These are stories Report on Business is following Tuesday, July 9, 2013.
Competition Bureau moves on retailers
The Competition Bureau is accusing two of Canada’s largest discount furniture chains, Leon’s Furniture Ltd. and The Brick Ltd., of deceptive marketing with their well-known “buy now, pay later” promotions, The Globe and Mail’s Jeff Gray reports.
Such promotions, the watchdog alleges, actually require upfront fees that can run into the hundreds of dollars.
Advertisements for the furniture and appliance retailers often promise shoppers the ability to buy without even a down payment. In its court documents, the bureau included a sample ad that said customers would pay “absolutely nothing” for up to 21 months.
The bureau filed a civil action in Ontario Superior Court today, alleging the results of an investigation into the companies show that the fine print can require customers to pay various up-front “administrative,” “processing” or “membership” fees.
For example, the bureau alleged in its document, a customer wanting to buy a $1,500 sofa with no money down could end up paying more than $350 up front.
No allegations have been proven in court. A spokesman for Leon’s, which acquired The Brick, was not immediately available to comment.
Consumers must receive “clear and accurate information” about prices when they buy products, Competition Commissioner John Pecman said in a statement.
NYSE to run Libor
The parent of the New York Stock Exchange is taking over administration of a key, scandal-plagued interest rate.
NYSE Euronext said today its rate administration subsidiary was chosen to take over Libor, or the London interbank offered rate, in a deal expected to be completed by early next year after a regulatory review.
The British Bankers’ Association had run the benchmark since it began, and changes have been promised amid a rate-manipulation scandal that caught up several of the world’s big banks.
“As part of a leading global exchange and market infrastructure group, NYSE Euronext Rate Administration Ltd. is uniquely placed to restore the international credibility of Libor,” the company said.
IMF bumps up Canada
The International Monetary Fund has bumped up its forecast for economic growth in Canada, even as it trimmed its projection for the global economy.
The IMF now expects Canada’s economy to expand by 1.7 per cent this year, up from its earlier forecast of 1.5 per cent, and by 2.2 per cent in 2014, down by 0.2 of a percentage point compared to earlier.
It cut its forecast for global growth in each of the two years, to 3.1 per cent this year and 2.8 per cent next year.
Canada, Britain and Japan were the only countries to receive a stronger forecast this year.
“Downside risks to global growth prospects still dominate: while old risks remain, new risks have emerged, including the possibility of a longer growth slowdown in emerging market economies, especially given risks of lower potential growth, slowing credit, and possibly tighter financial conditions if the anticipated unwinding of monetary policy stimulus in the United States leads to sustained capital flow reversals,” the organization said.
“Stronger global growth will require additional policy action. Specifically, major advanced economies should maintain a supportive macroeconomic policy mix, combined with credible plans for reaching medium-term debt sustainability and reforms to restore balance sheets and credit channels.”
Housing starts slip
Home construction in Canada continues to run at a strong pace, though down in June from May
Housing starts across the country slipped last month to an annual pace of 199,586 units from May’s 204,616, Canada Mortgage and Housing Corp. said today.
Construction starts on single homes declined by 4.1 per cent, and those for multiples, such as condominiums and apartments, by 2 per cent.
In urban areas, British Columbia was the only province to see an increase.
“While a slowdown in winter time homebuilding suggested housing was starting to cool off, today’s reading taken together with yesterday’s robust building permits number, suggests residential construction still has some steam left, potentially garnering support from earlier robust condominium pre-sales,” said economist Emanuella Enenajor of CIBC World Markets.
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Air Canada moves up
Airlines are like cellphone companies and banks in that we love to complain about them.
So here’s a tidbit for today: Air Canada is moving up the list in a ranking of who gets you there on time.
According to FlightStats, which compiles daily information, Air Canada ranked No. 2 in June among the major North American carriers for getting travellers to the gate within 15 minutes of the scheduled arrival, at 81.28 per cent.
At the top of the list is Alaska Airlines of Seattle, at 86.8 per cent, and No. 3 is Delta Air Lines, at 76.39 per cent.
Note that the statistics, also published by Forbes, are for what FlightStats considers North America’s major airlines.
Air Canada holds a different, lower rank for all North American carriers, and different again among the world’s airlines.
Notable for Air Canada is how it has moved up the FlightStats majors list, from No. 3 in May, even though the percentage was higher, at 82.86, and No. 6 in April, at 75.45.
It ranked No. 8 in each of the first three months of the year, with percentages ranging from 59.2 per cent to 70.2 per cent.
(In June, WestJet, by comparison, stood at 80.61 per cent, and Porter at 73.93 per cent.)
Just an observation here as I caught up today with the news of Ottawa’s decision to bring back old British-style ranks for the army: Canada is returning to many things British, while Britain is opting for new-style Canadians.
Consider that Britain has imported Mark Carney and Moya Greene to head the Bank of England and Royal Mail, respectively, the former as governor and the latter as chief executive officer.
Both are making their mark: Mr. Carney, the former Bank of Canada chief, ushered in a new era of central bank communications at the 319-year-old institution last week, and shook up the markets in the process.
Ms. Greene, in turn, is shaking up the almost 500-year-old postal operation, which is soon to be privatized. Details of that, said to be Britain’s largest such move in about 20 years, are expected this week.
Then there’s Normand Boivin, a former official at Montreal Dorval Airport who has been chief operating officer at Heathrow since mid-2011.
Yesterday, Canada’s defence minister announced plans to bring back traditional ranks and insignia from the two world wars and the Korean conflict.
That means a return to “pips” and crowns as insignia, ranks such as trooper, sapper and fusilier and badges with crossed swords, maple leaves and a crown.
"This takes nothing away from the Maple Leaf," Defence Minister Peter Mackay said yesterday, according to The Canadian Press.
"There are other places which the Maple Leaf is honoured. This in no way diminishes Canadian identity, and I would suggest we are returning to the insignia that was so much a part of what the Canadian Army accomplished in Canada's name."
The Canadian government has, of course, also been returning to “Royal” in terms of the names of the Canadian air force and navy. Last month alone, it restored the historical names of the Royal Canadian Armoured Corps, the Royal Canadian Corps of Signals and the Royal Canadian Infantry Corps, among others.
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