These are stories Report on Business is following Friday, May 24, 2013.
Where Canada ranks
Are Canadians getting enough paid time off work?
A new study puts Canada near the bottom of the list of developed countries when it comes to laws governing vacation and holiday time.
Canada ranks third from the bottom in a study of 21 OECD countries in the study by the Washington-based Center for Economic and Policy Research, though it notes some holidays vary among the provinces.
With two weeks of minimum mandated vacation and nine days of holidays, Canada ranks ahead of only Japan, at 10 vacation days and no holidays, and the United States, at zero for each.
Employers, of course, can and do go beyond that minimum vacation time.
Topping the list were Austria and Portugal, at a total 35 days each, Germany and Spain, at 34 days, and France and Italy, at 31.
European Union laws mandate a minimum for EU nations of 20 days a year, and several of its members go far beyond, according to the study by Rebecca Ray, a former research associate at the Center for Economic and Policy Research, and program assistant Milla Sanes and senior economist John Schmitt, both with the organization.
It’s not just Europe. New Zealanders get a combination of 30 days, and Australians 28.
The purpose of the study was to look at the United States, “the only advanced economy in the world that does not guarantee its workers paid vacation,” the researchers write.
“Canada and Japan are less generous than the rest of the world, but still require their employers to grant 10 days of paid annual leave,” they add.
“Both countries, however, grant rising vacation to workers based on their seniority. (In Canada, provincial governments set vacation policy. The 10-day leave … is representative of the federal regulations; most provinces set higher vacation minimums for workers with higher seniority.)”
RBC unveils supplier code
Royal Bank of Canada has unveiled a code of conduct for its suppliers, with a pledge on Canadian jobs and outsourcing.
Today’s announcement follows the controversy that embroiled RBC when it outsourced to a company using temporary foreign workers.
Chief executive offer Gordon Nixon had said in an April open letter that he would take the steps the bank announced today.
Under the code, suppliers must meet human rights, labour and employment standards, treat employees fair and with “respect for diversity,” and, when doing work for RBC, hire no foreign workers from outside the country in cases where “a worker eligible to work in Canada is available and able to perform the service.”
As for outsourcing, the bank said it will only send work offshore to suppliers “when their investment in scale, technology or operational knowledge provides superior skill sets and capabilities that RBC cannot duplicate inside its own business or in Canada.”
It won’t ship work overseas for “salary savings,” and will “make every effort to source in Canada.”
“For example, RBC’s Canadian client call centres are located in Canada , supporting RBC’s domestic and U.S. business, and they will remain in Canada despite the trend in many industries to offshore them,” the bank said.
“RBC uses the temporary foreign workers program on a very limited basis for executives and for workers with highly specialized skills and will not use the ‘low skills workers’ program to fill jobs in Canada.”
The bank also pledged to help support and retrain workers whose jobs are affected by restructuring and outsourcing.
MTS strikes Allstream deal
Manitoba Telecom Services Inc. is selling its Allstream business to Accelero Capital Holdings in a deal they say values the unit at $520-million.
The sale to the investment-management concern caps a strategic review of options “to enhance Allstream’s growing competitiveness and improve the long-term position of the company’s stakeholders,” MTS said in a statement.
Allstream runs a fibre network and sells communications services to Canadian businesses.
“This transaction makes MTS a stronger, more focused and more valuable company,” added chief executive officer Pierre Blouin.
“MTS goes forward as a pure-play telecom with a strong consumer franchise and significant free cash flow to support our dividend. We will also have sufficient capital to invest in wireless spectrum and to continue bringing fibre-to-the-home, 4G LTE wireless technology and other products and services to more communities across Manitoba, further solidifying our position as the undisputed market leader in the province.”
MTS said it expects to gain $405-million on the deal, from which it will pump $130-million into its pension plan and pay off $70-million in short-term debt that had been used to pre-fund pension commitments.
Accelero is one of the investment vehicles of Egyptian billionaire Naguib Sawiris, who was also one of the original backers of Wind Mobile.
Tokyo market volatile
Global markets are on something of a roller coaster again today, notably in Japan.
Tokyo’s Nikkei, which plunged 7.3 per cent yesterday, managed to end today with a gain of 0.9 per cent, but not before plummeting again and then climbing back.
"Japan sits at a dangerous juncture and most are watching [Japanese government bonds] and [foreign exchange] markets closely," said chief currency strategist Camilla Sutton of Bank of Nova Scotia.
Stocks slipped in Hong Kong and Europe. In North America, the S&P 500 closed down slightly, while the Dow Jones industrial average and Toronto's S&P/TSX composite made slim gains.
“The fairly chaotic trading session in Asia overnight, with Japanese stocks ending modestly higher, has imbued a degree of caution into the investor mindset,” said senior market strategist Brenda Kelly of IG in London.
“Current trade volumes are low, which is not altogether surprising given that both the U.S. and the U.K. will be closed for public holidays on Monday, so there is little real incentive to take on risk,” she said of the European exchanged.
Tokyo is being bounced around, economists say, seemingly because investors aren’t clear about the goals of the Bank of Japan, which has pledged to end the scourge of deflation and juice the economy from its slumber.
The Japanese economy turned in an impressive performance in the first quarter, though that had more to do with confidence in the new prime minister, Shinzo Abe, than with his actual Abenomics.
Today, said Scotiabank's Derek Holt and Dov Zigler, the new central bank governor failed to clear up the confusion.
“The cause of the volatility in Japan seems to be uncertainty about the ultimate aims of BoJ policy, with markets struggling to ascertain if the BoJ is trying: a) to attain lower absolute levels of yields (consistent with its bond buying program), b) higher absolute levels of yields (consistent with its efforts to boost expectations for economic growth and inflation), or c) even more deeply negative real yields (which could be consistent with any variety of nominal yields depending on where inflation expectations happen to be),” they said.
“ Our interpretation of what markets are doing at present – wittingly or unwittingly – is pricing in option (c), which also explains why the breakeven rates in Japan have risen since the BoJ’s new policy became more apparent to markets,” Mr. Holt and Mr. Zigler added.
- Follow our Inside the Market Blog
- Asian stocks take wild ride, Europe steady a day after global selloff
- What does the extreme Japanese market volatility say about Abenomics?
National Bank hikes dividend
National Bank of Canada today boosted its dividend by 4 cents, to 87 cents, for the quarter ending July 31, as it posted a dip in second-quarter profit because of a special gain last year.
The smallest of Canada’s six major banks earned $434-million or $2.49 a share in the quarter, down from $553-million or $3.22 a year earlier.
The bank, though, cited a gain of $198-million on a deal a year ago.
Excluding unusual items, National’s profit climbed to $369-million or $2.08 cents from $347-million or $1.95.
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