In early February, the Canadian Federation of scholars (CFS) released a research document. It determined, towards the surprise of nobody, that it’s within the public’s interest for the authorities at hand students billions of dollars more each year. One demand is a doubling in funding for that Youth Employment Strategy, which would cost $330 million per year. (When the CFS’s provincial campaigns to increase minimum wages to $15 are successful, private employers will surely hire fewer students. But governments as a rule are happy to overpay, hence the request another $330 million.)

Then comes balance larger demand: The CFS wants an end to undergraduate tuition fees in Canada. The ask comes despite the fact that only about one-quarter of universities’ revenues come from tuition fees, and the federal Liberals already promised up to $750 million of additional annual funding throughout the campaign. However the CFS is unsatisfied with $750 million; it wants more.

Marginal enrollment from eliminating tuition fees will likely come from unmotivated, lower-ability students

Within just a couple weeks, the CFS was suddenly a great deal nearer to getting what it really wanted, a minimum of in a single province – also it didn’t even have to wait for a federal budget. The federal government of Ontario Premier Kathleen Wynne, Justin Trudeau’s ideological soulmate at Queen’s Park, announced a change of the student grant system. Under the Ontario Student Grant, “average college and university tuition is going to be free for college students with financial need from families with incomes of $50,000 or less, and tuition will be made more affordable for middle-income families,” based on the Ministry of Finance. The “free” tuition is going to be included in re-directing funds from current student grant programs and eliminating tuition tax credits.

There will be more grants and more interest-free loans. The Ministry of Finance boasts that more than half of students “from families with incomes of $83,000 or less will receive non-repayable grants which will exceed average university or college tuition” and that “all students will be the same or better off as under the Ontario Tuition Grant.”

Related

Sure, you will find (some) catches, but Ontario is really getting free tuition for low-income students. Here’s howOntario budget 2016’s free tuition pledge: What the changes mean for some students

What happens when costly services like university education are supplied for free or in a steep discount? Invariably, there will be overconsumption. Actually, there already is, as seen in the relative unattractiveness of university graduates for employers, who’re evidently more hungry for workers with non-university skills: For each year since 1998, Canadian youth were more likely to be employed if they had got a new post-secondary diploma or certificate after high school instead of a university degree.

Making university education cheaper will fuel more overconsumption. It gets a whole lot worse when you consider where the marginal enrollment will require place, and among what kinds of students. High-ability students who enroll in mathematics, business, or science programs are already in university, because they believe the elevated future incomes will provide a sufficient return on their investments in education.

Marginal enrollment from eliminating tuition fees will likely originate from unmotivated, lower-ability students, as well as in less practical programs like theatre history or equity studies. These are students for whom university education is definitely an unprofitable investment unless taxpayers are footing most or all the tuition bill. Meanwhile, the structure of Ontario’s new funding arrangement actually can lure would-be students to less expensive programs like arts, in which the province covers nearly all of the tuition with its $6,000 a year average grant, rather than a $11,000-a-year architecture degree or a $13,000-a-year engineering degree, in which the province covers only area of the cost.

Eliminating tuition fees will also have the perverse effect of discouraging students from graduating on time. Students are less motivated to avoid failing courses when they don’t have to purchase additional semesters.

So cheapening or eliminating tuition fees likely won’t mean better computer scientists and more engineers; it’ll mean more party students, more 25-year-old social justice warriors in their seventh year of undergraduate human rights studies, and more campus climate activists. But then, Wynne and Trudeau surely wouldn’t mind using a much more of those.

Matthew Lau is a finance and economics student at the University of Toronto.

NEW YORK – Subway customers can finally be assured that their “Footlong” sandwiches will be so long as promised.

The go up and down of Subway: The way the world’s biggest food chain lost its ‘fresh’ appeal

With 43,945 sandwich shops in 110 countries, Subway has become the world’s most ubiquitous restaurant chain, posting armies of “sandwich artists” in more American outposts than McDonald’s and Starbucks combined.

Continue reading.

A judge a week ago granted final approval to a settlement of the class-action suit filed against Subway after an Australian teenager in 2013 posted a picture of his sandwich on Facebook which was only 11 inches. The image garnered international media attention, with The Ny Post writing that it found four out of seven Footlongs it bought in New York “measured only 11 or 11.5 inches.”

A judge had given preliminary approval in October to a settlement between Subway’s parent company Doctor’s Associates and plaintiffs’ attorneys. Final approval was granted on Feb. 25.

As part of the settlement, Subway agreed to institute practices not less than 4 years to ensure its bread is at least One foot long. The judge approved US$520,000 in attorney fees and US$500 for each from the 10 those who were representatives of the class, but no monetary claims were awarded to potential people in the category.

“It was hard to prove monetary damages, because everybody ate the evidence,” said Thomas Zimmerman, who was co-lead attorney for the class. Zimmerman said the lawyer fees are now being split among 10 lawyers.

Subway said in a statement that it was pleased the judge found no wrongdoing on its part.

Related

Subway co-founder Fred DeLuca dead at 67 after being identified as having leukemiaSubway becomes latest restaurant chain to remove artificial ingredients from the food

“This allows us to maneuver forward, without distractions, on our goal to provide great tasting sandwiches and salads, made exactly as each guest likes. We have already taken steps to make sure each guest receives the Footlong or six-inch sandwich they order,” the statement said.

Lynn Adelman, the court for that U.S. District Court Eastern District of Wisconsin, wrote within the final approval the plaintiffs’ attorneys realized their claims “were quite weak” after a preliminary mediation session. Rather than looking to get class certification for monetary damages, he explained plaintiffs decided to focus on injunctive relief requiring Doctor’s Associates to ensure its sandwiches are in least One foot long.

It was hard to prove monetary damages, because everybody ate the evidence.

Adelman wrote that the plaintiffs’ attorneys learned Subway makes its bread with “dough sticks” that weigh the same once they get to stores frozen. The dough will be thawed and stretched before baking, a procedure that can result in variability in the shape and size from the resulting bread.

While the dough may have different shapes, still it has got the same volume of ingredients, Adelman wrote. The amount of meat and cheese can also be standardized, but it’s entirely possible that a shorter bread loaf might lead to a slightly less toppings. For instance, “a sandwich that was 1/4-inch shorter than advertised may be missing a few shreds of lettuce or perhaps a gram or two of mayonnaise,” the judge wrote.

But Adelman also noted that sandwiches are made in front from the customer, who are able to request more toppings.

“Thus, the plaintiffs learned that, as a practical matter, the length of the bread does not affect the amount of food the customer receives,” Adelman wrote.

Still, Subway agreed as part of the settlement to take steps to make sure its bread is at least 12 inches long, including requiring franchisees to “make use of a tool for measuring bread.”

OMAHA, Neb. – The United States’ economy is within better shape compared to presidential candidates allow it to be seem, investor Warren Buffett said Saturday, despite the fact that businesses like his still face challenges.

In his annual letter to Berkshire Hathaway shareholders, Buffett didn’t name specific candidates or issues, but noted that the negative drumbeat concerning the economy, healthcare reform and income inequality may get voters down about the future.

“It’s an election year, and candidates can’t stop speaking about our country’s problems (which, obviously, only they are able to solve),” he explained, adding later, “that view is dead wrong: The babies being born in the usa today are the luckiest crop ever.”

The answer such disruptions isn’t the restraining or outlawing of actions that increase productivity. Americans would not be living nearly as along with we all do when we had mandated that 11 million people should forever are employed in farming.

Buffett noted that there will still be economic troubles as business evolves, but that the country must make certain it features a solid safety net to help people who lose jobs.

“The answer such disruptions is not the restraining or outlawing of actions that increase productivity. Americans would not be living as along with we do when we had mandated that 11 million people should forever be employed in farming,” he wrote.

Buffett pointed out that change also creates challenges for Berkshire’s businesses. For example, its BNSF railroad is certain to haul less coal in the future and Geico insurance might be hurt by driverless cars.

He assured shareholders that Berkshire’s businesses will adapt just as the company did when its original Berkshire Hathaway textile operation failed.

Buffett’s letter is one of the most well-read documents the business world each year because of his successful track record and his knack for explaining complicated subjects in simple terms.

Buffett said it value of Berkshire’s businesses improved 6.4 percent this past year even as its stock price fell 12.5 percent. When dividends are factored in, the S&P 500 gained 1.4 % in comparison. Buffett has warned that it’ll be increasingly a hardship on Berkshire to continue beating the marketplace because the clients are so large.

Berkshire Hathaway employs more than 360,000 people at its eclectic mix of companies, including insurance, utilities, railroad, manufacturing and retail firms. Berkshire also holds significant stakes in Coca-Cola, Wells Fargo, American Express, IBM and other companies.

CALGARY – Enbridge Inc. says it raised $2.3 billion in the latest stock offering since it’s syndicate of underwriters fully exercised their option to buy additional shares within the pipeline operator.

The Calgary-based company had initially planned to raise $2 billion, but the underwriters – including Canada’s five biggest banks – bought one more 7.4 million shares.

The underwriters paid $40.70 per share for that stock. The group includes RBC Capital Markets and it is counterparts at BMO, CIBC, Scotiabank and TD. It also includes Credit Suisse, one of Switzerland’s biggest banks.

Related

Selling group firms cut out of Enbridge Inc dealExplanations, some of which are fanciful, behind Enbridge’s stock price gains

Enbridge says it’ll use arises from the sale to reduce its debt.

The company also expects the cash is going to be sufficient to support its growth program through the end of 2017.

Enbridge has a number of projects within the planning stages, including the Northern Gateway pipeline across British Columbia. It completed 14 projects worth $8 billion in 2015.

OTTAWA – The federal government says the legal overview of Canada’s free trade deal with the European Union has been completed – and also the door is open for that pact to come into force next year.

An agreement in principle was reached around the comprehensive deal, known as CETA, in October 2013. Negotiations between Canada and also the 28-member EU began in 2009.

The agreement was negotiated under the former Conservative government, but International Trade Minister Chrystia Freeland said Monday the Liberals supported CETA during opposition.

“This is actually a gold-plated trade deal,” said Freeland, who added that CETA’s entry into force can give Canada access to an industry of 500 million people.

“It will bring tremendous benefit to Canadians and also to Europeans. We are going to feel everything inside a real increase in prosperity and I’m confident this is going to become the landmark trade agreement.”

Related

New cabinet minister Chrystia Freeland sees free trade as answer to middle-class prosperityCETA will work for smaller businesses on both sides from the Atlantic

In making the announcement, Freeland pointed to modifications including changes that strengthen the best of governments to manage, including in areas such as labour and the environment.

“These days, it’s right and appropriate to make clear in trade agreements the power, and even the democratic responsibility, of governments to regulate,” she said.



Modifications, she added, are also made to allow for a permanent dispute-settlement tribunal and an appeal system.

“The core perception of having a dispute-resolution process is not to supersede that right to regulate – it’s to ensure that governments don’t discriminate against foreign investors,” Freeland said. “That’s the core idea behind trade deals.”

Earlier this month, Canada’s chief negotiator Steve Verhuel told a parliamentary committee that Ottawa was working with the EU to revise controversial investor protection provisions in CETA.

Verhuel said Ottawa was exploring whether improvements might make the dispute-resolution mechanism more favourable to Canada.

The Europeans first raised the matter after political opposition surfaced in Europe in 2014 over the chapter that are responsible for settling disputes between companies and governments, referred to as ISDS.

Some European politicians and anti-trade activists have expressed concerns that the investor-state dispute settlement chapter will give big companies the ability to sue governments for creating regulations affecting their profits.

They have warned it might undermine the ability of countries to manage environmental and health policies, among other things.

European officials, such as the EU ambassador to Canada, have said they didn’t see ISDS as an impediment to the pact’s implementation.

Freeland, who expects to sign the deal later this season, said she didn’t hear any opposition to CETA during consultations she held on it across the nation.

She said there’s still time before next year’s ratification to appear closely in the agreement to determine potential negative effects for some sectors and how Ottawa can respond to them.

John Thornton looks on Barrick Gold Corp. like a patient finally ready for discharge from hospital and going to abandon the fast living that landed it there.

Barrick Gold Corp has returned on top as Canada’s best-performing stock and also the world’s most valuable gold company

Barrick Gold Corp. has surged to become Canada’s best-performing stock like a two-month rally in the precious metal gives added lift towards the company’s turnaround efforts.

Continue reading.

In his first on-the-record interview in several months, the executive chairman of the world’s largest gold producer discussed all of the hot-button issues – from his perspectives on acquisitions and disposals towards the sprawl of his board to his own controversial pay packet.

Criticized for lacking industry experience, the 62-year-old banker-turned-miner could be forgiven if he made a decision to gloat: on his watch Barrick has transformed from market casualty to darling, culminating with a peer-beating 82 percent stock surge this season. A big-picture guy, he speaks in entire paragraphs from the mile above ground where the way forward is clear: it’s time for Barrick to get off the defensive, albeit cautiously.

“When you’re coming out of intensive care, both for the great of your health and for purpose of reputation, it’s extremely important to be clear and transparent about what you’re doing,” he explained in Ny on Wednesday. “All of those things argue for going slowly.”

Deal Discipline

Thornton’s stated goal would be to make Barrick one of the best companies on the planet this century, in any industry, which means beginning to consider acquisitions. Senior executives have been running through deal scenarios to “exercise the muscles.”

To be sure, the organization is “nowhere close” to an acquisition despite the fact there aren’t any shortage of opportunities amid what had, up to now, been a four-year downturn for gold. “The very first thing we do absolutely should be successful,” Thornton said.

What the company can’t afford is yet another fiasco. In 2011, Barrick expanded its copper footprint with the $7.3-billion acquisition of Equinox Minerals Ltd., swelling its debt as high as US$15.8 billion in 2013. The deal was the single biggest factor that led to a long and painful restructuring. In September, Barrick said hello would close the unit.

Since 2013, Barrick has cut assets, jobs and costs and adopted a decentralized model more similar to a tech firm than a miner. Debts are right down to US$10 billion and also the clients are looking to halve that within the medium term. Asked if he’d consider expanding beyond gold when the company opens its wallet, Thornton said now you ask , “in almost any meaningful time period academic: the answer is no.”

Related

Barrick Gold Corp estimates it will spend US$2 billion on Nevada, Peru projects if they proceedHow a crash in metals prices makes 2016 a great year to build a mineBarrick Gold looks to keep momentum with US$2 billion credit card debt reduction target for 2016

Asset Sale

Until now, Barrick’s divestment program has excluded its best assets, but Thornton suggested not every preferred properties are untouchable. “Should you define a core asset as a first quartile asset – whatever that definition is – obviously you won’t ever want to sell those,” he said, before adding: “Barrick’s so-called core assets, they’re not all equal.”

Thornton is unapologetic about the company’s quarterly dividend, which peaked at 20 cents in 2013 and it is currently two cents. “Priority one is obtain the debt down. Until we’re inside a healthier financial position, we’re not likely to touch the dividend.”

Related

Barrick Gold Corp estimates it’ll spend US$2 billion on Nevada, Peru projects when they proceedHow an accident in metals prices makes 2016 an excellent year to construct a mineBarrick Gold looks to keep momentum with US$2 billion credit card debt reduction target for 2016

Pay Solution

Investors can get imminent changes around the most contentious issue of Thornton’s brief tenure: executive pay. At last year’s annual general meeting, more than 73 per cent of shareholders voted against a non-binding pay resolution, largely spurred on by his US$12.9-million package for 2014.

“Whenever we said last year we will fix this, we’ll fix it. In fact we have fixed it. We haven’t actually announced it – but we’ve fixed it.” Investors are to discover the details in a regulatory filing on March 24.



If the news means he will be earning less, the money he’s made on Barrick’s recent stock rally may lessen the sting. Thornton owns about 2.Two million shares, 160,000 which were bought at no more December, before gold rebounded and Barrick catapulted higher. “I’m still a purchaser,” Thornton said. The day after the interview he made good with that promise, buying 300,000 shares. 

On Monday, Barrick gained 2.5 per cent to $18.70 at 10:08 a.m. in Toronto.

Also on Thornton’s to-do list is managing the transition to a leaner board. As of Barrick’s AGM this April, it’ll have 14 directors, with eight joining since he became chairman. Anything over 12 is simply too large, he states.

What he can’t manage, obviously, is price. Barrick considers itself “gold price agnostic,” and runs more conservative price models than its two biggest competitors Goldcorp Inc. and Newmont Mining Corp. Thornton says his goal would be to guarantee shareholders a safe return, having a healthy dividend as well as an occasional “windfall” based on market swings.

When all has been said and done, nothing fascinates Thornton that can compare with China. As chairman of Goldman Sachs Asia, he rebuilt the firm’s Chinese business within the late nineties. Nowadays, he’s a professor at Tsinghua University and flies to China monthly.

Both Thornton and Barrick President Kelvin Dushnisky have been effusive in their praise of Zijin Mining Group Co., the company that Barrick made a partnership at the Porgera mine in Papua New Guinea. He talks of a relationship based on mutual respect and benefit, and including a heavy mentoring component from Barrick.

‘Trust Me’

As a case in point, Thornton says he warned Zijin against wading in and buying Porgera outright, telling executives: “Believe me, when you go see it, it’s likely to scare the hell from you.” Instead, he provided to let Zijin discover the ropes gradually with Barrick management in position. Sooner or later, not soon, he expects Zijin tends to buy the remaining Half.

In the meantime, “they’ve been everywhere, they’ve seen everything,” of the Barrick empire. Thornton believes, someday, Zijin may help turn Barrick’s greatest problem child, Pascua Lama, right into a success by spreading the financial and political risk. The giant project in the Andes continues to be shuttered since 2013, whenever a Chilean court accepted an injunction filed by indigenous groups over environmental concerns.

Thornton is quick to dismiss the issue of whether Zijin or any Chinese investors could take a substantial curiosity about Barrick itself. Although headquartered in Canada, its best assets have been in Nevada, near military bases, and that he believes the Committee on Foreign Purchase of america would reject any Chinese bid.

As for any takeover attempt nearer to home, Thornton highlights that Barrick has regained its place as the most valuable gold producer, which makes it unlikely anyone could afford it. 

“Nothing we’re doing is for the objective of shining ourselves on the market. Like any public company of course, by definition, if a person wants to walk in here and set a large price on the table we’d need to take it seriously. However i see zero proof of that.”

Bloomberg News

Northair and Kootenay Combining to Create Mexican Silver Consolidator

Northair Silver Corp (TSXV.INM) has a NI43-101 compliant silver resource at its La Cigarra project in Chihuaua State, Mexico; only 20 kilometers from two large producing mines which have been mining silver for hundreds of years. The organization also has 2 million dollars in its treasury and it is President & CEO, Andrea Zaradic is confident that La Cigarra will “be a mine one day”.

So how come a combination with Kootenay Silver Inc. (TSXV.KTN)  another Mexican silver explorer with two promising silver assets in Sonora State, seem sensible at this time in the market cycle?

Zaradic, a mechanical engineer by training, took over as CEO of Northair in 2014 but she has had her eye around the company for much longer. “In 2012, as i was the CEO of a company called Troon Ventures Ltd., which was a cashed up shell, looking to acquire mining assets, I traveled to the Parral Mining District in Mexico to go to Northair’s La Cigarra silver project.  It quickly became apparent that this was a good thing with substantial merits and really separated itself.”

Shortly thereafter, Zaradic led Troon Ventures right into a successful merger with Grenville Strategic Royalty Corp (TSXV: GRC) where she currently serves as an independent director.  Now free of her Troon CEO duties, she was able to transition into Northair once the very long time CEO decided to retire in 2014. “I was very looking forward to the opportunity at Northair and the potential to make further discoveries at La Cigarra.  Soon after registering with work with the organization, a window opened out to complete a financing and that we managed raise $4 million dollars. These new funds allowed Northair to update the mineral resource estimate in January 2015 increasing the tons and grade of the deposit, develop a metallurgical program which we reported in June 2015 in addition to conducting an airborne geophysics program, which identified several new exploration targets around the property.  In addition to having a great project, Northair is based on the neighborhood community which is considered a mining friendly jurisdiction and home to people who’ve been mining all their lives.”

But there was a problem. Silver prices had been steadily declining with them the Northair share price. “We were a little distraught due to the silver price. We had to take serious steps due to the market. We cut our overhead, our staff, our G&A. That has left us two million dollars in our treasury.”

Zaradic is really a deal maker. She set the wheels moving for the reverse takeover of Troon, and she was instrumental in the merger of Magma Energy & Plutonic Power (now Alterra Power). She is also something of a student of economic history.

“Silver consolidation works.” she said. “Silver Standard, First Majestic and Pan American are caused by silver consolidation once the cost of silver was depressed in the early 2000’s. Pan American went from $2.50 a be part of 2000 to $41.00 per share in 2008, First Majestic went from $.05 to $23 and Silver Standard went from $1.25 to 37 dollars all for the reason that same period.”

With metal prices low, Zaradic believes that what went down from 2000 to 2008 could happen again in gold and silver. “We see First Mining Finance (TSXV: FF) within the gold sector buying gold assets, climbing to a market cap of +$100 million in an exceedingly short time. The marketplace likes consolidation. Since we announced our deal with Kootenay on January 13 our share price has doubled.”

For the consolidation strategy to work Zaradic believes companies have to grow once the metal prices are depressed so they are large enough to leverage what she sees being an inevitable rebound within the silver price. When silver prices dragged along in 2015, Zaradic, like a strategic exercise started to take a look at other silver companies just as those companies were looking at Northair to find a fit.

Kootenay Silver was certainly a fit on an asset basis and geographically having its flagship silver property in Mexico too. At that time the transaction was announced Zaradic stated, “La Negra and La Cigarra represent two of the highest profile new silver discoveries amongst non-majors in Mexico. The continued exploration successes at our flagship projects put the combined company inside a strong position, distinguishing us from our peers.”

Zaradic says “The combined company come in a powerful financial position to complete its consolidation plan while simultaneously advancing its flagship assets.  A situation that will be bolstered by a $2,000,000 investment into Kootenay by Pan American included in a choice agreement on Kootenay’s Promontorio Mineral Belt silver properties. An agreement which brings not only the investment but also as much as $16 million US of expenditures and payments to Kootenay plus a pathway to production in the form of a 25% carried to production interest.”

The option agreement between Kootenay and Pan American was announced February 16, with closing anticipated early March 2016 and also the direct investment by Pan American may increase to nearly $3.3 million post-Northair acquisition closing. “Pan American is one of the largest silver producers in Mexico.” said Zaradic “It has tremendous operating experience in Mexico and Kootenay’s Le Negra deposit is extremely attractive given its closeness to one of Pan American’s operations which is starting to run out of material.”

Upon closing of the transaction with Kootenay, Northair shareholders will get, for each common share of Northair held, 0.35 common shares of Kootenay, plus 0.15 of the tradable warrant to buy Kootenay common shares at an exercise cost of $0.55 for five years from closing. Upon completing the Transaction, Northair will end up a wholly-owned subsidiary of Kootenay, and former shareholders of Northair will hold approximately 40% from the shares of Kootenay with an outstanding shares basis.  If Zaradic is right about silver consolidation and if the history of the 2000 to 2008 run were to repeat itself, the company shares have significant homer potential.

Once the transaction forwards and backwards companies is finished, plans call for further consolidation along with drilling and exploration at La Cigarra underneath the Kootenay management team and growth of the Promontorio Mineral Belt silver resources underneath the option agreement with Pan American.

Zaradic herself will keep her involvement like a director of Kootenay. “This is the initial step within our growth means of silver consolidation.” said Zaradic, “We likely have turned the corner around the silver price. In a year or two or maybe three the price of silver should rise.”

When it does, Northair shareholders will be in position to take full benefit of the potentially explosive growth in a well leveraged Mexican silver consolidator.

At duration of writing Northair was trading at $.09 with 150.A million shares outstanding and a market cap of $13.51 million. Kootenay was trading at $.26 with 79.4 million shares outstanding and a market cap of $20.25 million.

[Both Northair and Kootenay is going to be attending the PDAC Conference in Toronto March 6-9. Andrea Zaradic is going to be presenting at the National Post Investor Forum Monday March 7.]

OTTAWA – The financial institution of Canada is issuing a warning about email and social media scams which are claiming in the future from the bank.

Canada’s central bank says the scams are utilizing its logos and letterhead without authorization and misrepresenting it.

The Bank of Canada says it does not accept deposits from individuals or on behalf of them, nor will it collect personal or financial information from individuals through email.

Related

How to recognize a new phishing fraud that’s costing Canadian companies a large number of dollars12 quick tips that will save your valuable digital life from getting hacked

The central bank also doesn’t request personal or financial information through social media messaging applications.

The Bank of Canada says for those who have concerns about any Internet-based communication that proposes to be from the bank, you should delete the content and phone your local authorities.

It warns to not follow any links included in the message and instead access the Bank of Canada’s website by typing the address yourself.

TORONTO – An increase in food prices has widened the cost divide between Canada’s supermarkets as well as their discount divisions – an issue that could play out in Loblaw Cos.’ favour.

“Looking at identical items, the discount channel doesn’t have the symptoms of increased shelf prices to the significant degree, as the conventional channel has significantly increased shelf prices,” analyst Keith Howlett of Dejardins Securities wrote within an industry report Monday after an assessment of grocery price fluctuations between retail channels. “We also note a greater diversity of pricing on identical items between competitors in the same channel inside the same trading area.”

Howlett anticipates the pricing gap between discount and conventional channels will move toward equilibrium within the next four to six weeks.

But among public grocers, “this duration of pricing confusion favours leader in the industry Loblaw,” given its scale relative to other players and its large network of discount stores, No Frills.

Related

Canadian farmers go back to growing vegetables, fruits as low loonie lifts pricesLoblaw Companies Ltd cookies help sweeten sales at Shoppers Drug Mart unitPricey vegetables sending more customers to freezer aisle: Metro CEO

“We would expect customer traffic to shift temporarily toward the discount and club channels until required price increases are implemented across all channels in the coming weeks,” the analyst said. Howlett rates Loblaw like a buy having a target cost of $76. Also, he has a buy on Metro Inc., operator from the discount chain Food Basics, at a price target of $44.

Grocery price inflation, which climbed 4.1 percent nationally around the fourth quarter according to Canada’s Consumer Price Index, has been aggravated by a weak Canadian dollar. Food prices have become a warm button topic among consumers in recent months, having a Canadian price peak for cauliflower in January drawing international attention.

On a conference call with analysts last week to go over fourth-quarter results, Loblaw president Galen Weston said the retailer was experiencing “disproportionate momentum” in the discount side of their business.

“The most illustrative example of that’s in Alberta, and the good news for all of us in that province is the fact that we’re really well-positioned in terms of discount, and so I don’t wish to say that’s entirely helpful, but certainly I think we’re more insulated in the impact than the others,” Weston said.

Financial Post

hshaw@nationalpost.com

Twitter.com/HollieKShaw

Valeant Pharmaceuticals International Inc. is under investigation through the U.S. Filing in a previously undisclosed probe, the organization said on Monday, capping a tumultuous 24-hour period that saw the firm announce the return of its CEO and also the cancellation of an earnings announcement.

The SEC probe is outside of an existing investigation right into a company purchased by Valeant this past year, Salix Pharmaceuticals Ltd., said a person acquainted with the matter. The person declined to discuss the record since the matter isn’t yet public.

It’s unclear what the new probe is centered around.

“Valeant confirms that it has several ongoing investigations, including investigations through the U.S. Attorney’s Offices for Massachusetts and the Southern District of recent York, the SEC, and Congress,” said Laurie Little, a Valeant spokeswoman.

Judy Burns, an SEC spokeswoman, declined to discuss the new probe.

Related

Valeant’s female sex drive pill – it bought for US$1B – offers ‘marginal’ libido benefits: studyMore than $6 billion has been cancelled Valeant Pharmaceuticals International Inc shares since ThursdayValeant shares sink as CEO returns from medical leave and company withdraws guidance, delays results

At the time from the mid-afternoon revelation, shares were already down by more than ten per cent after company postponed its pre-market earnings report and withdrew its 2016 guidance following the announcement on Sunday that leader Michael Pearson would be retaking the helm.

Pearson is viewed as integral towards the drug maker’s strategy and execution, and his return following a two-month leave of absence because of severe pneumonia had generally been seen as an positive development.

It also suggested the board is confident in Valeant’s capability to move past recent controversies, such as inadequate financial controls, questions about its broader strategy, and allegations it inflated revenues although the mail order pharmacy Philidor Rx Services.

But the postponement sparked concern among already nervous investors.

“We happen to be worried about the feasibility from the guidance range for many time-” said Irina Koffler, an analyst at Mizuho Securities USA. “We think investors should just delete all comments from recent investor meetings and calls and brace themselves to have an entirely new story.”



Valeant shares fell further in afternoon trading around the TSX, ultimately closing down $15.34, or almost 14 percent, at $94.49.

The stock is down more than 35 percent since Pearson stepped from the company at the end of December. It has lost more than 65 percent of its value previously six months, after briefly becoming Canada’s most valuable company.

Valeant suggested it chose to withdraw guidance and delay its results because Pearson continues to be unable to review and sign off prior to their release.

“I realize that recent events are disappointing to everyone which is my responsibility to create the appropriate tone for that organization,” Pearson said in a statement.

Even prior to the SEC revelation, analysts were cautious around the firm’s outlook.

Douglas Miehm at RBC Capital Markets believes an investment community will be pleased to see Pearson’s return before audited answers are presented and also the random committee completes its overview of Valeant’s financial reporting and internal controls.

“Having said this, we have seen the overall approach to rescheduling Q4 and withdrawing guidance after reiterating it in January as likely to carry excess fat until Mr. Pearson has been able to get in touch with the Street and supply some clarity,’ Miehm said inside a research note.

As a result, the analyst expects Valeant shares is going to be weak until there is certainty about its Q4 release, committee report, and 10-k filing.

TD Securities downgraded Valeant to hold from buy to reflect the lower visibility going forward.

“We believe that the recent developments have the possibility to exacerbate what has already been a protracted decline in investor confidence,” analyst Lennox Gibbs told clients, cutting his price target around the stock to US$110 from US$155.

Although management didn’t disclose the actual drivers behind the decision to withdraw guidance, Gibbs suggested Philidor accounting, the transition to a new fulfilment program with Walgreens and on-going Federal investigations could all be responsible.

Moody’s Investors Service on Monday placed its ratings on Valeant’s debt under review for any downgrade. It cited concerns the company’s performance is weaker than previously expected, which may impede its deleveraging plans.

“Valeant is confronting significant scrutiny on its pricing practices, including those found on products acquired through acquisitions, and uncertainty related to government investigations,” Moody’s said.

Valeant also said it will split up the chief executive and chairman roles, with board member Robert Ingram overtaking the second position from Pearson – an incremental step to improving corporate governance.

“Our hope is that the Ad Hoc Committee will be able to conclude its efforts soon in relation to financial reporting and internal control matters, so we can all focus on building the best company we are able to,” Ingram said inside a statement.

Valeant’s former chief financial officer, Howard Schiller, who served as interim chief executive in Pearson’s absence, will transition from that role but remain on the board.

Financial Post and Bloomberg News

CALGARY C The British Columbia government stands to gain $2.9 billion per year if three liquefied natural gas vegetation is built on the province’s coastline, according to a new report funded by one of the LNG project proponents.

The Conference Board of Canada noted in a new report, paid for with a subsidiary of Malaysia’s state-owned oil company and LNG proponent Petronas, that “there is a superb amount of uncertainty all around the number, size and timing on the projects that might proceed as the (LNG) industry is constantly on the develop.” However, the Monday report suggests that this kind of industry could reduce the province’s unemployment rate and boost economic activity.

The think-tank’s report noted that three LNG projects, with a cumulative creation of 30 mega tonnes of LNG each year, could generate $6.2 billion in revenues for multiple levels of government and produce more people into B.C., boosting the province’s inflation rate by about 0.25 per cent.

Related

AltaGas Ltd shelves Douglas Channel LNG plans amid global surplusLNG projects progressing in Quebec, while B.C. faces delays

The Conference Board did note that no projects happen to be sanctioned yet, and for that reason none are currently under construction.

Last week, AltaGas Ltd. announced it absolutely was unable to find enough people to buy LNG from its proposed Douglas Channel facility and the company shelved the work consequently.

Douglas Channel LNG was widely one among the projects that appears to be built in B.C. Analysts now say the company’s wherewithal to find sufficient customers for a smaller scale LNG project is a bearish sign for the larger projects.

“We have made significant progress in development and permitting of the project, and that we believe the work could deliver LNG to Japan at very competitive prices. However, with no meaningful off-take agreement, the consortium can’t continue the introduction of the work,” AltaGas CEO David Cornhill said during his company’s fourth-quarter earnings call.

AltaGas is partnered with Tokyo-based Idemitsu Kosan Global on the project, which was originally scheduled to become cooling gas to the liquid state for export by 2018. AltaGas didn’t give a timeline for when it might revisit the Douglas Channel LNG project.

In February, Royal Dutch Shell PLC said it expects to make a final investment decision on its LNG Canada project near Kitimat later this year.

Petronas, which funded the report through its Calgary-based subsidiary Progress Energy, announced last year it would build its North american LNG project when the province’s LNG taxes were manageable and pending the end result of environmental reviews, that are still ongoing.

Financial Post

gmorgan@nationalpost.com

Twitter.com/geoffreymorgan

Lending Loop, a Canadian fintech firm which was extending U.S.-style peer-to-peer crowdsourced loans to small businesses, has stopped posting new loan requests on its website although it meets regulators to ensure its model “complies with all of applicable laws.” 

A notice to that effect was posted around the company’s website Tuesday. 

The halt within the posting of recent applications through the marketplace lender was characterized as “voluntary and temporary” and “an act of excellent faith.”

The notice did not name the regulatory authorities Lending Loop is within discussions with, however the Ontario Securities Commission issued a public notice to all marketplace lenders this past year, urging these to seek legal and regulatory advice to make sure their operations were adhering to securities law or relying on appropriate exemptions.

Lending Loop launched in October and the founders were coy about how exactly the firm could offer U.S.-style peer-to-peer lending. The model allows a person with $50 to pool their cash in larger loans that are extended to small businesses. 

Related

Lending Loop launches U.S.-style peer-to-peer lending in CanadaFintech lender cries foul after two big banks cut access to cash transfer servicesOSC says peer-to-peers lenders might be susceptible to securities law

Other marketplace lenders such as Borrowell and Grouplend, that is now called Grow, opted to tap only  institutional and well-heeled “accredited” investors to back loans to guarantee they are onside with regulators. 

Cato Pastoll, one of the founders of Lending Loop, said his firm’s peer-to-peer model was well-liked by people who don’t meet the income and asset thresholds to be considered accredited investors. After launch, Lending Loop quickly attracted interest from 450 individual lenders, with 100 becoming active participants, Pastoll told the Financial Post in November.

In an email Tuesday, he explained he was not able to comment around the regulatory discussions.

Lending Loop’s website notice indicates the upstart will continue to fund new loans with capital that is separate from its lending platform although it continues talks with regulators. 

“Additionally, Lending Loop continues to service all funded loans, and all sorts of existing lending partners will be able to access their Lending Loop accounts and withdraw available funds at no cost,” the notice says.