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Surgeons at Toronto General Hospital
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Tax us more, doctors urge (Are the lawyers listening?) Add to ...

These are stories Report on Business is following Thursday, March 22, 2012. Get the top business stories through the day on BlackBerry or iPhone by bookmarking our mobile-friendly webpage.

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Tax us more, doctors say A group of doctors is taking a page from Warren Buffett's tax-the-rich call, urging the Canadian and Ontario governments to tax higher-income earners more. I hate extra taxes, but I like their argument and applaud their efforts.

Doctors for Fair Taxation plan to announce their scheme in Toronto this afternoon, calling for additional taxes on people earning more than $100,000. You'd be hit with an additional 1 per cent if you earn between $100,000 and $170,000, 2 per cent if you earn up to $640,000, and 3 per cent for up to $1.85-million. Above that it would be 6 per cent.

"We feel that this is a moral argument," Dr. Michael Rachlis, who founded the group that so far boasts more than 50 physicians, told The Canadian Press.

"We cannot talk about throwing people out of work and cutting needed programs for people," said Dr. Rachlis, an associate professor at the University of Toronto.

"If the situation is that dire that governments are really feeling that that should be done, it seems to me that the only way to think of that is to tax higher-income earners who've seen their taxes fall a lot."

The group projects that the Canadian government could take in some $3.5-billion from the plan, and the province of Ontario $1.7-billion.

"Our group considers higher taxes a small price to pay for a more civilized Canada," Dr. Rachlis said.

Their tag line is: "Doctors to governments: Tax us. Canada is worth it!"

Foreigners play with Telus shares Canada's Telus Corp. says foreign investors appear to be playing around with its shares, a move that could push the company past non-Canadian ownership limits after it announced that it would convert its non-voting stock into common.

The Vancouver-based telecommunications company, one of Canada's major players, said today some 24 per cent of its common stock was believed to be in foreign hands as of yesterday. But when applications for share purchases by non-Canadians are taken into account, and if approved, foreign ownership will rise by more than 35 million shares, taking it above 33 1/3-per-cent limit.

"Accordingly, the company is reminding non-Canadian investors of its reservation procedures," it said in a statement. "Telus is examining the situation and wishes to inform the market that its transfer agent may not be able to approve all the pending or new applications."

The problem, Telus said, appears to be related to a plan, announced a month ago, to convert non-voting shares to common stock. In the wake of the announcement, the company believes arbitrage investors are using "short-term, event-driven trading tactics" to profit, even though they have no concern about the long-term stock price.

Telus thinks the foreign investors are buying the common stock and shorting the non-voting shares.

"The sole purpose appears to be to exert influence over the proposed share conversion and to increase the share trading spread for near-term profit," it said.

"Since 2004, the level of non-Canadian ownership of common shares has been generally below 20 per cent and the current level is an exceptional development."

Markets sink Weak economic readings from China are again driving global markets lower, pushed along by similarly soft data from the euro zone.

Investors have been fretting over China, in particular, and today's manufacturing numbers only added to the angst. A private-sector purchasing managers index, or PMI, dipped to 48.1 this month, down from 49.6 in February and still below the key 50 level that separates contraction from expansion.

Europe's manufacturing numbers were also soft.

"Risk is being taken off the table this Thursday morning, inspired by a bout of bad economic news," said senior economist Jennifer Lee of BMO Nesbitt Burns.

"It started in the Asian session, with fresh worries about China’s economic growth stoked after the private sector’s measure of manufacturing showed another contraction this month," she said in a report. "... This points to further stimulative policy efforts coming from the [People's Bank of China]"

Lululemon profit climbs Lululemon Athletica Inc. posted gains across the board in its fourth quarter, and reached a milestone for the year in revenue. But its profit margin shrank and its inventories climbed, and its stock dipped.

The yogawear retailer said today it earned $73.5-million (U.S.) or 51 cents a share, diluted, in the quarter, compared to $54.8-million or 38 cents a year earlier. Revenue surged more than 50 per cent to $371.5-million, and same-store sales, a key measure for retailers, climbed 26 per cent.

Lululemon also boasted that its sales hit the $1-billion mark for the year.

As always with this company, it went somewhat beyond the traditional corporate report.

"Reaching a billion dollars in revenue is clearly an important milestone that as a company we can all be very proud of," said chief executive officer Christine Day. "But far more important than the number itself are the beliefs, values, culture and people that achieved it. We really are so much more than our numbers; it is the everyday actions of our dedicated team that translates into an unparalleled guest experience and allows us to achieve our ultimate goal of elevating the world."

Lululemon also projected revenue of between $265-million and $270-million and earnings per share of 28 cents to 29 cents for the first quarter of this year. For all of 2012, it expects revenue of about $1.3-billion and earnings per share of $1.50 to $1.57.

Retail sales disappointing Canadians are putting more money into their cars, but just about holding the line otherwise.

Retail sales in Canada increased 0.5 per cent in January, Statistics Canada said today. But that was driven by a 4.6-per cent jump in sales of new cars, the best gain in three years, along with a 2.8-per-cent jump in used cars and a 1.8-per-cent rise in parts and accessories.

If you remove autos from the measure, retail sales actually slipped by 0.5 per cent. Just five of the 11 industries measured posted increases in January, though they accounted for more than half of total sales.

Clothing and accessories shops were also among the winner, led by shoe stores with a gain of 4.2 per cent. Sales among building material and garden equipment slipped more than 5 per cent, but the weather wasn't as nice in January as it is now. Grocery stores also slipped, as did electronics and appliance outlets.

"In spite of the broad-based weakness, volumes were up 0.3 per cent, although much of that comes from the autos sector where a low markup usually translates into a weak positive impact on GDP," CIBC World Markets economist Emanuella Enenajor said of the overall report.

"Taking together the month’s soft factory, wholesaling and retail print, we expect January to post a decline in activity - suggesting a soft start to the first quarter of the year."

EI benefits rise The number of Canadians collecting regular jobless benefits is climbing again, notably in the province of Quebec.

The number of people receiving regular benefits under Canada's Employment Insurance program rose in January by 2.3 per cent, or 12,400, to 561,100, Statistics Canada said today.

That brings the overall level back to about the levels in mid-2011.

Claims rose in eight provinces, the agency said, with the heftiest rise in Quebec.

Initial and renewal claims climbed by 1.6 per cent, led by a 4.4-per-cent increase in Quebec. That was followed by Ontario, at 3.9 per cent, and New Brunswick, at 2.8 per cent. Again illustrating Canada's regional divisions, claims fell in the western provinces of Alberta, British Columbia and Manitoba, and the eastern province of Nova Scotia.

In the United States, signs continue to point toward a labour market on the mend, though with a long way to go.

Claims for initial jobless benefits fell last week by 5,000, the lowest in four years.

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  • Updated January 18 4:00 PM EST. Delayed by at least 15 minutes.

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