Published: 02:18 PM EST (11:18 AM PST)
Apple is said to be weighing its options in opening a flagship store in Brazil, while the company continues to expand across Canada with a new mall location in Ontario.
In an interview on Thursday, an official Brazilian Apple reseller said the Cupertino, Calif. company is thinking about debuting an official Apple Store in the world's fifth most populated country, according to website G1.
Germano Grings, vice president of Brazil's largest Apple reseller Herval, said that he is sure that Apple is interested in opening their own shop in Brazil, which would add to the 31 existing official "premium" resellers spread across the country.
"They will not open where we are," Grings said of possibility of a future Apple Store in Brazil. He goes on to say that Apple usually opens only one or two flagship stores in important capitals, however Grings fails to estimate what effect an official location would have on his company's business.
The initial investment in opening a licensed Apple retail store is high, and Grings estimates that Herval spent between $1 million and $5 million for each of its 19 stores. Apple holds the premium retail outlets to a high standard, and owners have little control over terms of operation.
"Today, there are Apple employees who make over our stores," Grings said. "[It] works like a religion, a bible. The [Apple premium resellers outlet] is a copy of a U.S. Apple store, you can't do anything about of it."
Grings warns that entering the Brazilian market is a difficult undertaking, however he believes that iDevices will one day become as popular in South America as they are in countries like the U.S.
"I poke a lot [of fun] and even joked that if they need a partner, I'm here and open up for them," Grings said. "Imagine a store like 5th Avenue in New York, on Avenida Paulista [São Paulo]? How wonderful would it be?"
In addition to a possible Brazil debut, news broke that Canada's newest Apple Store will be located in Ontario, according to Apple retail blog ifoAppleStore.com.
The store is planned to open in London, Ontario's Masonville Place mall, and is fifty miles away from the Conestoga Mall Apple Store in Waterloo.
Real estate sources say the company is ready take over the nearly square 6.176 square-foot space with a 71-foot facade that the bankrupt Eddie Bauer will vacate this week.
As further confirmation, city officials are said to be reviewing an unnamed $3 million construction project within the mall that sports the iconic Apple logo.
http://www.appleinsider.com/articles/11/12/30/apple_retail_mulling_brazil_store_as_canadian_expansion_continues.html
Friday, 30 December 2011
Thursday, 29 December 2011
Chinese firms seek overseas expansion in crisis
By: Xinhua
December 29th, 2012
BEIJING - While many transnational companies tighten investment in developed economies in face of a lingering economic crisis to ease profit declines, Chinese firms see possibilities of making their investments mutually beneficial there.
China Three Gorges Corp (TGC), the operator of the world's biggest dam, last week won a bid to buy a 21 percent stake in the Portuguese utility Energias de Portugal for 2.69 billion euros, marking the first time for a large Chinese firm to join the privatization of eurozone nations amid the continent's debt crisis.
The deal is Portugal's first and biggest project of a privatization program under a 78-billion-euro bailout package agreed by the EU and the International Monetary Fund (IMF) in May. It is also expected to boost the Chinese power generator's overseas expansion.
The move highlights the willingness of Chinese firms to invest and help invigorate struggling economies against the backdrop of the worsening eurozone debt crisis and rising global uncertainties.
Portugal's Treasury Secretary Maria Luis Albuquerque hailed the TGC proposal as "a vote of confidence in the Portuguese economy."
The desire of Chinese investment, which can bring local jobs and help consumers, is again on a rise in the EU and the United States based on confidence in China's growth, said Lin Shunjie, deputy secretary general of the China Chamber of International Commerce.
"The debt woes indeed provide Chinese companies with good business opportunities," Lin said, noting that more deals have been concluded this year as weakened economies seek buyers for their distressed assets to help resolve financial problems.
Chinese firms have been on a buying spree this year. Following Chinese oil giant CNOOC's acquisition of Canadian oil sands developer OPTI in July, Sinopec recently completed a 2.2-billion-Canadian-dollar transaction to takeover Canada's Daylight Energy Ltd.
China's Yanzhou Coal Mining also said last week it has proposed buying 77 percent of Australia's Gloucester Coal. The deal could create Australia's largest listed coal firm if approved.
Since China's entry into the World Trade Organization in 2001, the country's outbound direct investment (ODI) has been on the rise, especially after the outbreak of the global economic crisis.
The country's ODI hit $68.81 billion in 2010, taking up 5.2 percent of global capital flows and exceeded the ODI of both Japan the United Kingdom for the first time to become the fifth largest in the world.
China's overseas investment has boosted its own growth and contributed positively to recipient countries, said Deputy Commerce Minister Chen Jian at an investment forum last month.
Chinese overseas affiliates, which totaled 16,000 units as of 2010, employ nearly 800,000 people and pay $10 billion in taxes each year, according to an IMF study.
China's overseas investment is likely to grow 20 to 30 percent annually in the next two to three years, an Ernst & Young report said.
Over the past decade, Chinese investment has proved nonthreatening to many countries, but instead, it can help them pull through crises; yet Chinese investors still face unfair treatment, Lin said.
Many proposed Chinese deals in the overseas market have been blocked by national security or technology issues, Lin said. The Chinese telecom giant Huawei has repeatedly been rebuffed from making deals in the United States over security concerns during the past few years.
In the latest outcry, China's Zhejiang Youngman Lotus Automobile and Pang Da Automobile Trade Co. were rejected in a deal to purchase Swedish automaker Saab, as Saab's former parent company GM refused the technology license transfers. The refusal finally led to Saab's bankruptcy.
To create a fair environment for Chinese investment, Lin called for developed economies to "remove political factors in reviewing Chinese deal proposals in order."
Besides external factors, Chinese investors should also recognize their own weaknesses to cope with these setbacks, said Wang Zhile, director of Beijing New-Century Academy on Transnational Corporations.
Wang said Chinese firms are increasingly challenged by compliance management, which requires familiarity with local laws and rules and corporate regulations in obtained businesses. Communications with non-governmental organizations and focusing on local public appeals are also important.
"We cannot count on the outbreak of financial crisis to lift China's 'going global' drive, but Chinese firms can take the chance to improve their competitiveness," Lin said.
http://www.chinadaily.com.cn/usa/business/2011-12/29/content_14349928.htm
December 29th, 2012
BEIJING - While many transnational companies tighten investment in developed economies in face of a lingering economic crisis to ease profit declines, Chinese firms see possibilities of making their investments mutually beneficial there.
China Three Gorges Corp (TGC), the operator of the world's biggest dam, last week won a bid to buy a 21 percent stake in the Portuguese utility Energias de Portugal for 2.69 billion euros, marking the first time for a large Chinese firm to join the privatization of eurozone nations amid the continent's debt crisis.
The deal is Portugal's first and biggest project of a privatization program under a 78-billion-euro bailout package agreed by the EU and the International Monetary Fund (IMF) in May. It is also expected to boost the Chinese power generator's overseas expansion.
The move highlights the willingness of Chinese firms to invest and help invigorate struggling economies against the backdrop of the worsening eurozone debt crisis and rising global uncertainties.
Portugal's Treasury Secretary Maria Luis Albuquerque hailed the TGC proposal as "a vote of confidence in the Portuguese economy."
The desire of Chinese investment, which can bring local jobs and help consumers, is again on a rise in the EU and the United States based on confidence in China's growth, said Lin Shunjie, deputy secretary general of the China Chamber of International Commerce.
"The debt woes indeed provide Chinese companies with good business opportunities," Lin said, noting that more deals have been concluded this year as weakened economies seek buyers for their distressed assets to help resolve financial problems.
Chinese firms have been on a buying spree this year. Following Chinese oil giant CNOOC's acquisition of Canadian oil sands developer OPTI in July, Sinopec recently completed a 2.2-billion-Canadian-dollar transaction to takeover Canada's Daylight Energy Ltd.
China's Yanzhou Coal Mining also said last week it has proposed buying 77 percent of Australia's Gloucester Coal. The deal could create Australia's largest listed coal firm if approved.
Since China's entry into the World Trade Organization in 2001, the country's outbound direct investment (ODI) has been on the rise, especially after the outbreak of the global economic crisis.
The country's ODI hit $68.81 billion in 2010, taking up 5.2 percent of global capital flows and exceeded the ODI of both Japan the United Kingdom for the first time to become the fifth largest in the world.
China's overseas investment has boosted its own growth and contributed positively to recipient countries, said Deputy Commerce Minister Chen Jian at an investment forum last month.
Chinese overseas affiliates, which totaled 16,000 units as of 2010, employ nearly 800,000 people and pay $10 billion in taxes each year, according to an IMF study.
China's overseas investment is likely to grow 20 to 30 percent annually in the next two to three years, an Ernst & Young report said.
Over the past decade, Chinese investment has proved nonthreatening to many countries, but instead, it can help them pull through crises; yet Chinese investors still face unfair treatment, Lin said.
Many proposed Chinese deals in the overseas market have been blocked by national security or technology issues, Lin said. The Chinese telecom giant Huawei has repeatedly been rebuffed from making deals in the United States over security concerns during the past few years.
In the latest outcry, China's Zhejiang Youngman Lotus Automobile and Pang Da Automobile Trade Co. were rejected in a deal to purchase Swedish automaker Saab, as Saab's former parent company GM refused the technology license transfers. The refusal finally led to Saab's bankruptcy.
To create a fair environment for Chinese investment, Lin called for developed economies to "remove political factors in reviewing Chinese deal proposals in order."
Besides external factors, Chinese investors should also recognize their own weaknesses to cope with these setbacks, said Wang Zhile, director of Beijing New-Century Academy on Transnational Corporations.
Wang said Chinese firms are increasingly challenged by compliance management, which requires familiarity with local laws and rules and corporate regulations in obtained businesses. Communications with non-governmental organizations and focusing on local public appeals are also important.
"We cannot count on the outbreak of financial crisis to lift China's 'going global' drive, but Chinese firms can take the chance to improve their competitiveness," Lin said.
http://www.chinadaily.com.cn/usa/business/2011-12/29/content_14349928.htm
Wednesday, 28 December 2011
Sears faces uncertain future in Canada: analyst
Updated: Wed Dec. 28 2011 8:22:32 PM
CTVNews.ca StaffSears
Canada won't close any stores here even as retail competition heats up and consumers look for deeper discounts on merchandise.
Sears Holdings Corp. in the U.S. announced plans Tuesday to close between 100 and 120 Sears and Kmart stores and cut inventory after slow sales during the holidays. The company has more than 4,000 stores in the U.S. and Canada.
The Canadian retailer has made changes recently to its management team because of falling sales, but some analysts think it should probably close stores that aren't performing well.
Sears Canada laid off 70 employees from its head office in Toronto last month and lost nearly $47 million in the previous quarter.
Its stock fell more than five per cent in Wednesday morning trading on the Toronto Stock Exchange.
One analyst told Canada AM on Wednesday the company needs to find its niche or it will lose to more aggressive competitors.
"Whenever you see a retailer doing the types of rationalizations that Sears is doing, clearly this does not bode well," said Robert Soroka in an interview from Montreal.
"There's obviously some concern as to whether they could sustain themselves," he said.
Retailers like Sears must also consider the addition of aggressive U.S. companies like Target to the marketplace, which plans to open about 135 stores in Canada beginning in March 2013, and the relative success of The Bay, which has been offering consumers deep discounts, Soroka said.
"Sears has maintained is antiquated position for a very a long time. It is a mid-range market retailer for a market that is really diluted," he said.
While The Bay also considers itself a mid-range market retailer, its promotions and discounts appeal to cost-conscious consumers, he said.
"They are very strong with respect to promotion and as a result they are getting that discount consumer," Soroka said.
It's hard to say whether these factors will force Sears to close stores or cut inventory in Canada, he said.
A spokesperson for Sears Canada said the company has no plans to shutter stores.
"There are no Sears stores being closed in Canada and people shouldn't speculate about something that isn't happening," Vincent Power, director of corporate communications for Sears Canada, told CTVNews.ca by phone.
"It's a U.S.-based story and to talk about Sears stores closing in Canada is erroneous."
Soroka said the biggest change in the market is brand loyalty, which doesn't exist in the Canadian retail landscape anymore.
"We're very sharp consumers. We're looking for the best deal, the best merchandise. We're not necessarily committed to a particular brand name," Soroka said.
If Sears is counting on consumer loyalty to carry its brand in Canada, it's "putting its money on the wrong horse," he said.
http://ottawa.ctv.ca/servlet/an/local/CTVNews/20111228/sears_canada_cuts_soroka_111228/20111228/?hub=OttawaHome
CTVNews.ca StaffSears
Canada won't close any stores here even as retail competition heats up and consumers look for deeper discounts on merchandise.
Sears Holdings Corp. in the U.S. announced plans Tuesday to close between 100 and 120 Sears and Kmart stores and cut inventory after slow sales during the holidays. The company has more than 4,000 stores in the U.S. and Canada.
The Canadian retailer has made changes recently to its management team because of falling sales, but some analysts think it should probably close stores that aren't performing well.
Sears Canada laid off 70 employees from its head office in Toronto last month and lost nearly $47 million in the previous quarter.
Its stock fell more than five per cent in Wednesday morning trading on the Toronto Stock Exchange.
One analyst told Canada AM on Wednesday the company needs to find its niche or it will lose to more aggressive competitors.
"Whenever you see a retailer doing the types of rationalizations that Sears is doing, clearly this does not bode well," said Robert Soroka in an interview from Montreal.
"There's obviously some concern as to whether they could sustain themselves," he said.
Retailers like Sears must also consider the addition of aggressive U.S. companies like Target to the marketplace, which plans to open about 135 stores in Canada beginning in March 2013, and the relative success of The Bay, which has been offering consumers deep discounts, Soroka said.
"Sears has maintained is antiquated position for a very a long time. It is a mid-range market retailer for a market that is really diluted," he said.
While The Bay also considers itself a mid-range market retailer, its promotions and discounts appeal to cost-conscious consumers, he said.
"They are very strong with respect to promotion and as a result they are getting that discount consumer," Soroka said.
It's hard to say whether these factors will force Sears to close stores or cut inventory in Canada, he said.
A spokesperson for Sears Canada said the company has no plans to shutter stores.
"There are no Sears stores being closed in Canada and people shouldn't speculate about something that isn't happening," Vincent Power, director of corporate communications for Sears Canada, told CTVNews.ca by phone.
"It's a U.S.-based story and to talk about Sears stores closing in Canada is erroneous."
Soroka said the biggest change in the market is brand loyalty, which doesn't exist in the Canadian retail landscape anymore.
"We're very sharp consumers. We're looking for the best deal, the best merchandise. We're not necessarily committed to a particular brand name," Soroka said.
If Sears is counting on consumer loyalty to carry its brand in Canada, it's "putting its money on the wrong horse," he said.
http://ottawa.ctv.ca/servlet/an/local/CTVNews/20111228/sears_canada_cuts_soroka_111228/20111228/?hub=OttawaHome
Canadian Auto Rebound Lags Behind US as Loonie Continues to Rise
28/12/2011 | By: Jason Siu
Reports are coming in that investment in Canada’s auto plants may fall to just $1.2 billion this year, the lowest since the mid-1980s. It’s also 62-percent lower than the past decade’s average according to Bank of Nova Scotia, which means Canada will continue to lag behind. To compare, Ford is planning to invest $13.3 billion in US plants over the next four years, leaving very little funding left for Canada’s plants. In fact, Ford this year closed their St. Thomas Assembly Plant in Ontario that had made their Crown Victoria and Lincoln Town Car.
This is a vast change of events compared to 2003, when Ontario, Canada was the largest North American producer of vehicles – taking the spot from the state of Michigan. But now their surging currency and companies in the US cutting labor costs has shifted investment back to the States.
Another factor impacting the spending is the fact that the US has a new labor agreement with the United Auto Workers (UAW), helping level the labor costs compared to foreign rivals. The Canadian Auto Workers (CAW) however are working with the automakers for a new contract for 2012. Unfortunately though, the CAW has fought many of the cost cuts the UAW has accepted.
http://www.autoguide.com/auto-news/2011/12/canadian-auto-rebound-lags-behind-us-as-loonie-continues-to-rise.html
Reports are coming in that investment in Canada’s auto plants may fall to just $1.2 billion this year, the lowest since the mid-1980s. It’s also 62-percent lower than the past decade’s average according to Bank of Nova Scotia, which means Canada will continue to lag behind. To compare, Ford is planning to invest $13.3 billion in US plants over the next four years, leaving very little funding left for Canada’s plants. In fact, Ford this year closed their St. Thomas Assembly Plant in Ontario that had made their Crown Victoria and Lincoln Town Car.
This is a vast change of events compared to 2003, when Ontario, Canada was the largest North American producer of vehicles – taking the spot from the state of Michigan. But now their surging currency and companies in the US cutting labor costs has shifted investment back to the States.
Another factor impacting the spending is the fact that the US has a new labor agreement with the United Auto Workers (UAW), helping level the labor costs compared to foreign rivals. The Canadian Auto Workers (CAW) however are working with the automakers for a new contract for 2012. Unfortunately though, the CAW has fought many of the cost cuts the UAW has accepted.
http://www.autoguide.com/auto-news/2011/12/canadian-auto-rebound-lags-behind-us-as-loonie-continues-to-rise.html
Tuesday, 27 December 2011
2012 Looks Promising for Energy Investors
By Abantika Chatterjee
Rising oil prices and increased demand for oil and natural gas have set the ball rolling for exploration and production for the new year. With oil prices hovering around the $100-per-barrel mark, companies across the world have increased their focus on production. A recent survey by Barclay's Capital showed that major E&P companies have hiked their planned expenditures for 2012, hitting a cumulative figure of $600 billion. This indicates a feverish pitch in E&P activities in 2012 that should rake in moola for the companies and their investors. Read along and I will tell you where well-known energy companies are focusing their budgets in 2012.
Rising oil prices and increased demand for oil and natural gas have set the ball rolling for exploration and production for the new year. With oil prices hovering around the $100-per-barrel mark, companies across the world have increased their focus on production. A recent survey by Barclay's Capital showed that major E&P companies have hiked their planned expenditures for 2012, hitting a cumulative figure of $600 billion. This indicates a feverish pitch in E&P activities in 2012 that should rake in moola for the companies and their investors. Read along and I will tell you where well-known energy companies are focusing their budgets in 2012.
The numbers
Company filings, Web sources.
We can see that four of the companies are exhibiting double-digit growth in their budget allocation. A huge portion of the budget is going to go into finding and developing natural gas reserves since the world's energy demand has been witnessing a shift toward it. The emergence of natural gas as the best alternative to the continually depleting oil reserves has pushed oil majors and minors to grab land in newly found unconventional reserves. This has also created enough opportunities for large-cap oil-field-services companies such as Schlumberger, Baker Hughes, Halliburton, and Weatherford, as the unconventional plays require lot of high-tech equipment and severe-site maintenance.
Focus areasNow let's shed some light on the places the money will go. Projects witnessing increased capital spending are Chevron's Wheatstone and Gordon Australian liquefied natural gas (LNG) projects; the Australia Pacific LNG project, which is a joint venture of ConocoPhillips, Origin Energy, and Sinopec; and Exxon and Interoil's Papua New �Guinea projects. Apart from being rich in reserves, Australia and Papua New Guinea are well-located to serve Asia, with China and India acting as perfect markets. After the Fukushima Daiichi nuclear disaster in March, Japan has also become a target market for project operators in the region as natural gas is seen as safer than nuclear energy.
Other places drawing oil and services companies are the U.S. shale plays of Bakken, Barnett, Eagle Ford, Woodford and Marcellus. Among them, Bakken has experienced the highest growth in the past five years. According to the U.S. Geological Survey, there are 3.65 billion barrels of recoverable crude oil present in the Bakken. ExxonMobil has 410,000 net acres of leasehold and seven operating rigs in the Bakken. The company has also invested in the Woodford shale.
The oil sands of Canada are also attracting investments from both domestic and international players. The oil sands provide these players a good source of supplying crude oil to the U.S. If TransCanada gets approval for its Keystone XL pipeline, oil sands prospects will brighten up further. A majority of these projects are scheduled to operate from 2014, with a few adding to production post-2017, and some as early as 2012.
Key driversHigh oil prices are one of the main drivers behind the increased capital spending of oil majors. With oil futures settling between $101 and $110 for WTI and Brent, respectively, oil and gas companies have increased efforts to produce more and cash in on the price rise.
The increased demand for natural gas is another driver persuading companies to add more natural gas assets to their project portfolios. Demand from emerging markets and shale discoveries in Latin America, apart from the proven reserves of the U.S., Qatar, Iraq, and Canada have given enough reasons for energy companies to invest.
Foolish bottom line Rising oil prices and burgeoning natural gas demand stand to play a vital role in shaping the energy sector in 2012, and the increased budget of oil players seems worth spending. If you're looking for top energy plays to profit of the oil boom, check out The Motley Fool's "3 Stocks for $100 Oil." You can download this special report for free by clicking here.
http://www.msnbc.msn.com/id/45796716/ns/business-motley_fool/t/looks-promising-energy-investors/
Company | 2011 Capital and Exploratory Expenditures (in billions) | 2012 Estimated Budget (in billions) | Change |
|---|---|---|---|
| ExxonMobil | $33-$37 | $33-$37 | -- |
| Chevron | $28.0 | $32.7 | 17% |
| PetroChina | $26.8 | $30.0 | 12% |
| Royal Dutch Shell | $25-$27 | $25-$27 | -- |
| Total | $20 | $23 | 15% |
| BP | $19 | $20 | 7% |
| ConocoPhillips | $12 | $14 | 17% |
| Chesapeake | $5.0-$5.4 | $5.4-$5.8 | 7% |
We can see that four of the companies are exhibiting double-digit growth in their budget allocation. A huge portion of the budget is going to go into finding and developing natural gas reserves since the world's energy demand has been witnessing a shift toward it. The emergence of natural gas as the best alternative to the continually depleting oil reserves has pushed oil majors and minors to grab land in newly found unconventional reserves. This has also created enough opportunities for large-cap oil-field-services companies such as Schlumberger, Baker Hughes, Halliburton, and Weatherford, as the unconventional plays require lot of high-tech equipment and severe-site maintenance.
Focus areasNow let's shed some light on the places the money will go. Projects witnessing increased capital spending are Chevron's Wheatstone and Gordon Australian liquefied natural gas (LNG) projects; the Australia Pacific LNG project, which is a joint venture of ConocoPhillips, Origin Energy, and Sinopec; and Exxon and Interoil's Papua New �Guinea projects. Apart from being rich in reserves, Australia and Papua New Guinea are well-located to serve Asia, with China and India acting as perfect markets. After the Fukushima Daiichi nuclear disaster in March, Japan has also become a target market for project operators in the region as natural gas is seen as safer than nuclear energy.
Other places drawing oil and services companies are the U.S. shale plays of Bakken, Barnett, Eagle Ford, Woodford and Marcellus. Among them, Bakken has experienced the highest growth in the past five years. According to the U.S. Geological Survey, there are 3.65 billion barrels of recoverable crude oil present in the Bakken. ExxonMobil has 410,000 net acres of leasehold and seven operating rigs in the Bakken. The company has also invested in the Woodford shale.
The oil sands of Canada are also attracting investments from both domestic and international players. The oil sands provide these players a good source of supplying crude oil to the U.S. If TransCanada gets approval for its Keystone XL pipeline, oil sands prospects will brighten up further. A majority of these projects are scheduled to operate from 2014, with a few adding to production post-2017, and some as early as 2012.
Key driversHigh oil prices are one of the main drivers behind the increased capital spending of oil majors. With oil futures settling between $101 and $110 for WTI and Brent, respectively, oil and gas companies have increased efforts to produce more and cash in on the price rise.
The increased demand for natural gas is another driver persuading companies to add more natural gas assets to their project portfolios. Demand from emerging markets and shale discoveries in Latin America, apart from the proven reserves of the U.S., Qatar, Iraq, and Canada have given enough reasons for energy companies to invest.
Foolish bottom line Rising oil prices and burgeoning natural gas demand stand to play a vital role in shaping the energy sector in 2012, and the increased budget of oil players seems worth spending. If you're looking for top energy plays to profit of the oil boom, check out The Motley Fool's "3 Stocks for $100 Oil." You can download this special report for free by clicking here.
http://www.msnbc.msn.com/id/45796716/ns/business-motley_fool/t/looks-promising-energy-investors/
Monday, 26 December 2011
Retail invasion of Canada shows no sign of slowing
Mon Dec. 26 2011 6:48:12 AM | The Canadian PressTORONTO —
The influx of U.S. and foreign chains to Canada shows no sign of slowing as we head into a new year.
Marshalls, Express and Topshop were some of the retailers that opened up shop in Canada in 2011.
Another U.S. company appears poised to launch.
Catherine Fisher of Ann Incorporated, the parent company of Ann Taylor and Loft, says a formal announcement hasn't been made.
But she says they're "actively pursuing entry into the Canadian market" expected for late in 2012.
And U.S. discount giant Target is set to enter the Canadian market in 2013.
Daniel Baer of Ernst and Young says Canadian retailers will need to exploit their knowledge of the consumer and use the fact that they're homegrown to their competitive advantage.
He also notes companies won't just be battling for dollars.
Baer foresees more competition for retail talent like personnel to fill management and head office positions.
Kathy Perotta of The NPD Group says Canadian retailers need to work towards keeping -- and growing -- their existing share of the pie.
She says the total apparel and basics market is worth roughly 23.3 billion dollars, so new entrants to Canada are going to take their share from somebody.
http://www.cp24.com/servlet/an/local/CTVNews/20111226/121226_retail_US_Canada/20111226/?hub=CP24Home
The influx of U.S. and foreign chains to Canada shows no sign of slowing as we head into a new year.
Marshalls, Express and Topshop were some of the retailers that opened up shop in Canada in 2011.
Another U.S. company appears poised to launch.
Catherine Fisher of Ann Incorporated, the parent company of Ann Taylor and Loft, says a formal announcement hasn't been made.
But she says they're "actively pursuing entry into the Canadian market" expected for late in 2012.
And U.S. discount giant Target is set to enter the Canadian market in 2013.
Daniel Baer of Ernst and Young says Canadian retailers will need to exploit their knowledge of the consumer and use the fact that they're homegrown to their competitive advantage.
He also notes companies won't just be battling for dollars.
Baer foresees more competition for retail talent like personnel to fill management and head office positions.
Kathy Perotta of The NPD Group says Canadian retailers need to work towards keeping -- and growing -- their existing share of the pie.
She says the total apparel and basics market is worth roughly 23.3 billion dollars, so new entrants to Canada are going to take their share from somebody.
http://www.cp24.com/servlet/an/local/CTVNews/20111226/121226_retail_US_Canada/20111226/?hub=CP24Home
Sunday, 25 December 2011
Harper sees trade deals as key to his political success
JOHN IBBITSON |Columnist profile
OTTAWA— From Monday's Globe and Mail
Published Sunday, Dec. 25, 2011 7:25PM EST
Last updated Sunday, Dec. 25, 2011 11:21PM EST
Others may judge the Harper government by what it achieves, or fails to achieve, on the environmental front, with first nations or in making government more accountable. But Stephen Harper judges himself on how well his government manages the economy. In that context, nothing is more important to the Conservatives than trade.
By this time next year, either the Prime Minister will have one major agreement in his pocket and several more in the works, or this administration, by its own accounting, will have failed one of its most crucial tests.
The good news for the Tories is that they may soon clear the first and biggest hurdle. Government sources predict that a signed Canada-European Union Trade Agreement will be in place by February or March.
Some of the terms of that agreement will be contentious. EU businesses will have greater access to Canadian government-procurement contracts, for example. And dairy quotas for European imports will probably be raised, in exchange for increased quotas for Canadian pork exports.
But the deal is likely to be worth the concessions. Despite its problems – and they are legion – the EU remains the world’s largest common market, with 500- million people and a collective GDP of $16-trillion.
Improving access to that market is vital to this country’s long-term prosperity, which is why provincial governments are reportedly onside. (Negotiators also insist that the deal will clear all 27 European parliaments without difficulty. We’ll see.)
The EU agreement is vital to the Harper government’s second-most important goal: getting the member nations of the Trans Pacific Partnership to accept Canada’s application to join.
The TPP is emerging as a potentially powerful new trade bloc, as the Obama administration seeks to fashion a Pacific economic consortium that could rival China in size and influence.
Canada wants to be part of the partnership but has been shut out because the Conservative government continues to protect dairy and poultry farmers from foreign competition.
The word is that the Conservatives will use the agriculture provisions of the EU treaty to show the Pacific nations that Canada is willing to be flexible on agricultural subsidies. Maybe it will work; maybe it won’t.
If it doesn’t, then Mr. Harper will have to make an enormously difficult choice: give up on joining the Trans Pacific Partnership, which would be a severe blow to this country’s Pacific aspirations, or scrap supply management, which will enrage the all-powerful dairy lobby.
At the same time, the Harper government is exploring with the Chinese whether there is enough common ground to launch talks on a free-trade agreement, or whether to pursue sectoral negotiations instead.
The Conservatives have already negotiated a Foreign Investment Protection Agreement, or FIPA, as part of their trade negotiations with India. Both countries are waiting until Mr. Harper visits there next year to formally announce it.
As well, International Trade Minister Ed Fast will decide in 2012 whether to restart the stalled trade negotiations with South Korea, or abandon them entirely. Pork producers are anxious to see a deal, since the U.S. and Korea now have one, but concerns over Korean protectionism in the auto sector are holding that agreement back.
Hopes for progress in trade talks with Mercosur, the South American trade bloc, are fading. Argentina, in particular, is more interested in throwing up new barriers to trade than in tearing down existing ones.
But if the Harper government can sign agreements with the EU, China and India, and worm its way into the Pacific Partnership talks, it will be able to claim a robust record in expanding and diversifying trade.
If it can’t, then the Conservatives’ talk of protecting jobs and expanding overseas business opportunities will have proven to be just that: talk.
By the end of next year, we should know which it is.
SOURCE: http://www.theglobeandmail.com/news/politics/harper-sees-trade-deals-as-key-to-his-political-success/article2283361/?utm_medium=Feeds%3A%20RSS%2FAtom&utm_source=Politics&utm_content=2283361
OTTAWA— From Monday's Globe and Mail
Published Sunday, Dec. 25, 2011 7:25PM EST
Last updated Sunday, Dec. 25, 2011 11:21PM EST
Others may judge the Harper government by what it achieves, or fails to achieve, on the environmental front, with first nations or in making government more accountable. But Stephen Harper judges himself on how well his government manages the economy. In that context, nothing is more important to the Conservatives than trade.
By this time next year, either the Prime Minister will have one major agreement in his pocket and several more in the works, or this administration, by its own accounting, will have failed one of its most crucial tests.
The good news for the Tories is that they may soon clear the first and biggest hurdle. Government sources predict that a signed Canada-European Union Trade Agreement will be in place by February or March.
Some of the terms of that agreement will be contentious. EU businesses will have greater access to Canadian government-procurement contracts, for example. And dairy quotas for European imports will probably be raised, in exchange for increased quotas for Canadian pork exports.
But the deal is likely to be worth the concessions. Despite its problems – and they are legion – the EU remains the world’s largest common market, with 500- million people and a collective GDP of $16-trillion.
Improving access to that market is vital to this country’s long-term prosperity, which is why provincial governments are reportedly onside. (Negotiators also insist that the deal will clear all 27 European parliaments without difficulty. We’ll see.)
The EU agreement is vital to the Harper government’s second-most important goal: getting the member nations of the Trans Pacific Partnership to accept Canada’s application to join.
The TPP is emerging as a potentially powerful new trade bloc, as the Obama administration seeks to fashion a Pacific economic consortium that could rival China in size and influence.
Canada wants to be part of the partnership but has been shut out because the Conservative government continues to protect dairy and poultry farmers from foreign competition.
The word is that the Conservatives will use the agriculture provisions of the EU treaty to show the Pacific nations that Canada is willing to be flexible on agricultural subsidies. Maybe it will work; maybe it won’t.
If it doesn’t, then Mr. Harper will have to make an enormously difficult choice: give up on joining the Trans Pacific Partnership, which would be a severe blow to this country’s Pacific aspirations, or scrap supply management, which will enrage the all-powerful dairy lobby.
At the same time, the Harper government is exploring with the Chinese whether there is enough common ground to launch talks on a free-trade agreement, or whether to pursue sectoral negotiations instead.
The Conservatives have already negotiated a Foreign Investment Protection Agreement, or FIPA, as part of their trade negotiations with India. Both countries are waiting until Mr. Harper visits there next year to formally announce it.
As well, International Trade Minister Ed Fast will decide in 2012 whether to restart the stalled trade negotiations with South Korea, or abandon them entirely. Pork producers are anxious to see a deal, since the U.S. and Korea now have one, but concerns over Korean protectionism in the auto sector are holding that agreement back.
Hopes for progress in trade talks with Mercosur, the South American trade bloc, are fading. Argentina, in particular, is more interested in throwing up new barriers to trade than in tearing down existing ones.
But if the Harper government can sign agreements with the EU, China and India, and worm its way into the Pacific Partnership talks, it will be able to claim a robust record in expanding and diversifying trade.
If it can’t, then the Conservatives’ talk of protecting jobs and expanding overseas business opportunities will have proven to be just that: talk.
By the end of next year, we should know which it is.
SOURCE: http://www.theglobeandmail.com/news/politics/harper-sees-trade-deals-as-key-to-his-political-success/article2283361/?utm_medium=Feeds%3A%20RSS%2FAtom&utm_source=Politics&utm_content=2283361
Saturday, 24 December 2011
China Petrochemical Corp. Completes Purchase of Daylight Energy
By Benjamin Haas
Dec. 24 (Bloomberg) -- China Petrochemical Corp., the nation’s biggest oil refiner, completed the purchase of Canada’s Daylight Energy Ltd. for about C$2.2 billion ($2.16 billion), the company said in an e-mailed statement yesterday.
Sinopec, as the Chinese company is known, said it paid C$10.08 a share in cash for Calgary-based Daylight.
Cong Peixin, a spokesman for the China Petrochemical unit that carried out the transaction, declined to elaborate on the statement. Daylight confirmed the completed sale in a statement released yesterday.
The purchase gives the Beijing-based company access to more than 300,000 acres of land in areas rich with oil and natural gas, after falling crude prices made valuations attractive.
Sinopec Group, China National Petroleum Corp. and Cnooc Ltd. are seeking to gain technology through partnerships in order to develop China’s shale-gas reserves, estimated to be larger than those in the U.S.
China, the world’s biggest energy consumer, has partnered with Exxon Mobil Corp., Royal Dutch Shell Plc and Chevron Corp. to explore possible shale wells.
Chinese companies have announced $18.3 billion worth of bids this year for overseas oil and gas exploration and production companies, according to data compiled by Bloomberg. Cnooc bought Canada’s Opti Canada Inc. in November for $34 million in cash, agreeing to take on $2.4 billion in debt.
Daylight’s proven and probable reserves rose 46 percent to the equivalent of 174 million barrels of oil at the end of 2010, the company said March 1. The company’s production was 35 million barrels in the third quarter, according to data compiled by Bloomberg.
http://www.businessweek.com/news/2011-12-27/china-petrochemical-corp-completes-purchase-of-daylight-energy.html
Thursday, 22 December 2011
Asian demand for resources good news for British Columbia
By Darah Hansen, Vancouver Sun; With Files From Postmedia News December 22, 2011
British Columbia stands to be a big winner next year as Canada succeeds in diversifying its export markets for its wood products, according to the Conference Board of Canada.
B.C. wood has gained a significant share of China's wood imports over the past five years, increasing from less than one per cent in 2006 to 14 per cent in the first nine months of 2011, the board said in its report on the wood products industry.
At nearly $1 billion so far this year, the value of wood exports to China was more than twice last year's level for the same period, and is expected to continue to rise over the next five years.
"The China story is definitely a huge deal for B.C. wood producers," said Graham Sheppard, an industry analyst with ERA Forest Products Research.
Approximately 30 per cent of B.C. softwood lumber exports has gone to China in 2011, accounting for more than 95 per cent of Canada's total exports to the country.
Diversification into China, and, to a lesser degree, Japan, comes as Canada seeks to reduce its dependence on its next-door neighbour.
In 2006, 86 per cent of Canadian wood exports were sent to the United States, with B.C. wood accounting for about half the total. So far this year, the national share was 63 per cent. Michael Burt, director, Industrial Economic Trends, cited the fragility of the U.S. economy and endless rounds of litigation over softwood lumber as key reasons for the diversification push.
As a result, profits before taxes will rise to $565 million in 2012 from $283 million in 2011. Extending the forecast out to 2016, profits should almost double again from 2012 forecast levels to $1.04 billion.
http://www.vancouversun.com/business/Asian+demand+resources+good+news+British+Columbia/5897463/story.html
British Columbia stands to be a big winner next year as Canada succeeds in diversifying its export markets for its wood products, according to the Conference Board of Canada.
B.C. wood has gained a significant share of China's wood imports over the past five years, increasing from less than one per cent in 2006 to 14 per cent in the first nine months of 2011, the board said in its report on the wood products industry.
At nearly $1 billion so far this year, the value of wood exports to China was more than twice last year's level for the same period, and is expected to continue to rise over the next five years.
"The China story is definitely a huge deal for B.C. wood producers," said Graham Sheppard, an industry analyst with ERA Forest Products Research.
Approximately 30 per cent of B.C. softwood lumber exports has gone to China in 2011, accounting for more than 95 per cent of Canada's total exports to the country.
Diversification into China, and, to a lesser degree, Japan, comes as Canada seeks to reduce its dependence on its next-door neighbour.
In 2006, 86 per cent of Canadian wood exports were sent to the United States, with B.C. wood accounting for about half the total. So far this year, the national share was 63 per cent. Michael Burt, director, Industrial Economic Trends, cited the fragility of the U.S. economy and endless rounds of litigation over softwood lumber as key reasons for the diversification push.
As a result, profits before taxes will rise to $565 million in 2012 from $283 million in 2011. Extending the forecast out to 2016, profits should almost double again from 2012 forecast levels to $1.04 billion.
http://www.vancouversun.com/business/Asian+demand+resources+good+news+British+Columbia/5897463/story.html
Wednesday, 21 December 2011
[Exclusive] Canada resumes WTO threat over beef
By Kim Tae-gyu
Canada is threatening to resume its complaint with the World Trade Organization (WTO) should Korea fail to begin importing Canadian beef next year as previously agreed.
A source familiar with the issue said Wednesday that Canada is ready to return to a WTO dispute settlement panel because Korea’s National Assembly may not approve imports of Canadian beef due to a partisan standoff.
Korea promised to lift its eight-year ban on Canadian beef imports in June, which started due to mad-cow disease outbreaks there in 2003. In return, Canada dropped its complaint with the WTO.
``Korea pledged to import Canadian beef products from cattle aged less than 30 months, which are regarded as safe, from next year. But the country might not comply with the promise due to parliamentary wrangling,’’ the source said.
``In this climate, Canada has reiterated its willingness via various diplomatic channels to resume WTO procedures unless the Assembly keeps the Dec. 31 deadline.’’
The source expressed concern that Asia’s fourth-largest economy might suffer a host of problems.
``We might have to import beef from cattle older than 30 months or materials we agreed not to import regardless of age. And we have to remember that the European Union is keeping an eye on the Canadian case as a benchmark,’’ he said. Under the Korea-Canada contract, brains, eyes, spinal cord and other specified risk materials (SRM) are not supposed to be traded between the two nations irrespective of the age of cattle because they are believed to be more susceptible to carrying the disease.
``The hitch is that lawmakers worry too much about public sentiment since the mad cow row in 2008 involving U.S. beef imports. In addition, the ongoing partisan bickering is aggravating the issue.’’
The Lee Myung-bak administration agreed with the United States back in 2008 to restart imports of U.S. beef, which generated a nationwide uproar including months of candlelit protests because of worries about mad cow disease.
This prompted many lawmakers not to proactively deal with the Canadian beef issue.
On a far more negative note, the governing Grand National Party unilaterally passed the controversial free trade agreement with the U.S. last month, prompting opposition parties to boycott any other parliamentary discussions.
When contacted, the Ministry for Food, Agriculture, Forestry and Fisheries (MIFAFF) admitted that it is concerned about the possibility that the Assembly may fail to keep the deadline.
Yet, the ministry refused to confirm whether the Canadian government officially threatened to return to WTO action.
http://www.koreatimes.co.kr/www/news/biz/2011/12/123_101326.html
Canada is threatening to resume its complaint with the World Trade Organization (WTO) should Korea fail to begin importing Canadian beef next year as previously agreed.
A source familiar with the issue said Wednesday that Canada is ready to return to a WTO dispute settlement panel because Korea’s National Assembly may not approve imports of Canadian beef due to a partisan standoff.
Korea promised to lift its eight-year ban on Canadian beef imports in June, which started due to mad-cow disease outbreaks there in 2003. In return, Canada dropped its complaint with the WTO.
``Korea pledged to import Canadian beef products from cattle aged less than 30 months, which are regarded as safe, from next year. But the country might not comply with the promise due to parliamentary wrangling,’’ the source said.
``In this climate, Canada has reiterated its willingness via various diplomatic channels to resume WTO procedures unless the Assembly keeps the Dec. 31 deadline.’’
The source expressed concern that Asia’s fourth-largest economy might suffer a host of problems.
``We might have to import beef from cattle older than 30 months or materials we agreed not to import regardless of age. And we have to remember that the European Union is keeping an eye on the Canadian case as a benchmark,’’ he said. Under the Korea-Canada contract, brains, eyes, spinal cord and other specified risk materials (SRM) are not supposed to be traded between the two nations irrespective of the age of cattle because they are believed to be more susceptible to carrying the disease.
``The hitch is that lawmakers worry too much about public sentiment since the mad cow row in 2008 involving U.S. beef imports. In addition, the ongoing partisan bickering is aggravating the issue.’’
The Lee Myung-bak administration agreed with the United States back in 2008 to restart imports of U.S. beef, which generated a nationwide uproar including months of candlelit protests because of worries about mad cow disease.
This prompted many lawmakers not to proactively deal with the Canadian beef issue.
On a far more negative note, the governing Grand National Party unilaterally passed the controversial free trade agreement with the U.S. last month, prompting opposition parties to boycott any other parliamentary discussions.
When contacted, the Ministry for Food, Agriculture, Forestry and Fisheries (MIFAFF) admitted that it is concerned about the possibility that the Assembly may fail to keep the deadline.
Yet, the ministry refused to confirm whether the Canadian government officially threatened to return to WTO action.
http://www.koreatimes.co.kr/www/news/biz/2011/12/123_101326.html
Tuesday, 20 December 2011
The Changing Relationship of Canadian Business and Foreign Investors
Corporate Counsel | December 20, 2011
When the Australian mining and natural resources giant BHP Billiton Limited bid $40 billion to buy Canada's Potash Corporation of Saskatchewan Inc. in 2010, the Canadian government was quick to slam the door in its face, proclaiming that the merger would not be of "net benefit to Canada."
The decision floored legal experts. In trashing Billiton's hostile takeover on "net benefit" grounds, the government relied on the language of the 1985 Investment Canada Act (ICA). The act had been used only once before to block a deal, in 2008—and that one had potential national security implications.
Coupled with the earlier veto, the Billiton rejection seemed to transform a law once regarded as little more than a formality into a potential booby trap. It also stirred controversy about whether Canada was creeping into a protectionist cocoon—which the government vigorously denies.
Then something remarkable happened. Lazarus-like, Billiton came back two months later, announcing that a plan to develop the world's largest potash mine in the very same area had reached an advanced stage in the company's approval process. The difference was that no acquisition of a company was involved. Billiton was using land it had already acquired. And this time the same provincial leader who led the charge against the buyout scheme was trumpeting the benefits of the project.
The ripple effects of these contradictory official responses to the two projects are still being mulled by legal experts. They highlight an unexpected wrinkle for foreigners who want to invest in Canada. From now on, apparently, they will have to pay as much attention to politics and community relations as to the law, if they want to keep their deals on track. Especially when the federal and state governments they must deal with are in the throes of election campaigns.
"Ultimately, it is a political decision, and it doesn't hurt to have good political relationships," observes Peter Glossop, a partner in Osler, Hoskin & Harcourt's Toronto office, who, like the other lawyers quoted in this article, is knowledgeable about Canadian M&A but wasn't involved in the Billiton matter. (Billiton wouldn't comment.)
George Addy, a partner with Davies Ward Phillips & Vineberg in Toronto, believes in doing your homework. "You have to plan, and plan early," he says. "And you have to have feet on the ground—people in Canada who know the complexities of the various stakeholder interests."
As companies from all over the world—including China—rush to discover and exploit Canada's vast mineral, oil, and natural gas reserves, the question of "net benefit"—and whether it will kill a deal—is keeping many lawyers busy.
U.S. investors are in the front line of those who could be affected. In 2010 U.S. direct investment in Canada totaled more than $306 billion, or 55 percent of Canada's foreign direct investment, according to Canadian government figures. (U.S. statistics show that Canadians directly invested $206 billion in the United States in the same year.)
At the heart of the uncertainty is the fact that "net benefit" ultimately comes down to what many lawyers say is a subjective—and often political—decision by a single individual, the minister of industry, or, in some cases, the minister of Canadian heritage.
This is true even though the law lists the factors the ministers must take into account in reaching a decision on an acquisition. These include considerations ranging from the deal's impact on Canada's economic activity and competitiveness on world markets to the number of Canadians in senior management. By law, the review must be completed within 45 days, though the minister may take an additional 30 days.
http://www.law.com/jsp/cc/PubArticleCC.jsp?id=1324214245310
Saturday, 17 December 2011
Foreign investors cut back on Canadian securities
Financial Post
Foreign investors eased up on purchases of Canadian securities in October, adding just $2.03 billion to their holdings after buying $7.35 billion the previous month, Statistics Canada said.
Economists had expected foreign purchases of between $7.25 billion and $8 billion in October. The October acquisitions - which showed weaker demand for treasury bills and equities - were also much lower than an average of $9.2 billion over the previous three months.
Non-residents added $1.22 billion worth of Canadian bonds to their portfolios in October, led by the first investment in federal bonds in five months.
"This investment was partially offset by retirements of Canadian private corporate bonds and provincial bonds, mostly foreigncurrency denominated instruments," the agency said.
http://www.timescolonist.com/business/Foreign+investors+back+Canadian+securities/5876723/story.html
Foreign investors eased up on purchases of Canadian securities in October, adding just $2.03 billion to their holdings after buying $7.35 billion the previous month, Statistics Canada said.
Economists had expected foreign purchases of between $7.25 billion and $8 billion in October. The October acquisitions - which showed weaker demand for treasury bills and equities - were also much lower than an average of $9.2 billion over the previous three months.
Non-residents added $1.22 billion worth of Canadian bonds to their portfolios in October, led by the first investment in federal bonds in five months.
"This investment was partially offset by retirements of Canadian private corporate bonds and provincial bonds, mostly foreigncurrency denominated instruments," the agency said.
http://www.timescolonist.com/business/Foreign+investors+back+Canadian+securities/5876723/story.html
Friday, 16 December 2011
GM to invest $68M at Oshawa plant for new Impala
CBC News
General Motors confirmed on Friday that it will build some of the next generation of its Chevy Impala line of cars at its assembly plant in Oshawa, Ont.
The plant will get $68 million in investment and will secure 350 jobs, Canadian Finance Minister Jim Flaherty said at the announcement, though overall GM is slashing positions in Oshawa as it shuts down an assembly line.
"These are important developments for the future of this community. They are important developments for this country," Flaherty said. "This important announcement marks an important step in GM's recovery and its continued contribution to Canada economic growth and jobs."
The news from GM caps off half a year of machinations with its union, the Canadian Auto Workers.
The union says its collective agreement with GM obliges the auto maker to produce Impalas in Oshawa, where it has assembled different versions of the model since 1959.
But the auto maker announced in May that it was adding 2,500 jobs and investing $69 million US to upgrade its Detroit-Hamtramck plant to build the latest Impala, without any mention of the Ontario factory. That prompted a flood of media reports that production of the sedan was moving out of Oshawa.
The CAW said the tactic was meant to instill fear in workers ahead of next year's negotiations toward a new collective agreement.
Instead, GM will "double-tool" the car at both plants.
Massive job losses
Overall, GM's Oshawa operation is still set to lose more than 2,000 jobs as the company eliminates its so-called consolidated production line by 2013. That's on top of the 2,600 jobs lost in 2009 when GM shuttered its truck plant in Oshawa, and the closure last year of its lone remaining production plant in Windsor, Ont., where the company once employed 7,000.
GM had a Canadian workforce of 20,000 people as recently as 2005, but that number is dwindling to fewer than 5,000 as it tries to streamline operations in the wake of its bankruptcy filing two years ago.
The company received $61.5 billion in bailout money from the U.S., Canadian and Ontario governments in 2009 as it went through bankruptcy protection, with politicians saying it was important to protect manufacturing jobs.
"I'm pleased that the when GM's future was on the line and the jobs here were on the line, that the people of Canada stepped up to the plate," Flaherty said Friday.
Most of that amount was converted to equity before General Motors relisted on the New York and Toronto stock exchanges last year. But at the shares' current price, Ottawa and Queen's Park are out $4.2 billion on their investment and would need the stock to rise to about 2½ times its current value to break even.
http://www.cbc.ca/news/canada/story/2011/12/16/biz-gm-oshawa.html
General Motors confirmed on Friday that it will build some of the next generation of its Chevy Impala line of cars at its assembly plant in Oshawa, Ont.
The plant will get $68 million in investment and will secure 350 jobs, Canadian Finance Minister Jim Flaherty said at the announcement, though overall GM is slashing positions in Oshawa as it shuts down an assembly line.
"These are important developments for the future of this community. They are important developments for this country," Flaherty said. "This important announcement marks an important step in GM's recovery and its continued contribution to Canada economic growth and jobs."
The news from GM caps off half a year of machinations with its union, the Canadian Auto Workers.
The union says its collective agreement with GM obliges the auto maker to produce Impalas in Oshawa, where it has assembled different versions of the model since 1959.
But the auto maker announced in May that it was adding 2,500 jobs and investing $69 million US to upgrade its Detroit-Hamtramck plant to build the latest Impala, without any mention of the Ontario factory. That prompted a flood of media reports that production of the sedan was moving out of Oshawa.
The CAW said the tactic was meant to instill fear in workers ahead of next year's negotiations toward a new collective agreement.
Instead, GM will "double-tool" the car at both plants.
Massive job losses
Overall, GM's Oshawa operation is still set to lose more than 2,000 jobs as the company eliminates its so-called consolidated production line by 2013. That's on top of the 2,600 jobs lost in 2009 when GM shuttered its truck plant in Oshawa, and the closure last year of its lone remaining production plant in Windsor, Ont., where the company once employed 7,000.
GM had a Canadian workforce of 20,000 people as recently as 2005, but that number is dwindling to fewer than 5,000 as it tries to streamline operations in the wake of its bankruptcy filing two years ago.
The company received $61.5 billion in bailout money from the U.S., Canadian and Ontario governments in 2009 as it went through bankruptcy protection, with politicians saying it was important to protect manufacturing jobs.
"I'm pleased that the when GM's future was on the line and the jobs here were on the line, that the people of Canada stepped up to the plate," Flaherty said Friday.
Most of that amount was converted to equity before General Motors relisted on the New York and Toronto stock exchanges last year. But at the shares' current price, Ottawa and Queen's Park are out $4.2 billion on their investment and would need the stock to rise to about 2½ times its current value to break even.
http://www.cbc.ca/news/canada/story/2011/12/16/biz-gm-oshawa.html
Russia's WTO membership important to Canada: minister
Source: XINHUA | 2011-12-16 | 
ONLINE EDITION
OTTAWA, Dec. 16 (Xinhua) -- Closer ties with Russia will bring more jobs and economic benefits to Canada, said Canadian International Trade Minister Ed Fast on Friday.
Fast made the remarks when he congratulated Russia on its successful accession of the World Trade Organization (WTO) after Moscow's membership was granted in Geneva on the same day.
"As a fast-growing economy, Russia offers great potentials. Its membership in the WTO will mean lower tariffs and improved access to Russia's goods market," said Fast in a statement.
He noted that Canadian companies are excited about their opportunities in Russia, especially as Moscow continues carrying out measures to better its trade and investment environment.
Taking the 2014 Sochi Winter Games as an example of the two countries' bilateral ties, the minister said architects and engineers from both nations are working side by side on the Olympic-related projects.
Currently, bilateral trade reached 2.8 billion Canadian dollars, or 2.7 billion U.S. dollars, in 2010, 12.3 percent up from a year earlier.
Russia is a major market for Canadian machinery, seafood products and aerospace products, and an exporter of fertilizers and chemical and steel products to Canada.
http://www.shanghaidaily.com/article/article_xinhua.asp?id=39628
ONLINE EDITION OTTAWA, Dec. 16 (Xinhua) -- Closer ties with Russia will bring more jobs and economic benefits to Canada, said Canadian International Trade Minister Ed Fast on Friday.
Fast made the remarks when he congratulated Russia on its successful accession of the World Trade Organization (WTO) after Moscow's membership was granted in Geneva on the same day.
"As a fast-growing economy, Russia offers great potentials. Its membership in the WTO will mean lower tariffs and improved access to Russia's goods market," said Fast in a statement.
He noted that Canadian companies are excited about their opportunities in Russia, especially as Moscow continues carrying out measures to better its trade and investment environment.
Taking the 2014 Sochi Winter Games as an example of the two countries' bilateral ties, the minister said architects and engineers from both nations are working side by side on the Olympic-related projects.
Currently, bilateral trade reached 2.8 billion Canadian dollars, or 2.7 billion U.S. dollars, in 2010, 12.3 percent up from a year earlier.
Russia is a major market for Canadian machinery, seafood products and aerospace products, and an exporter of fertilizers and chemical and steel products to Canada.
http://www.shanghaidaily.com/article/article_xinhua.asp?id=39628
Wednesday, 14 December 2011
Uranium mine ownership rules may ease
CBC News
Posted: Dec 14, 2011 10:02 PM CST
Last Updated: Dec 14, 2011 9:59 PM CST
A Saskatchewan MP, Brad Trost, has introduced federal legislation that would allow for more foreign investment in Canadian uranium mines.
Trost's bill would allow foreign investors to purchase and own the entirety of Canadian uranium mines and properties. Current rules limit foreign interest to a maximum of 49 per cent.
"This is a policy that has been supported by not just the current government of Saskatchewan but previous NDP and Conservative governments in Saskatchewan," Trost said Wednesday. "It would increase jobs and investment in our province and throughout the country."
Saskatchewan's north is home to most uranium mining activity in the country.
Trost said a change in ownership rules would not lead to any security risks because uranium is a highly regulated commodity requiring licenses to mine and export.
Saskatchewan recently said it would welcome eased ownership rules.
Last week the province's energy and resources minister, Bill Boyd, noted the federal rules date to the 1950s.
"We think it has had an impact on investment," Boyd said. "If there were a change, we think we would see further investment in Saskatchewan, we believe that that would be a good thing."
http://www.cbc.ca/news/canada/saskatchewan/story/2011/12/14/sk-uranium-mine-ownership.html
Posted: Dec 14, 2011 10:02 PM CST
Last Updated: Dec 14, 2011 9:59 PM CST
A Saskatchewan MP, Brad Trost, has introduced federal legislation that would allow for more foreign investment in Canadian uranium mines.
Trost's bill would allow foreign investors to purchase and own the entirety of Canadian uranium mines and properties. Current rules limit foreign interest to a maximum of 49 per cent.
"This is a policy that has been supported by not just the current government of Saskatchewan but previous NDP and Conservative governments in Saskatchewan," Trost said Wednesday. "It would increase jobs and investment in our province and throughout the country."
Saskatchewan's north is home to most uranium mining activity in the country.
Trost said a change in ownership rules would not lead to any security risks because uranium is a highly regulated commodity requiring licenses to mine and export.
Saskatchewan recently said it would welcome eased ownership rules.
Last week the province's energy and resources minister, Bill Boyd, noted the federal rules date to the 1950s.
"We think it has had an impact on investment," Boyd said. "If there were a change, we think we would see further investment in Saskatchewan, we believe that that would be a good thing."
http://www.cbc.ca/news/canada/saskatchewan/story/2011/12/14/sk-uranium-mine-ownership.html
Monday, 12 December 2011
Ottawa makes deal with United States Steel
Jeff Gray — LAW REPORTER
Published Monday, Dec. 12, 2011 3:18PM EST
Last updated Monday, Dec. 12, 2011 7:22PM EST
The federal government has dropped its legal case against United States Steel Corp. for breaking promises to maintain jobs after its 2007 takeover of Hamilton’s Stelco. In exchange, the company pledged to keep producing steel in Canada until 2015 and invest an additional $50-million.
The deal snuffs out a high-stakes court fight between the federal government and the Pittsburgh-based company. But lawyers who advise foreign investors say it sends a signal that Ottawa is serious about enforcing promises made to secure government approval of foreign takeovers.
Under the deal, he said, U.S. Steel pledged to keep producing steel in Canada, operate its Lake Erie and Hamilton plants until 2015 and invest at least $50-million in its Canadian facilities by December, 2015, in addition to its original pledge of $200-million by October of next year. The company also pledged to give $3-million to “community and educational programs” in Hamilton and Nanticoke, Ont.
“U.S. Steel’s new commitments, many of which run to 2015, will provide benefits that in all likelihood would not have been obtained through the court process,” Mr. Paradis said.
The deal comes after U.S. Steel lost its legal argument in May that the potential $10,000-a-day fines it was facing under the Investment Canada Act were unconstitutional. On Nov. 24, the Supreme Court of Canada announced that it would not hear the company’s appeal of that decision.
U.S. Steel spokeswoman Erin DiPetro said the company was pleased to resolve the “unfortunate dispute” and said the deal “reflects our ongoing and long-term interest in doing business” in Canada. “We intend to be valued corporate citizens in Canada,” Ms. DiPetro said in an e-mailed statement.
In July, 2009, Tony Clement, then industry minister, said Ottawa would take U.S. Steel to court for violating its pledges. But the company argued that it should not have to live up to promises it made before the financial meltdown.
Union leaders had harsh words for the deal announced on Monday. “It’s outrageous that they can be left off the hook like that after causing all the damage they have to the Hamilton economy,” said Rolf Gerstenberger, president of Local 1005 of the United Steelworkers, which represents about 750 workers left in Hamilton and 9,000 retirees.
With a report from Greg Keenan.
http://www.theglobeandmail.com/report-on-business/ottawa-makes-deal-with-united-states-steel/article2268301/
Published Monday, Dec. 12, 2011 3:18PM EST
Last updated Monday, Dec. 12, 2011 7:22PM EST
The federal government has dropped its legal case against United States Steel Corp. for breaking promises to maintain jobs after its 2007 takeover of Hamilton’s Stelco. In exchange, the company pledged to keep producing steel in Canada until 2015 and invest an additional $50-million.
The deal snuffs out a high-stakes court fight between the federal government and the Pittsburgh-based company. But lawyers who advise foreign investors say it sends a signal that Ottawa is serious about enforcing promises made to secure government approval of foreign takeovers.
However, the union representing workers at the two former Stelco mills called the deal a betrayal by the Conservative government.
Industry Minister Christian Paradis announced the agreement in the House of Commons on Monday, saying it was made after the company had approached him and after “extensive negotiations.”
Under the deal, he said, U.S. Steel pledged to keep producing steel in Canada, operate its Lake Erie and Hamilton plants until 2015 and invest at least $50-million in its Canadian facilities by December, 2015, in addition to its original pledge of $200-million by October of next year. The company also pledged to give $3-million to “community and educational programs” in Hamilton and Nanticoke, Ont.
“U.S. Steel’s new commitments, many of which run to 2015, will provide benefits that in all likelihood would not have been obtained through the court process,” Mr. Paradis said.
The deal comes after U.S. Steel lost its legal argument in May that the potential $10,000-a-day fines it was facing under the Investment Canada Act were unconstitutional. On Nov. 24, the Supreme Court of Canada announced that it would not hear the company’s appeal of that decision.
U.S. Steel spokeswoman Erin DiPetro said the company was pleased to resolve the “unfortunate dispute” and said the deal “reflects our ongoing and long-term interest in doing business” in Canada. “We intend to be valued corporate citizens in Canada,” Ms. DiPetro said in an e-mailed statement.
U.S. Steel took over struggling Stelco in 2007, making promises to Ottawa to maintain jobs and steel production at certain levels. But in the face of a worldwide economic crisis two years later, it announced that it was closing both plants, laying off more than 1,500 workers. (The plants later reopened, although they were plagued by labour disputes that ended with lockouts and deep pension concessions.)
In July, 2009, Tony Clement, then industry minister, said Ottawa would take U.S. Steel to court for violating its pledges. But the company argued that it should not have to live up to promises it made before the financial meltdown.
Union leaders had harsh words for the deal announced on Monday. “It’s outrageous that they can be left off the hook like that after causing all the damage they have to the Hamilton economy,” said Rolf Gerstenberger, president of Local 1005 of the United Steelworkers, which represents about 750 workers left in Hamilton and 9,000 retirees.
Lawyers on Bay Street who specialize in the Investment Canada Act disagreed, arguing that the deal actually underlines Ottawa’s resolve to force foreign investors to live up to their commitments.
“This appears to be more than a slap on the wrist,” said Chris Hersh of Cassels Brock & Blackwell LLP in Toronto.
Mark Katz of Davies Ward Phillips & Vineberg LLP said the deal was by no means a surrender from Ottawa: “This is definitely not a backing down by the government. … The message they are sending is that [foreign investors] had better take this seriously.”
With a report from Greg Keenan.
http://www.theglobeandmail.com/report-on-business/ottawa-makes-deal-with-united-states-steel/article2268301/
Obama Agrees to Perimeter Security With Canada to Bolster Trade
By Theophilos Argitis and Andrew Mayeda
Dec. 12 (Bloomberg) -- President Barack Obama and Canadian Prime Minister Stephen Harper agreed to take steps to speed the flow of goods and people across the border while enhancing security and harmonizing regulation, in a bid to counter weakening trade ties between the two countries.
The pact, announced by Obama and Harper following a meeting in Washington, moves the two countries toward a “perimeter” security system that lays out plans to inspect more cargo and travelers before they arrive in North America. Canada and the U.S. will also seek to streamline and align regulations on some goods.
“Moving security to the perimeter of our continent will transform our border and create jobs and growth in Canada by improving the flow of goods and people between our two countries,” Harper said in a statement. “These agreements represent the most significant step forward in Canada-U.S. cooperation since the North American Free Trade Agreement.”
The Canada-U.S. trade relationship has struggled under the impact of tighter border security following the Sept. 11 terrorist attacks, as well as the emergence of China as a competitor and slowing global growth. The share of Canada’s shipments to the U.S. has been declining since 2000, a trend that accelerated as the global recession curbed demand for Canadian exports.
The two countries agreed on 29 initiatives to harmonize regulation as a “first step” toward new regulatory cooperation, focused on agriculture and food, transportation, health products and the environment.
Autos and Rails
Auto producers and rail companies will benefit from efforts to harmonize vehicle safety standards, the Canadian government said in a background document released in Ottawa. Other steps will include developing a common naming system for meat cuts, aligning regulations for pesticides and harmonizing rules in the pharmaceuticals industry.
“This announcement is not about a common border, it is about an integrated economy and our shared vision for good jobs, increased investment and a higher standard of living,” Jayson Myers, chief executive of the Canadian Manufacturers and Exporters, said in a statement.
Border regulations cost Canadian businesses about C$16 billion ($15.8 billion) annually, the Canadian government said.
The accord comes after Obama announced last month he would delay until 2013 a decision on the $7 billion, 1,661-mile (2,673-kilometer) Keystone XL pipeline, proposed by TransCanada Corp. Approval of the pipeline, which would carry Canadian oil- sands crude through the Great Plains to the Gulf of Mexico, is a “no-brainer,” Harper said in a Sept. 21 interview with Bloomberg.
Canada Irked
The Keystone delay is the latest of several U.S. moves that have irked Canada. Canada objected to “Buy American” provisions in the Obama administration’s $447 billion jobs bill that was blocked by Republicans in Congress, as well as the restoration of a $5.50 fee on Canadian travelers arriving in the U.S. by plane or ship.
The two countries have agreed to coordinate their systems for screening cargo so goods entering either nation only have to be cleared once. They plan to integrate passenger baggage screening systems, meaning Canada will have to adopt the U.S. system for detecting explosives. In exchange, U.S. authorities will lift the requirement that baggage be re-screened when travelers switch to connecting flights in the U.S.
Expanding NEXUS
They also agreed to expand a program called NEXUS that allows frequent travelers to pass more quickly through customs. Canada will expand NEXUS lanes and booths at several border crossings, including Windsor, Ontario-Detroit. There will be “significant” investments in physical infrastructure at various border points, the documents say.
Canada and the U.S. will develop coordinated entry-and-exit systems, so the record of land entry by individuals into one country can be used to track the exit from another. Canada will adopt the U.S. exit system, under which airlines must share their passenger manifests on outbound international flights.
Canada will also beef up practices to identify potential terrorist threats before they reach North America, in part by increasing screening of travelers to Canada, and sharing information on high risk inbound travelers.
http://www.businessweek.com/news/2011-12-12/obama-agrees-to-perimeter-security-with-canada-to-bolster-trade.html
Friday, 9 December 2011
Dingwall joins board of Canada China Business Council
Published on December 9, 2011
Dingwall, who was a Liberal MP in the former riding of Cape Breton-East Richmond and a cabinet minister, currently practises law with the Toronto firm of Affleck Greene McMurtry and was recently elected to the board of the Canada China Business Council.
Dingwall said he has had a longstanding relationship with China, both when he served as an MP and federal cabinet minister and in private life, has travelled there extensively and represents clients with an interest in the country.
He noted the council involves a cross-section of Canadian businesses as well as a group of Chinese business people
“We share with one another concerns that Canadian businesses would have, for instance in dealing in China, equally so what concerns Chinese businesses would have in terms of dealing in Canada,” Dingwall said. “The relationship that Canada has with China is pretty important.
“I think last year, 2010, there was about $14 billion that the Chinese invested in Canada. I think this year by October it was close to $20 billion, so it’s a significant amount of money that the Chinese are investing in Canada and as Canadian businesses and Chinese businesses, we want to make sure that the barriers that exist can be eliminated and the processes can be fast-tracked.”
Canada’s relationship with the United States remains its most important, Dingwall said, but Canada is among a host of other countries looking to improve relations with China, a country that is seeing tremendous growth.
“If Canada is to take advantage of our special relationship with China, businesses, governments — municipal, provincial and federal — all have to work together to try to improve upon our relationship with China in order to have them make more investment,” he said. “There’s a lot of self-interest here. The Chinese need our minerals and Canadians need markets for their products and for their services.”
Dingwall noted Canada and China are currently working on a foreign investment and protection agreement which should be finalized fairly soon. Among the challenges facing companies looking to do business in China are access to visas, how regulators work, copyright, technology and the delivery of product and services.
“Atlantic Canada has a great deal of energy which could be sold on the open market and if there are businesses or governments interested in fostering that relationship, which I think there is, I would be only too happy to try to facilitate and to be helpful to those enterprises, either in voicing their concerns in terms of how to deal with the Chinese or vice versa,” Dingwall said.
Dingwall said about 70 per cent of the energy currently used in China is generated with coal, and that country could learn much from Cape Breton’s mining expertise. Cape Breton University recently officially opened its new Verschuren Centre for Sustainability in Energy and the Environment, which includes research chairs in areas including mine water management.
“(China has) an understanding of the coal industry and I think that they would appreciate a perspective and an expertise which I think the centre is attempting to develop and perhaps they could export and share that knowledge with other countries and other entities around the world,” he said.
http://www.capebretonpost.com/Business/2011-12-09/article-2831070/Dingwall-joins-board-of-Canada-China-Business-Council/1
Dingwall, who was a Liberal MP in the former riding of Cape Breton-East Richmond and a cabinet minister, currently practises law with the Toronto firm of Affleck Greene McMurtry and was recently elected to the board of the Canada China Business Council.
Dingwall said he has had a longstanding relationship with China, both when he served as an MP and federal cabinet minister and in private life, has travelled there extensively and represents clients with an interest in the country.
He noted the council involves a cross-section of Canadian businesses as well as a group of Chinese business people
“We share with one another concerns that Canadian businesses would have, for instance in dealing in China, equally so what concerns Chinese businesses would have in terms of dealing in Canada,” Dingwall said. “The relationship that Canada has with China is pretty important.
“I think last year, 2010, there was about $14 billion that the Chinese invested in Canada. I think this year by October it was close to $20 billion, so it’s a significant amount of money that the Chinese are investing in Canada and as Canadian businesses and Chinese businesses, we want to make sure that the barriers that exist can be eliminated and the processes can be fast-tracked.”
Canada’s relationship with the United States remains its most important, Dingwall said, but Canada is among a host of other countries looking to improve relations with China, a country that is seeing tremendous growth.
“If Canada is to take advantage of our special relationship with China, businesses, governments — municipal, provincial and federal — all have to work together to try to improve upon our relationship with China in order to have them make more investment,” he said. “There’s a lot of self-interest here. The Chinese need our minerals and Canadians need markets for their products and for their services.”
Dingwall noted Canada and China are currently working on a foreign investment and protection agreement which should be finalized fairly soon. Among the challenges facing companies looking to do business in China are access to visas, how regulators work, copyright, technology and the delivery of product and services.
“Atlantic Canada has a great deal of energy which could be sold on the open market and if there are businesses or governments interested in fostering that relationship, which I think there is, I would be only too happy to try to facilitate and to be helpful to those enterprises, either in voicing their concerns in terms of how to deal with the Chinese or vice versa,” Dingwall said.
Dingwall said about 70 per cent of the energy currently used in China is generated with coal, and that country could learn much from Cape Breton’s mining expertise. Cape Breton University recently officially opened its new Verschuren Centre for Sustainability in Energy and the Environment, which includes research chairs in areas including mine water management.
“(China has) an understanding of the coal industry and I think that they would appreciate a perspective and an expertise which I think the centre is attempting to develop and perhaps they could export and share that knowledge with other countries and other entities around the world,” he said.
http://www.capebretonpost.com/Business/2011-12-09/article-2831070/Dingwall-joins-board-of-Canada-China-Business-Council/1
Wednesday, 7 December 2011
Obama and Harper split on Keystone XL pipeline deal
7 December 2011 Last updated at 22:20 ET
A controversial oil pipeline linking Canada and the US must be assessed for environmental impact, the US president has told Canada's prime minister.
Meeting Canadian PM Stephen Harper at the White House to sign a border deal, Barack Obama rejected US Republican calls to approve Keystone XL.
Mr Obama had an "open mind" on the project, Mr Harper told reporters, but wanted a full assessment carried out.
The 1,600-mile (2,700km) pipeline would run from Canada to the Texas coast.
"He's indicated to me, as he's indicated to you today, that he is following a proper [process] to eventually take that decision here in the United States, and that he has an open mind in regards to what the final decision may or may not be," Mr Harper said.
'New, modern border'
Canada's prime minister has long backed the Keystone XL plan, which would create jobs in the US and in Canada and enable oil from the Canadian province of Alberta to reach the world market.
But the Obama administration last month delayed a decision on the pipeline until a new assessment of the environmental impact of its route is completed.
That is not expected to be finished until 2013 - after the US presidential election.
Mr Obama, meanwhile, explicitly rejected calls from Republicans in the US Congress to link approval for Keystone XL to Mr Obama's push to renew a soon-to-expire payroll tax cut.
"Efforts to tie a whole bunch of other issues to what's something that they [Congress] should be doing anyway will be rejected by me," Mr Obama said.
In the main business of the day at the White House, the two leaders unveiled a trade deal and perimeter security agreement that Mr Harper said would create a "new modern border".
"Together, they represent the most significant steps forward in Canada-US cooperation since the North American Free Trade Agreement," he said.
The deals would allow easier access to ports and increase harmonisation of security checks and procedures at land borders.
http://www.bbc.co.uk/news/world-us-canada-16081197
A controversial oil pipeline linking Canada and the US must be assessed for environmental impact, the US president has told Canada's prime minister.
Meeting Canadian PM Stephen Harper at the White House to sign a border deal, Barack Obama rejected US Republican calls to approve Keystone XL.
Mr Obama had an "open mind" on the project, Mr Harper told reporters, but wanted a full assessment carried out.
The 1,600-mile (2,700km) pipeline would run from Canada to the Texas coast.
"He's indicated to me, as he's indicated to you today, that he is following a proper [process] to eventually take that decision here in the United States, and that he has an open mind in regards to what the final decision may or may not be," Mr Harper said.
'New, modern border'
Canada's prime minister has long backed the Keystone XL plan, which would create jobs in the US and in Canada and enable oil from the Canadian province of Alberta to reach the world market.
But the Obama administration last month delayed a decision on the pipeline until a new assessment of the environmental impact of its route is completed.
That is not expected to be finished until 2013 - after the US presidential election.
Mr Obama, meanwhile, explicitly rejected calls from Republicans in the US Congress to link approval for Keystone XL to Mr Obama's push to renew a soon-to-expire payroll tax cut.
"Efforts to tie a whole bunch of other issues to what's something that they [Congress] should be doing anyway will be rejected by me," Mr Obama said.
In the main business of the day at the White House, the two leaders unveiled a trade deal and perimeter security agreement that Mr Harper said would create a "new modern border".
"Together, they represent the most significant steps forward in Canada-US cooperation since the North American Free Trade Agreement," he said.
The deals would allow easier access to ports and increase harmonisation of security checks and procedures at land borders.
http://www.bbc.co.uk/news/world-us-canada-16081197
Liberalize foreign ownership in telecom
By Andrea Wood | Published December 7, 2011
The past few weeks have seen renewed speculation that Canada is about to liberalize restrictions on foreign direct investment in the telecom sector. If the rumours are true, it would signal a positive development for Canadians and competition in Canada.
Canada's foreign ownership rules in the sector are among the most restrictive in the world, and have repeatedly and consistently been identified by experts as limiting Canada's competitiveness and depriving Canadian consumers and businesses of lower prices and greater innovation.
After decades of study and expert reports supporting liberalization, the time to act has come. With the rules for upcoming spectrum auctions about to be announced, it is critically important for the government to act now to liberalize and clarify restrictions on foreign investment in the sector.
The current rules were enacted at a time when most telecom markets in developed countries were closed to foreign investment. The rules effectively limit the amount a foreign entity can invest in a Canadian telecom carrier. The rules also provide that a Canadian telecom carrier that meets the other more objective tests limiting foreign ownership and control cannot otherwise be "controlled in fact" by a non-Canadian.
Since Canada's foreign ownership restrictions were introduced in 1993, most countries have opened their markets to foreign investment. According to the OECD, of 30 member countries, only three have foreign ownership restrictions that apply to all telecom operators: Canada, Mexico and Korea. And "of the three countries, Canada has the most severe restrictions."
Over the years, experts have studied the rules and arrived at the same conclusion: Canada needs to open up its telecom markets to greater levels of foreign investment. In 2003, the House of Commons Standing Committee on Industry, Science and Technology released a report in which it recommended that restrictions on foreign investment in the sector be removed entirely. In 2006, the Telecom Policy Review Panel recommended a phased approach to liberalizing foreign investment restrictions. And in a 2008 report, the Competition Policy Review Panel also recommended liberalization in phases.
Why? The conclusion reached by these experts was that Canada's telecommunications market was not sufficiently competitive, and the lack of competition was hurting Canadian consumers and businesses because it was contributing to higher prices and lower levels of innovation in the sector. Given the importance of the telecom industry to the economy generally, this was, and continues to be, troubling.
The government responded to these studies by taking steps to introduce greater competition to the sector. In the 2008 spectrum auction, Industry Canada established several rules, including a spectrum set aside for new entrants that enabled Globalive Wireless Management Corporation and other new players to enter the wireless market. The result of that decision has been substantially lower prices and greater choice for Canadian wireless consumers.
Meanwhile, Canada's incumbent carriers are actively preparing to participate in upcoming spectrum auctions, likely to be held in 2012. If the current restrictions are not lifted soon and in sufficient time to enable prospective bidders to approach investors and negotiate financing on reasonable terms, smaller players may be unable to participate meaningfully in the auction. Spectrum is the lifeblood of the wireless business. Without additional spectrum, new entrants such as Globalive will be unable to compete effectively with incumbent carriers and all of the benefits associated with the introduction of competition in the sector through the last spectrum auction could be lost.
Globalive entered the wireless market after having successfully participated in the 2008 spectrum auction with substantial financial backing from an Egyptian telecom company, Orascom Telecom. After the auction and having paid the Canadian government $442 million for spectrum, Globalive established to Industry Canada that it satisfied Canada's rules relating to Canadian ownership and control. It immediately began the arduous and expensive task of building a wireless network.
Unfortunately for Globalive, its competitors were able to persuade the CRTC that Industry Canada was mistaken in concluding that Globalive satisfied Canadian ownership rules. After conducting an unprecedented public review of Globalive's ownership structure, the CRTC concluded that Globalive was "controlled in fact" by its foreign shareholder, a conclusion that rendered it ineligible to operate as a Canadian telecom carrier.
After many months of uncertainty, the Harper government issued a Cabinet order overturning the CRTC decision and allowing Globalive to launch its business and to challenge incumbent telecom carriers to offer better service and lower prices to Canadian consumers, but it has not been enough to save Globalive from continuing regulatory uncertainty. To this day, the legal fight continues.
Public policy shouldn't be dictated by the needs of one company and we are not suggesting otherwise. What we do suggest is that any law that is so vague that it can be interpreted differently by two sets of regulators (with consequences that from Globalive's perspective can only be described as disastrous) needs to be amended.
In this case, not only does the law in our view need to be clarified, its fundamental assumption that foreign investment in telecom is undesirable needs to be revisited. If we were alone in making this suggestion, a reader could be forgiven for concluding that our suggestion is motivated solely by self-interest. But we are not alone and the experts cannot be collectively wrong on this issue. Canada needs to liberalize restrictions on foreign ownership in the telecom sector and needs to do it now.
http://www.embassymag.ca/page/view/telecom-12-07-2011
The past few weeks have seen renewed speculation that Canada is about to liberalize restrictions on foreign direct investment in the telecom sector. If the rumours are true, it would signal a positive development for Canadians and competition in Canada.
Canada's foreign ownership rules in the sector are among the most restrictive in the world, and have repeatedly and consistently been identified by experts as limiting Canada's competitiveness and depriving Canadian consumers and businesses of lower prices and greater innovation.
After decades of study and expert reports supporting liberalization, the time to act has come. With the rules for upcoming spectrum auctions about to be announced, it is critically important for the government to act now to liberalize and clarify restrictions on foreign investment in the sector.
The current rules were enacted at a time when most telecom markets in developed countries were closed to foreign investment. The rules effectively limit the amount a foreign entity can invest in a Canadian telecom carrier. The rules also provide that a Canadian telecom carrier that meets the other more objective tests limiting foreign ownership and control cannot otherwise be "controlled in fact" by a non-Canadian.
Since Canada's foreign ownership restrictions were introduced in 1993, most countries have opened their markets to foreign investment. According to the OECD, of 30 member countries, only three have foreign ownership restrictions that apply to all telecom operators: Canada, Mexico and Korea. And "of the three countries, Canada has the most severe restrictions."
Over the years, experts have studied the rules and arrived at the same conclusion: Canada needs to open up its telecom markets to greater levels of foreign investment. In 2003, the House of Commons Standing Committee on Industry, Science and Technology released a report in which it recommended that restrictions on foreign investment in the sector be removed entirely. In 2006, the Telecom Policy Review Panel recommended a phased approach to liberalizing foreign investment restrictions. And in a 2008 report, the Competition Policy Review Panel also recommended liberalization in phases.
Why? The conclusion reached by these experts was that Canada's telecommunications market was not sufficiently competitive, and the lack of competition was hurting Canadian consumers and businesses because it was contributing to higher prices and lower levels of innovation in the sector. Given the importance of the telecom industry to the economy generally, this was, and continues to be, troubling.
The government responded to these studies by taking steps to introduce greater competition to the sector. In the 2008 spectrum auction, Industry Canada established several rules, including a spectrum set aside for new entrants that enabled Globalive Wireless Management Corporation and other new players to enter the wireless market. The result of that decision has been substantially lower prices and greater choice for Canadian wireless consumers.
Meanwhile, Canada's incumbent carriers are actively preparing to participate in upcoming spectrum auctions, likely to be held in 2012. If the current restrictions are not lifted soon and in sufficient time to enable prospective bidders to approach investors and negotiate financing on reasonable terms, smaller players may be unable to participate meaningfully in the auction. Spectrum is the lifeblood of the wireless business. Without additional spectrum, new entrants such as Globalive will be unable to compete effectively with incumbent carriers and all of the benefits associated with the introduction of competition in the sector through the last spectrum auction could be lost.
Globalive entered the wireless market after having successfully participated in the 2008 spectrum auction with substantial financial backing from an Egyptian telecom company, Orascom Telecom. After the auction and having paid the Canadian government $442 million for spectrum, Globalive established to Industry Canada that it satisfied Canada's rules relating to Canadian ownership and control. It immediately began the arduous and expensive task of building a wireless network.
Unfortunately for Globalive, its competitors were able to persuade the CRTC that Industry Canada was mistaken in concluding that Globalive satisfied Canadian ownership rules. After conducting an unprecedented public review of Globalive's ownership structure, the CRTC concluded that Globalive was "controlled in fact" by its foreign shareholder, a conclusion that rendered it ineligible to operate as a Canadian telecom carrier.
After many months of uncertainty, the Harper government issued a Cabinet order overturning the CRTC decision and allowing Globalive to launch its business and to challenge incumbent telecom carriers to offer better service and lower prices to Canadian consumers, but it has not been enough to save Globalive from continuing regulatory uncertainty. To this day, the legal fight continues.
Public policy shouldn't be dictated by the needs of one company and we are not suggesting otherwise. What we do suggest is that any law that is so vague that it can be interpreted differently by two sets of regulators (with consequences that from Globalive's perspective can only be described as disastrous) needs to be amended.
In this case, not only does the law in our view need to be clarified, its fundamental assumption that foreign investment in telecom is undesirable needs to be revisited. If we were alone in making this suggestion, a reader could be forgiven for concluding that our suggestion is motivated solely by self-interest. But we are not alone and the experts cannot be collectively wrong on this issue. Canada needs to liberalize restrictions on foreign ownership in the telecom sector and needs to do it now.
http://www.embassymag.ca/page/view/telecom-12-07-2011
Monday, 5 December 2011
Executives set sights on emerging markets, but Canadians remain cautious: Ernst & Young
Canada NewsWire
TORONTO, Dec. 5, 2011
Global trend of foreign investment is both opportunity and risk for Canada
Nearly 40% of companies worldwide plan to shift some foreign investment from developed to emerging markets within five years, according to the latest Economist Intelligence Unit paper, Canada in a Globalised Economy: An investment perspective, sponsored by Ernst & Young.
This trend has important implications not only for Canadian firms as investors, but also for Canada as a destination for investment
"Emerging markets account for more than half of all global foreign direct investment now, showing a continued upward trend that's likely to continue," says Colleen McMorrow, Ernst & Young's Entrepreneurial Services Leader in Canada, who points to the appeal of a 6% growth forecast for these markets in 2012 compared to only 1.7% in developed ones. "Canadian firms stand to benefit from this trend as investors, but are reluctant to abandon the stability and favourable business environment that domestic and developed markets offer."
The survey, which polled 195 top Canadian and non-Canadian executives, found that 40% of those already investing in developing markets anticipate a 20% or greater boost in foreign-derived earnings this year. At the same time, it shows that not everyone is leaping to follow the trend; 34% of the companies surveyed have no plans to shift their investment from developing to emerging markets in the next five years.
Although Canadian executives are attracted to larger or growth markets to either outsource production or tap fresh markets, they remain more inclined to invest in developed markets, citing concerns about political and economic instability, skepticism about potential returns and workforce challenges in emerging economies.
McMorrow sees value in a thoughtful approach to the opportunities of developing markets, cautioning that Canadian firms looking to invest abroad shouldn't just follow the latest trend or the fastest-growing market. "It's unlikely that Canadian firms will win if they follow the crowd or adopt a 'me too' approach. Expansion to a developing market needs a highly tailored strategy and careful evaluation of the best fit between a firm's unique offerings and product lines and the current and future potential of each market."
Of Canada's own position as a favoured investment destination for expansion by non-Canadian firms, McMorrow says Canadians should not worry about losing their favoured position to developing markets. "You would think this shift should sound alarm bells for Canadians hoping to attract investment from non-Canadian companies, but in fact Canada stands to fare well through an accelerated shift in global economic gravity from the developed to the developing world."
For most survey participants, a favourable business operating environment remains a critical criterion for evaluating targets, giving developed countries like Canada an advantage over developing countries in attracting investors, especially given its ready access through NAFTA to the US market, its stable business environment, its long legacy of welcoming foreign investors, as well as brisker growth than any other G7 country.
To remain competitive, however, McMorrow says, "Canada must continue to be aggressive in branding itself as an attractive investment destination, in actively courting foreign investment, providing a favourable regulatory environment and fostering an entrepreneurial culture." Only one-third of respondents regard Canada as having superior market-growth prospects, and very few respondents, including Canadians, felt it offers a strong entrepreneurial culture.
In a volatile macroeconomic environment, Canada's best strategy is to continue to promote its entrepreneurial potential in order to attract investment, and support the growth strategies of its firms, domestically and globally.
http://www.digitaljournal.com/pr/511865#ixzz1iuvobVeF
TORONTO, Dec. 5, 2011
Global trend of foreign investment is both opportunity and risk for Canada
Nearly 40% of companies worldwide plan to shift some foreign investment from developed to emerging markets within five years, according to the latest Economist Intelligence Unit paper, Canada in a Globalised Economy: An investment perspective, sponsored by Ernst & Young.
This trend has important implications not only for Canadian firms as investors, but also for Canada as a destination for investment
"Emerging markets account for more than half of all global foreign direct investment now, showing a continued upward trend that's likely to continue," says Colleen McMorrow, Ernst & Young's Entrepreneurial Services Leader in Canada, who points to the appeal of a 6% growth forecast for these markets in 2012 compared to only 1.7% in developed ones. "Canadian firms stand to benefit from this trend as investors, but are reluctant to abandon the stability and favourable business environment that domestic and developed markets offer."
The survey, which polled 195 top Canadian and non-Canadian executives, found that 40% of those already investing in developing markets anticipate a 20% or greater boost in foreign-derived earnings this year. At the same time, it shows that not everyone is leaping to follow the trend; 34% of the companies surveyed have no plans to shift their investment from developing to emerging markets in the next five years.
Although Canadian executives are attracted to larger or growth markets to either outsource production or tap fresh markets, they remain more inclined to invest in developed markets, citing concerns about political and economic instability, skepticism about potential returns and workforce challenges in emerging economies.
McMorrow sees value in a thoughtful approach to the opportunities of developing markets, cautioning that Canadian firms looking to invest abroad shouldn't just follow the latest trend or the fastest-growing market. "It's unlikely that Canadian firms will win if they follow the crowd or adopt a 'me too' approach. Expansion to a developing market needs a highly tailored strategy and careful evaluation of the best fit between a firm's unique offerings and product lines and the current and future potential of each market."
Of Canada's own position as a favoured investment destination for expansion by non-Canadian firms, McMorrow says Canadians should not worry about losing their favoured position to developing markets. "You would think this shift should sound alarm bells for Canadians hoping to attract investment from non-Canadian companies, but in fact Canada stands to fare well through an accelerated shift in global economic gravity from the developed to the developing world."
For most survey participants, a favourable business operating environment remains a critical criterion for evaluating targets, giving developed countries like Canada an advantage over developing countries in attracting investors, especially given its ready access through NAFTA to the US market, its stable business environment, its long legacy of welcoming foreign investors, as well as brisker growth than any other G7 country.
To remain competitive, however, McMorrow says, "Canada must continue to be aggressive in branding itself as an attractive investment destination, in actively courting foreign investment, providing a favourable regulatory environment and fostering an entrepreneurial culture." Only one-third of respondents regard Canada as having superior market-growth prospects, and very few respondents, including Canadians, felt it offers a strong entrepreneurial culture.
In a volatile macroeconomic environment, Canada's best strategy is to continue to promote its entrepreneurial potential in order to attract investment, and support the growth strategies of its firms, domestically and globally.
http://www.digitaljournal.com/pr/511865#ixzz1iuvobVeF
Saturday, 3 December 2011
India, Canada sign MOU to boost diamond sector links
By: Bal Krishna
Toronto, Dec 3 (PTI) Leading Canadian diamond exporting organisation Diamond Bourse of Canada (DBC) and the Indo-Canada Chamber of Commerce (ICCC) signed a Memorandum of Understanding (MoU) on Friday night to increase bilateral trade and investment in the diamond sector.
Under the terms of the MoU, both organisations will work together to enhance and create new trade opportunities in the diamond sector by establishing direct links between Canadian producers and Indian diamond manufacturers and eliminating third parties.
At present Canada''s entire diamond output is shipped to Europe, from where it goes to other countries.
DBC Chairman Bhushan Vora and ICCC President Satish Thakkar signed the MoU in the presence of Canadian Immigration Minister Jason Kenney and Consul General of India Preeti Saran at an annual holiday dinner organised by the Indo-Canada Chamber of Commerce.
Both organisations also jointly encourage Indian diamond manufacturers to establish their facilities in Canada and provide guidance and support.
Speaking on the occasion, Jason Kenney said both countries have accelerated efforts to boost bilateral trade and investment and were working closely on a free trade agreement.
Commending the contribution made by the Indo-Canadian community, Saran invited Indo-Canadians to attend the forthcoming Pravasi Bhartiya Diwas in Jaipur in January next year in large numbers.
She also commended efforts by the ICCC to accelerate bilateral trade and investment between the two countries
http://news.in.msn.com/international/article.aspx?cp-documentid=5646392
Toronto, Dec 3 (PTI) Leading Canadian diamond exporting organisation Diamond Bourse of Canada (DBC) and the Indo-Canada Chamber of Commerce (ICCC) signed a Memorandum of Understanding (MoU) on Friday night to increase bilateral trade and investment in the diamond sector.
Under the terms of the MoU, both organisations will work together to enhance and create new trade opportunities in the diamond sector by establishing direct links between Canadian producers and Indian diamond manufacturers and eliminating third parties.
At present Canada''s entire diamond output is shipped to Europe, from where it goes to other countries.
DBC Chairman Bhushan Vora and ICCC President Satish Thakkar signed the MoU in the presence of Canadian Immigration Minister Jason Kenney and Consul General of India Preeti Saran at an annual holiday dinner organised by the Indo-Canada Chamber of Commerce.
Both organisations also jointly encourage Indian diamond manufacturers to establish their facilities in Canada and provide guidance and support.
Speaking on the occasion, Jason Kenney said both countries have accelerated efforts to boost bilateral trade and investment and were working closely on a free trade agreement.
Commending the contribution made by the Indo-Canadian community, Saran invited Indo-Canadians to attend the forthcoming Pravasi Bhartiya Diwas in Jaipur in January next year in large numbers.
She also commended efforts by the ICCC to accelerate bilateral trade and investment between the two countries
http://news.in.msn.com/international/article.aspx?cp-documentid=5646392
Friday, 2 December 2011
Canada Open to Changing Foreign-Takeover Law, Paradis Says
Dec. 2 (Bloomberg) -- Canada is open to changing its law governing foreign takeovers to provide more “certainty” to companies considering purchases of Canadian firms, Industry Minister Christian Paradis said.
“We are always open to improving the regime,” Paradis said today in an interview in New York, where he met with U.S. company executives and investors. “If there are some things we can do to better address this and provide certainty, we will certainly be happy to look into it.”
‘Solid Regime’
Paradis called the existing system a “solid regime” that has worked well. “Our record shows that we’re open to foreign investment,” said Paradis, 37, who took over as industry minister May 18.
Rather than putting the onus on companies, the federal government should have to prove that takeovers aren’t in the national interest, and disclose reasons for rejecting a transaction, the C.D. Howe study recommended.
The federal government reviews foreign acquisitions of companies with assets valued at more than C$312 million ($306 million) under the Investment Canada Act, and can reject transactions that don’t provide a “net benefit” to Canada.
“We are always open to improving the regime,” Paradis said today in an interview in New York, where he met with U.S. company executives and investors. “If there are some things we can do to better address this and provide certainty, we will certainly be happy to look into it.”
Paradis’ remarks come amid calls for changes to Canada’s review process that would make it more transparent. The government last year rejected a proposed $40-billion hostile bid for fertilizer maker Potash Corp. of Saskatchewan Inc. by Australia-based BHP Billiton Ltd.
It was the second time in two years Conservative Prime Minister Stephen Harper’s government blocked a foreign acquisition. In 2008, the government rejected a bid by Minneapolis based Alliant Techsystems Inc. to acquire the aerospace division of Vancouver-based MacDonald, Dettwiler and Associates Ltd. Canada hadn’t previously rejected a foreign acquisition since the Investment Canada Act took effect in 1985.
Harper told Bloomberg News in a Sept. 21 interview that Canada will “proceed with caution” as it considers allowing more foreign takeovers, wanting to ensure they don’t lead to a loss of head office jobs or declining industry leadership.
‘Solid Regime’
Paradis called the existing system a “solid regime” that has worked well. “Our record shows that we’re open to foreign investment,” said Paradis, 37, who took over as industry minister May 18.
Canada’s system for weighing takeovers based on “net benefit” is “highly subjective and unpredictable,” the Toronto-based C.D. Howe Institute said in a study released yesterday. The system, which is more restrictive than in countries such as Australia, may have contributed to the decline in Canada’s share of global foreign-direct investment over the last 30 years, said Philippe Bergevin and Daniel Schwanen, the study’s authors.
Foreign investors must provide evidence to prove their acquisition represents a “net benefit” to Canada, which the industry department evaluates based on factors including impact on employment, productivity and competition, according to the department’s website.
Reverse Onus
Information provided by companies is protected by “very rigid” confidentiality provisions meant to make the process more efficient, the department says.Rather than putting the onus on companies, the federal government should have to prove that takeovers aren’t in the national interest, and disclose reasons for rejecting a transaction, the C.D. Howe study recommended.
Paradis said the government will make a decision “sooner than later” on whether to loosen foreign-ownership restrictions in Canada’s telecommunications sector. The government is also developing the ground rules for an auction of wireless spectrum that may invite bids from companies such as BCE Inc., Telus Corp. and Rogers Communications Inc.
“We want to move quick on this but we want to move correctly,” said Paradis.
The minister called Research in Motion Inc. a “flagship” company that the government wants to ensure has “all the tools it needs” to succeed. He declined to say if RIM, which some investors have said should be broken up or sold, would be considered off limits to a foreign takeover.
http://www.businessweek.com/news/2011-12-03/canada-open-to-changing-foreign-takeover-law-paradis-says.html
http://www.businessweek.com/news/2011-12-03/canada-open-to-changing-foreign-takeover-law-paradis-says.html
Thursday, 1 December 2011
Canada clamps down on corruption
Calgary Herald|
As many as 30 foreign corruption cases are now being investigated by the RCMP and fines could easily go higher, says Milos Barutciski, an international trade lawyer with the Calgary-based Bennett Jones law firm.
Canada’s newfound anti-corruption zeal is part of a worldwide push to enforce the rule of law in transborder business. This crackdown has seen record fines worldwide rise from around $100 million six years ago to a new record of $1.6 billion paid by the German engineering conglomerate Siemens for systematic bribery of government officials in a dozen countries.
Barutciski says Canadian business leaders with foreign operations need to understand that four key trends have become very clear:
• Enforcement in Canada and worldwide has become much more aggressive;
• Fines are huge and rising;
• Canadians doing business in various countries could very easily find themselves facing charges in the United States or the United Kingdom; and,
• There is no double jeopardy protection for foreign corruption charges. This means companies can be charged multiple times in multiple jurisdictions for the same offences. Siemens, for instance, paid $800 million in fines in the U.S. and then received another $800 million in fines from a German court.
In addition to filing charges in the Niko case, which the judge called a “dark stain on Calgary’s reputation as the energy capital of Canada,” the RCMP has: executed search warrants against Canadian engineering firm SNC-Lavalin related to possible corruption in the awarding of a contract to build a World Bank-funded $1.2-billion bridge in Bangladesh, opened an investigation of Blackfire Exploration related to charges of bribery of a Mexican public official, brought by anti-poverty groups; and, charged Nazir Karigar, of Ottawa, with attempting to bribe an Indian public official in connection with a multi-million-dollar contract for a security system.
Calgary-based RCMP Staff Sgt. George Prouse confirms Barutciski’s estimate that police are currently working on a total of about 30 corruption cases Canada-wide. He says the new unit started slowly “but I have to say it didn’t take long to get the numbers up.” He also agrees that tools available to the RCMP in investigating offences are extensive.
“You have to be cautious about where you’re doing business,” and be aware of traps that lead to bribery propositions, such as unreasonable delays in permitting. “Don’t get impatient. It’s an easy trap to fall into,” Prouse says. “They key is, be ethical. ‘Bribe’ is a bad word — so it must be a bad thing to do.”
Barutciski observes that, on a per-employee basis, the Niko fine was actually larger than the mammoth fines levied against Siemens. He says Canadian companies need to understand that they could face similar penalties if they violate the CFPOA or fail to take adequate measures to prevent employees or contractors doing so. He says the judge in the Niko case explicitly based his judgment on fines levels in the US.
Moreover, Barutciski says, “the U.S. is keen to take jurisdiction wherever possible” in cases of foreign corruption and “American law is cast in very extraterritorial terms.” The U.S. Foreign Corrupt Practices Act (FCPA) gives its courts jurisdiction over any company anywhere in the world that is listed on an American stock exchange or over any act conducted in furtherance of an offence in the US,” he says. “And they can take a fairly broad view of that. They’ve even said if the bribe is paid in US funds, that could be enough. If there’s a meeting in furtherance of the offence that happens in the US, that could trigger US jurisdiction.” And the new UK Bribery Act is similarly aggressive in giving British courts jurisdiction.
“Having a policy and responding quickly and decisively (to violations) may limit culpability,” he says.
“By the time you have the police at your door, your options have narrowed considerably and you’re into damage control,” Robertson says. But there are still important things companies can do to limit damages.
He says one example might be providing photo-copy facilities to police, which enables them to conduct their search efficiently and allows the company and its lawyers to get an immediate handle on what information is being seized. This helps the company and its counsel to begin preparing an informed defence far sooner than if they have to wait for charges to be laid, as well as to protect the company’s reputation more effectively. Lawyers can also move to protect documents that may be privileged, as well as the rights of employees and the company, without obstructing the police in their investigation, Robertson says.
“We have a Canadian law that was ignored for the first decade of its existence,” Robertson says. “The RCMP are now peeling the onion” to uncover varying levels of violations and take serious cases to court.
— Brian Burton
© Copyright (c) The Calgary Herald
The stunning $9.5-million fine of Niko Resources for bribing a Bangladeshi official is only the beginning of criminal charges in Canada for corruption of foreign officials, experts say.
As many as 30 foreign corruption cases are now being investigated by the RCMP and fines could easily go higher, says Milos Barutciski, an international trade lawyer with the Calgary-based Bennett Jones law firm.
Canada’s newfound anti-corruption zeal is part of a worldwide push to enforce the rule of law in transborder business. This crackdown has seen record fines worldwide rise from around $100 million six years ago to a new record of $1.6 billion paid by the German engineering conglomerate Siemens for systematic bribery of government officials in a dozen countries.
“Even as a corporate counsel, my hat is off to this initiative,” Barutciski says. “Corruption is the bane of international aid” and routing out foreign “kleptocrats” is one of the reasons the World Bank has become very involved in identifying violators and supporting prosecutions.
Barutciski says Canadian business leaders with foreign operations need to understand that four key trends have become very clear:
• Enforcement in Canada and worldwide has become much more aggressive;
• Fines are huge and rising;
• Canadians doing business in various countries could very easily find themselves facing charges in the United States or the United Kingdom; and,
• There is no double jeopardy protection for foreign corruption charges. This means companies can be charged multiple times in multiple jurisdictions for the same offences. Siemens, for instance, paid $800 million in fines in the U.S. and then received another $800 million in fines from a German court.
Canada passed its Corruption of Foreign Public Officials Act (CFPOA) in 1999 — but never created an enforcement group until pressure from the Organization for Economic Co-operation and Development (OECD) became increasingly intense. (See sidebar) In 2007, Ottawa finally announced the formation of an RCMP International Anti-Corruption Unit with seven officers in Calgary and seven in Ottawa. Barutciski says that group has been “very busy” since its formation and prosecutions are now moving forward.
In addition to filing charges in the Niko case, which the judge called a “dark stain on Calgary’s reputation as the energy capital of Canada,” the RCMP has: executed search warrants against Canadian engineering firm SNC-Lavalin related to possible corruption in the awarding of a contract to build a World Bank-funded $1.2-billion bridge in Bangladesh, opened an investigation of Blackfire Exploration related to charges of bribery of a Mexican public official, brought by anti-poverty groups; and, charged Nazir Karigar, of Ottawa, with attempting to bribe an Indian public official in connection with a multi-million-dollar contract for a security system.
Calgary-based RCMP Staff Sgt. George Prouse confirms Barutciski’s estimate that police are currently working on a total of about 30 corruption cases Canada-wide. He says the new unit started slowly “but I have to say it didn’t take long to get the numbers up.” He also agrees that tools available to the RCMP in investigating offences are extensive.
“Corruption of foreign officials is a federal, indictable offence,” Prouse says, and investigative tools include search warrants, seizure of evidence, arrest of individuals, production orders for third-party evidence, electronic surveillance and co-operation with foreign police forces, such as the FBI.
“You have to be cautious about where you’re doing business,” and be aware of traps that lead to bribery propositions, such as unreasonable delays in permitting. “Don’t get impatient. It’s an easy trap to fall into,” Prouse says. “They key is, be ethical. ‘Bribe’ is a bad word — so it must be a bad thing to do.”
Barutciski observes that, on a per-employee basis, the Niko fine was actually larger than the mammoth fines levied against Siemens. He says Canadian companies need to understand that they could face similar penalties if they violate the CFPOA or fail to take adequate measures to prevent employees or contractors doing so. He says the judge in the Niko case explicitly based his judgment on fines levels in the US.
Moreover, Barutciski says, “the U.S. is keen to take jurisdiction wherever possible” in cases of foreign corruption and “American law is cast in very extraterritorial terms.” The U.S. Foreign Corrupt Practices Act (FCPA) gives its courts jurisdiction over any company anywhere in the world that is listed on an American stock exchange or over any act conducted in furtherance of an offence in the US,” he says. “And they can take a fairly broad view of that. They’ve even said if the bribe is paid in US funds, that could be enough. If there’s a meeting in furtherance of the offence that happens in the US, that could trigger US jurisdiction.” And the new UK Bribery Act is similarly aggressive in giving British courts jurisdiction.
Steve Robertson is a Bennett Jones barrister who says prevention is the best defence against corruption charges. Robertson says this means establishing an effective compliance policy before there’s a problem. And while most large companies know this, he says, their compliance policies are not uniformly solid. A good policy includes periodic audits specifically aimed at detecting corruption, plus measures to educate employees, contractors and agents and to deter them from committing offences.
“Having a policy and responding quickly and decisively (to violations) may limit culpability,” he says.
“By the time you have the police at your door, your options have narrowed considerably and you’re into damage control,” Robertson says. But there are still important things companies can do to limit damages.
The first rule is to co-operate fully with investigators and retain expert legal counsel immediately. He says lawyers will help a company under investigation to protect its interests while at the same time ensuring the best possible relationship with authorities.
He says one example might be providing photo-copy facilities to police, which enables them to conduct their search efficiently and allows the company and its lawyers to get an immediate handle on what information is being seized. This helps the company and its counsel to begin preparing an informed defence far sooner than if they have to wait for charges to be laid, as well as to protect the company’s reputation more effectively. Lawyers can also move to protect documents that may be privileged, as well as the rights of employees and the company, without obstructing the police in their investigation, Robertson says.
“We have a Canadian law that was ignored for the first decade of its existence,” Robertson says. “The RCMP are now peeling the onion” to uncover varying levels of violations and take serious cases to court.
— Brian Burton
© Copyright (c) The Calgary Herald
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