and safe.”
As a literary assistant, neither ChatGPT nor Google's creative writing version comes close to what a human can do, Sloan said.
A fictionalized Google was central to the plot of Sloan's popular 2012 novel about a mysterious San Francisco bookstore. That's likely one reason the company invited him along with several other authors to test its experimental Wordcraft Writers Workshop, derived from a powerful AI system known as LaMDA.
Like other language-learning models, including the GPT line built by OpenAI, Google's LaMDA can generate convincing passages of text and converse with humans based on what it's processed from a trove of online writings and digitized books. Facebook parent Meta and Amazon have also built their own big models, which can improve voice assistants like Alexa, predict the next sentence of an email or translate languages in real time.
When it first announced its LaMDA model in 2021, Google emphasized its versatility but also raised the risks of harmful misuse and the possibility it could mimic and amplify biased, hateful or misleading information.
Some of the Wordcraft writers found it useful as a research tool — like a faster and more decisive version of a Google search — as they asked for a list of “rabbit breeds and their magical qualities” or “a verb for the thing fireflies do” or to “Tell me about Venice in 1700,? according to Google’s paper on the project. But it was less effective as a writer or rewriter, turning out boring sentences riddled with clichés and showing some gender bias.
“I believe them — that they’re being thoughtful and cautious,” Sloan said of Google. “It’s just not the model of a reckless technologist who is in a hurry to get this out into the world no matter what.”
Google's development of these models hasn't been without internal acrimony. First, it ousted some prominent researchers who were examining the risks of the technology. And last year, it fired an engineer who publicly posted a conversation with LaMDA in which the model falsely claimed it had human-like consciousness, with a “range of both feelings and emotions.”
While ChatGPT and its competitors might never produce acclaimed works of literature, the expectation is they will soon begin to transform other professional tasks — from helping to debug computer code to composing marketing pitches and speeding up the production of a slide presentation.
That's key to why Microsoft, as a seller of workplace software, is eager to enhance its suite of products with the latest OpenAI tools. The benefits are less clear to Google, which largely depends on the advertising dollars it gets when people search for information online.
"If you ask the question and get the wrong answer, it’s not great for a search engine,” said Dexter Thillien, a technology analyst for the London-based Economist Intelligence Unit.
Microsoft also has a search engine — Bing — but ChatGPT's answers are too inaccurate and outdated, and the cost to run its queries too expensive, for the technology to pose a serious risk to Google's dominant search business, Thillien said.
Google has said that its earlier large language model, named BERT, is already playing a role in answering online searches. Such models can help generate the fact boxes that increasingly appear next to Google's ranked list of web links.
Asked in November about the hype around AI applications such as OpenAI's image-generator DALL-E, Ghahramani acknowledged, in a playful tone, that “it’s a little bit annoying sometimes because we know that we have developed a lot of these technologies."
“We’re not in this to get the ‘likes’ and the clicks, right?" he said, noting that Google has been a leader in publishing AI research that others can build upon.
Higher grocery prices are expected to hit stores across Canada soon as a blackout on price increases over the holiday season comes to an end.
Last fall, Loblaw Cos. Ltd. said it would freeze prices on all its in-house No Name products until Jan. 31, while Metro Inc. said it would hold prices of most private-label and national brand products steady until Feb. 5.
The lifting of the price freezes comes amid growing consumer outrage over soaring grocery prices in Canada and increasing scrutiny of grocers' strong profits.
But grocery chains have argued their food margins have remained flat and they are simply passing along higher supplier prices.
Loblaw spokeswoman Catherine Thomas says food inflation has continued and the cost of stocking store shelves keeps going up month after month.
She says the company, which operates multiple banners including Zehrs, Provigo and No Frills, will continue to hold many prices flat and switching to No Name will still save the average family thousands this year.
Experts say Canada’s plan to increase immigration may ease some pressures in the labour market, but bigger changes are needed to ensure new permanent residents are matched with the jobs that most need filling.
With the unemployment rate at historic lows, many companies are “starved” for workers, and new immigrants will help fill some of the need, said Ravi Jain, principal at Jain Immigration Law and co-founder of the Canadian Immigration Lawyers Association.
The federal government’s new immigration plan calls for the admission of 1.45 million more new permanent residents over the next three years, beginning with 465,000 in 2023 and reaching 500,000 in 2025. That's compared with 341,000 in 2019.
According to Immigration, Refugees and Citizenship Canada, the plan is intended to help attract labour in key sectors, including healthcare, skilled trades, manufacturing and technology.
“It’s clear that there are real gaps, real demands, and real needs,” said Naomi Alboim, a senior policy fellow at Toronto Metropolitan University and a former Ontario Deputy Minister of Immigration.
But upping immigration levels is just one way to begin addressing those needs, she said -- the government's plan should be part of a wider initiative to address temporary workers, international students and a larger range of jobs.
Change is needed to ensure new Canadians are well-matched to jobs that maximize their skills, qualifications and experience, said Alboim.
Recent immigrants are less likely to see their skills and education utilized than Canadian-born workers, Statistics Canada said, and new and recent immigrants are overrepresented in certain industries, including transportation and warehousing, and accommodation and food services.
Government policies have created a mismatch between the specific skills employers are looking for and the skills of immigrants being approved, Toronto immigration lawyer Sergio Karas said.
Some of this mismatch begins with international students, said Karas. Though many international students plan to become permanent residents after they graduate, many of them aren’t in programs for jobs that are in demand by immigration policies, like healthcare or trades, he said.
International students and temporary foreign workers (TFWs) have made up an increasingly large portion of Canada's economic immigrants, or those selected for their contribution to the economy, who made up more than half of recent immigrants in 2021, Statistics Canada said.
In 2020, 67 per cent of the country’s principal applicants in the economic class were previously temporary foreign workers or international students, the agency said.
But that 67 per cent is a relatively small portion of all the temporary workers and international students in Canada, said Alboim. Canada had 777,000 TFW work permit holders in 2021, and almost 622,000 international students that year, Statistics Canada said.
Canada’s dependence on temporary workers to fill long-term gaps is a huge problem, said Alboim. It creates little incentive to improve wages, conditions or supports for temporary workers, she said.
Federal immigration policy seems laser-focused on jobs requiring higher levels of training and education, said Alboim, a barrier to permanent residency for many TFWs and international students.
That's despite the fact that much of Canada’s labour shortage is in jobs that require lower levels of education or experience, jobs that many temporary workers and students take on, said Alboim.
The federal government should expand its scope to prioritize more of these kinds of jobs, she said.
“There are way, way, way more people here now with temporary status that will never be able to transition to permanent residency, assuming they want to, unless the rules for permanent residency are changed to recognize that we actually need them too,” she said.
However, not all the onus lies on the federal government, Jain said. One ongoing problem has been immigrants’ credentials not being recognized in Canada, and while there have been some recent changes aimed at improving that, more needs to be done, he said. These credentials are the jurisdiction of provinces and territories, not Ottawa.
Provincial and regional immigration programs often do a better job of bringing in workers who can meet a wide range of labour needs including in lower-skill jobs, Alboim said, noting those programs are set to increase under the federal government’s plan.
A legislative amendment recently gave the minister of immigration the power to select immigrants for Express Entry programs based on specific qualities like occupation, but currently Alboim anticipates that use of that power will be focused on higher-level jobs.
“(There are) real needs at the high end, which immigration should certainly be focused on, but not exclusively,” she said.
“My worry is that if the targeted draws get too heavy, like if it's weighted too much in terms of the proportion of people coming in, then I worry that some of these other folks will get marginalized,” he said.
“There needs to be some kind of a balance.”
Europe's inflation rate dipped at the start of the year, giving some relief to consumers but still leaving them facing higher prices.
The consumer price index for the 20 countries that use the euro currency fell to 8.5% in January from a year earlier, European Union statistics agency Eurostat said Wednesday. That's after annual inflation hit 9.2% in December.
It's the first report on consumer prices that includes data from Croatia, which joined the eurozone on Jan. 1. Inflation in Europe has now slowed for the third month in a row, falling from a record high of 10.6% in October.
Food and energy prices, which have been major factors driving up European inflation, kept fueling the higher cost of living. Natural gas prices have fallen from all-time highs last summer thanks to a scramble to find supplies outside Russia and mild winter weather that took the pressure off energy demand for heating.
Russia's war in Ukraine has shaken up food and energy markets, and while commodity prices have fallen from all-time highs last year, consumers are not yet seeing relief on their utility and grocery bills.
The energy upheaval has made the cost-of-living squeeze more painful in continental Europe and the United Kingdom than in the U.S., leading to protests and strikes from workers in several countries who are seeking pay that keeps pace with inflation.
Prices for food, alcohol and tobacco rose at a 14.1% annual pace, while energy prices rose 17.2%.
So-called core inflation, which doesn't include volatile food and energy costs, held steady at 5.2% last month, underlining how prices also are rising for both services and goods such as clothing, appliances, cars and computers.
Surging inflation has weighed on Europe’s economy, which eked out a 0.1% growth in the final three months of last year and 3.5% for all of 2022. That actually outpaced the 2.1% expansion in the U.S. and China’s 3% growth last year.
But with inflation far above a target of 2%, the European Central Bank will keep hiking interest rates that make it more expensive for consumers to borrow money. Aiming to get price spikes under control, the central bank is expected to hike rates by a half-point Thursday.
A report from an investor-focused advocacy group raises questions about how well some of Canada's biggest investors are meeting their climate commitments.
The report from Investors for Paris Compliance (IPC) looks at the voting records on shareholder proposals by 19 Canadian members of Climate Action 100+, a global coalition with around 700 members representing over $68 trillion in assets under management.
The coalition is built on the principle that investors' engagement with companies on climate disclosure and emission reduction strategies essential to achieving the goals of the Paris agreement, and is consistent with their duties as investors.
But the IPC report found that Canadian coalition members took widely differing approaches to the shareholder voting aspect of those efforts, with the likes of Bâtirente, Vancity and Genus Capital Management either supporting or abstaining from all the shareholder proposals they voted on, while others like AIMCo, RBC Global Asset Management, and Guardian Capital LP voted against all of the 14 Canadian proposals analyzed.
The Canadian shareholder proposals, none of which passed, were dominated by efforts to give shareholders a say on the companies' climate plans, referred to as "say on climate," and also included efforts to push for a climate change committee at Scotiabank and for Brookfield Asset Management to adopt greenhouse gas emission reduction targets.
Shareholder proposals for U.S. companies, focused entirely on adopting emission reduction targets, got more support from Canadian investors, including some from those who voted against all of the Canadian proposals.
IPC director of research and policy Kyra Bell-Pasht said in a statement that big investors need to be willing to escalate their climate engagement beyond simple dialogue in order for efforts to be effective.
“Engagement is often held up as the alternative to divestment, but unless investors are willing to vote for climate proposals, engagement is likely to be toothless and ineffective.”
Canadian Pacific Railway Ltd. is on a hiring spree as it awaits regulatory go-ahead for its acquisition of Kansas City Southern.
In a conference call to discuss fourth-quarter financial results, CP's CEO Keith Creel said the Calgary-headquartered railway is in growth mode as it awaits a decision by the U.S. Surface Transportation Board.
The ruling, expected sometime this quarter, is the final hurdle CP must clear in its bid to purchase KCS for US$31 billion — a deal which would create the only single-line railroad linking the United States, Mexico and Canada.
In anticipation of a positive ruling and the growth opportunities that will result from the merger, Creel said CP started hiring in large numbers last spring.
"In spite of a historically tight labour market in '22, it was a record year of hiring at CP," Creel said. "We added more than 1,600 conductors over the course of last year, and we made some significant progress with our labour agreements."
During the course of 2022, CP's total workforce swelled to 13,000, an increase of seven per cent year-over-year.
"That was certainly a significant expense in 2022, and it will be a significant expense this year as we prepare for growth," said chief financial officer Nadeem Velani on the call.
"Assuming a positive response from the STB, the synergies that we one day will realize will take some people. So we're hiring a few thousand at a time, and we're spending cap-ex at record levels on our property and KCS on their properties."
CP's deal closed in December 2021, but the shares of KCS were placed into a voting trust that allows the U.S. railway to operate independently while the STB completes its review.
Mexican regulators have already given their approval to the deal.
CP has said its acquisition of KCS will enable significant growth for its rail customers, and allow for 60,000 truckloads annually to be shifted off public highways.
In addition to hiring, CP said it has also been working to ensure labour stability in advance of a finalized merger. CP recently announced a new tentative collective agreement with Unifor, the union that represents the railway's mechanical employees in Canada, and has also reached an agreement with the union that represents the conductors for KCS in Kansas and Missouri.
All of the activity comes against the backdrop of an uncertain economic environment. On Tuesday, CP Rail said it earned $1.27 billion in the fourth quarter of 2022, compared with $532 million in the same period of 2021.
The diluted profit worked out to $1.36 per share, compared with 74 cents per share in the prior year's quarter.
Revenues were $2.46 billion, a 21 per cent increase from the same period in 2021, in spite of weather challenges in the fourth quarter and an outage at the Elkview mine that negatively affected coal shipments.
CP has declined to issue forward guidance for 2023, given the pending merger decision and the potential for macro-economic headwinds such as a possible recession. The company said instead, it will provide guidance at an investor day later this year.
"We're not going to get too far over our skis and try to predict what that's going to look like," said John Brooks, the railroad's head of marketing.
During the fourth quarter, CP Rail said its adjusted operating ratio, a key metric of railroad efficiency where a smaller number is better, increased 160 basis points to 59.1 per cent.
For the full year 2022, CP Rail's adjusted operating ratio increased by 380 basis points to 61.4 per cent.
Creel said on the call that the company's operating ratio performance in 2022 was not "CP standard" and that he sees opportunity to improve that figure in the year ahead.
Home sales in Greater Vancouver are predicted to stay in line with last year’s slower pace, while prices inch up slightly.
The forecasts are contained in the Real Estate Board of Greater Vancouver's outlook for 2023 released Tuesday.
Historically, the report says rapidly escalating mortgage rates haven’t had as big a negative affect on prices as they have had on sales in Metro Vancouver.
It predicts 28,500 home sales in 2023, a 2.6 per cent decrease from last year.
While the current downtown has resulted in a price decline of about 10 per cent, the forecast says steady population growth in Metro Vancouver will underpin prices and maintain or even increase values.
It says the average home price this year for apartments, attached and detached homes is expected to climb slightly to $1.2 million, a 1.4 per cent increase.
However, the report says the risks to its predictions are an economic recession and even higher mortgage rates.
“The precise impact of a recession on the Metro Vancouver real estate market is difficult to predict since it largely hinges on the severity of the recession and the Bank of Canada’s policy response,” the report says.
Multiple media outlets are reporting that global sportswear giant Nike Inc. (NYSE:NKE) is again suing Vancouver-based leisurewear retailer Lululemon (Nasdaq:LULU) for alleged patent infringements.
Reuters reported that Nike today filed documents in Manhattan federal court that said that it has suffered economic harm and irreparable injury from Lululemon's sale of its Blissfeel, Chargefeel Low, Chargefeel Mid and Strongfeel footwear.
Nike has not yet released a public statement on the legal conflict.
Lululemon sent BIV an email to say, “Nike’s claims are unjustified, and we look forward to proving our case in court.”
Reuters said Nike's lawsuit seeks unspecified damages, and that it alleges that the Oregon-based company's three patents at issue concern textile and other elements, including one addressing how the footwear will perform when force is applied.
This is the second consecutive January in which Nike has taken court action against Lululemon. Media reports in January 2022 noted that Nike filed documents in U.S. District Court in Manhattan that accused Lululemon of infringing six patents because its Mirror technology, which lets users target specific levels of exertion, as well as compete with others, and record personal performance, infringe on Nike intellectual property.
Lululemon in July 2020 spent US$500 million to buy Mirror – a New-York-based, in-home fitness company.
Mirror’s marquee product is a device that appears to be a standard mirror, unless it is turned on.
Users activate their Mirror to enjoy augmented reality. A fitness instructor could appear – wearing Lululemon clothing, and ready to guide the user through a workout.
The Mirror could also show videos that include Lululemon representatives, or community events.
Nike is said to be seeking triple damages among other remedies for Lululemon's alleged wilful infringement of patents related to its Mirror product.
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