These are stories Report on Business is following Thursday, May 26. Get the top business stories through the day on BlackBerry or iPhone by bookmarking our mobile-friendly webpage.
Ontario Tories want prison changes There will be no more free lunch for Ontario's prison inmates if Tim Hudak gets his way.
The provincial Conservative leader said today that if he wins the Oct. 6 election, he'll force inmates at provincial prisons to work up to 40 hours a week, doing manual labour like raking leaves, cutting grass, cleaning up garbage and getting rid of gaffiti.
Mr. Hudak takes exception to the yoga classes, writing workshops, cooking classes and high-def TV inmates now enjoy. Instead, under a Hudak government, they would have to earn prison money by working, which would allow them to buy things like coffee, time at the gym or vegging in front of the tube. Mr. Hudak calls them "credits," but it's akin to earning money to enjoy the finer things in life.
"We're not asking convicted prisoners to do anything more than what hard-working Ontario families do every day: Work," Mr. Hudak said in a statement.
(Actually, many people in Ontario work a 35-hour week, but it's not as though the inmates have somewhere else to be.)
Prison inmates taking part in work programs aren't covered by Ontario's Employment Standards Act, but I was curious to see what it would look like if they were. As in, if they enjoyed the same rights and benefits that apply in a traditional employment setting. So I looked through the frequently asked questions posted on the labour ministry's website. Here are some examples:
Pay? General minimum wage is $10.25 an hour, and $8.90 if you serve liquor. I've no idea what raking leaves, cutting the grass or picking up the trash is worth on an hourly basis, because I'm forced to do it for free at home. And I don't expect inmates are tending bar.
Can you be fired for being off sick? No, that's not a way out.
Do you have to give notice when you quit your job? No, unless you're pregnant and not returning, which isn't likely in this case. And, given Mr. Hudak's tone, he won't let you "quit" anyway.
Can you sue for wrongful dismissal? Yes, but in this case it's more likely to be for wrongful conviction.
What about coffee breaks? You can't work more than five consecutive hours without a 30-minute meal break, but employers don't have to provide anything else, like time for coffee. But if Mr. Hudak is offering "credits" to buy coffee, presumably there's time to drink it.
Extra pay for Sundays? Nothing guarantees that. And anyway, Mr. Hudak presumably wants everyone at church. He is a Conservative, after all.
Do employees get automatic discounts on employer products or services? No, but inmates already get free room and board. And who knows, Mr. Hudak might have a change of heart and decide to keep the "Freeing the Human Spirit" yoga classes for free.
What about dress codes? An employer has the right to decide. And it won't be pinstripes.
Libya fund loses billions Moammar Gadhafi appears to have learned what many other investors learned at the height of the financial crisis: Watch out for complex products.
Libya's sovereign wealth fund lost billions last year on products such as currency derivatives and others. An internal report posted on the website of an activist group highlights the bath that the Libyan Investment Authority took by the middle of 2010.
The document posted by Global Witness was prepared by KPMG in london, and independently verified by The New York Times.
One of the heftiest hits, The Financial Times reports, was a massive drop in the value of the fund's $1.2-billion (U.S.) equity and currency derivatives portfolio. Over all, the fund's investments fell in value by about 4.5 per cent to more than $53-billion.
The report details how the fund stashed billions of the country's oil wealth in Wall Street and European banks.
Among the banks are Goldman Sachs Group Inc., JPMorgan and Société Générale. No Canadian banks are on the list. The money is in both accounts and structured financial products.
The holdings appear to have been legal at the time the document was prepared in mid-2010, though sanctions have now been imposed.
The document also shows the wealth fund invested in several stocks, including, among those listed as strategic, Canada's SNC-Lavalin Group Inc. . The value of its holdings in SNC, which works in Libya, is listed at about $16-million at the time.
"We don't control or have any say in who buys our stocks since they are publicly traded," said SNC spokesperson Claudia Martin
Other assets included U.S. government bonds.
TD posts higher profit Profit at Toronto-Dominion Bank rose 12 per cent in the second quarter, driven by one of its best quarters ever in Canadian retail banking, but falling short of analysts' estimates, Globe and Mail banking writer Tim Kiladze reports.
Canada's second-largest bank earned $1.33-billion, or $1.46 a share, in the quarter, compared with $1.18-billion, or $1.30 a share a year ago.
"This was the second best quarter on record for Canadian personal and commercial banking, despite fewer days in the quarter and, as expected, some slowing in personal banking volume growth from the exceptional levels seen in 2010," said Canadian banking chief Tim Hockey.
CIBC profit climbs Canadian Imperial Bank of Commerce today posted a gain in second-quarter profit from a year earlier, though earnings fell from the first quarter.
CIBC earned $678-million or $1.60 a share, diluted, compared to $660-million or $1.59 a year earlier. Profit missed analysts' estimates and were down from $799-million or $1.92 in the first quarter, The Globe and Mail's Tim Kiladze reports.
"CIBC delivered solid performance during the second quarter," said chief executive officer Gerry McCaughey . "The investments we are making in our retail and wholesale businesses are furthering our strength in Canada and positioning us well for the future."
National Bank boosts dividend National Bank of Canada today boosted its quarterly dividend by a nickel as it posted a 13-per-cent jump in second-quarter profit. It's the second dividend increase in six months, The Globe and Mail's Grant Robertson reports.
The bank hiked its dividend to 71 cents a share as it announced profit climbed to $295-million or $1.48 a share, diluted, from $261-million or $1.50 a year earlier.
"National Bank, which was recently recognized as one of the world's strongest banks, continues to be well positioned to expand its activities while paying excellent dividends to shareholders," said chief executive officer Louis Vachon.
National also announced the acquisition of Wellington West.
Quebecor profit flat Quebecor Inc. today posted a 4.5-per-cent jump in first-quarter revenue, though profit dipped slightly.
Quebecor earned $34.3-million or 53 cents a share, basic, in the quarter, compared to $34.9-million or 54 cents a year earlier. Revenue climbed to $990.5-million.
Weaker-than-expected subscriber results and thinner profit margins pressured the company, Globe and Mail telecom reporter Iain Marlow writes.
"Quebecor posted revenue and operating income growth in the first quarter of 2011 despite the impact of major investments in new products and services in 2011 for the purpose of protecting and expanding our markets, without affecting our financial position," said chief executive officer Pierre Karl Peladeau, noting the roll-out of a new mobile network by its Videotron unit.
"Despite the miss this quarter, we continue to expect Quebecor to generate decent profitability from its telecom segment, even with the offset from wireless startup costs as the wireless subscriber base increases," said Desjardins analyst Mher Yaghi.
"With the stock having declined from its highs, we believe that valuation as well as improving cash flow and profitability metrics in 2012 should offer good support to the stock."
Lundin stock sinks Shares of Lundin Mining Corp. plunged today after the company pulled itself off the market, saying it couldn't get a bid that reflected its worth.
Vancouver-based Lundin said it received proposals from several suitors interested in acquiring the entire company as well as other offers for individual assets, The Globe and Mail's Andy Hoffman and Brenda Bouw report. However, Lundin said it has decided that all of the proposals were too low.
Further bids, said UBS Securities Canada analyst Matt Murphy, appear unlikely.
TD Newcrest today cut its target on Lundin stock to $9 from $10.50.
Huffington Post in Canada The Huffington Post kicked off its international expansion today with the launch of its Canadian edition, Globe and Mail media reporter Susan Krashinsky writes.
The decision to come to Canada was fuelled also by the large audience that already existed for the U.S. edition, which attracts on average 1.5 million unique visitors each month who are Canadian.
Target unveils Canadian locations Target Corp. today named the first 105 Zellers locations it intends to convert, with stores in every Canadian province set to open by 2013.
Landlords have been told most of the stores will end up as Target locations, although a few may be passed on to other tenants or given back to the property owners if they turn out not to be good fits, The Globe and Mail's Steve Ladurantaye reports.
U.S. economy disappoints The U.S. economy turned in a disappointing showing this morning.
Economists had expected an initial reading of first-quarter economic growth would be revised higher, but the second measure came in at the same 1.8 per cent.
At the same time, the U.S. government reported that new claims for jobless benefits climbed higher last week, to 424,000, above the key 400,000 mark.
"Risks to the recovery continue to emanate from external sources," said senior economist James Marple of Toronto-Dominion Bank.
"The core risks to the outlook are the sovereign debt problem in Europe that threatens financial stability should a debt restructuring occur and efforts by China to rein in its economic growth to combat inflation that could have global repercussions."
In Economy Lab today
There are many reasons why Canada's deficit-taming experience of the 1990s is of little help as a guide for U.S. policy-makers today, Stephen Gordon writes.
In International Business today
South Africans are witnessing a humiliating slide in the country's gold status, The Globe and Mail's Geoffrey York reports from Johannesburg.
From today's Report on Business
- Standoff at GM: Retiree benefits v. the Impala
- Riding the wave in real estate
- CEO's abrupt exit leaves a hole at Tim Hortons
This article has been changed from an earlier version to correct the TD price target on Lundin stock