These are stories Report on Business is following Monday, May 27, 2013.
Transit plan would hurt consumers, retail group says
The Metrolinx proposal to fix Toronto’s transit woes would be a “double whammy” for consumers, hitting them not only through a hike in the harmonized sales tax, but also through parking tax costs passed on by stores, retailers warn.
The Retail Council of Canada warning was referring to a plan by the regional transit agency on how to pay for a massive fix-up in the Toronto area.
As The Globe and Mail’s Oliver Moore reports, the HST would rise by a percentage point, which would likely affect all of Ontario, though only the funds raised in the city would be used to fix the transit system.
The group also proposes a 5 cent hike in gasoline taxes, a non-residential, or business, parking levy of some 25 cents a day per space, and a 15 per cent increase in development charges.
The average family would thus pay some $477 a year to help fund a program that would include new light rapid transit, a subway expansion, and improvements to roads and highways, among other things.
Metrolinx heralded the plan, warning that congestion in Toronto is getting worse all the time, and “having an increasingly negative impact on both our quality of life and our region’s economy.”
The retailers say they agree transit needs to be fixed, but the parking tax recommendation is “flawed” in many ways.
“It would fall disproportionately on retail merchants, relative to other business enterprises,” the group said in a statement today.
“Retailers, in turn, would have little option but to pass these costs on in the form of higher retail prices and these higher prices would affect all purchases of groceries and general merchandise.”
David Wilkes, the group’s senior vice-president, described it as “just another form of property tax” that would affect consumers whether they use public transit, their cars, or simply walk to the store.
“It would be a double whammy for consumers, over and above Metrolinx 1 per cent sales tax increase,” he said.
Valeant to acquire Bausch & Lomb
Valeant Pharmaceuticals International Inc., an acquisitive company if ever there was one, has struck a deal to acquire Bausch & Lomb Holdings Inc. for $8.7-billion (U.S.) in cash.
Some $4.5-billion of that will go to the investor group that holds the eye care company, and $4.2-billion will be used to repay debt, The Globe and Mail’s Bertrand Marotte reports.
Valeant said the deal would be financed with debt and up to $2-billion of new equity, with Goldman Sachs committing the financing.
“The acquisition positions Valeant to capitalize on growing eye health trends driven by an aging patient population, an increased rate of diabetes and demand from emerging markets,” the company said.
“The combined business will also benefit from access to a strong product portfolio and a late stage pipeline of innovative, new products.”
It's the latest in a series of acquisitions by the Canadian company.
SNC in amnesty program
SNC-Lavalin Group Inc. is launching what it calls an “amnesty program” aimed at ferreting out any corruption.
The Monteal-based company, dogged by scandal of late, is calling on all employees “to report potential corruption and anti-competition matters in which they may have direct or indirect knowledge,” it said today.
“The amnesty program is intended to assist SNC-Lavalin in its efforts to fully gather and assess the facts associated with corporate ethics matters in order to resolve them,” the company said.
“To SNC-Lavalin’s knowledge, this is the first time that a Canadian company has initiated an amnesty program,” it added in a statement. “Such program’s are strongly encouraged by the international ethics community in situations like the one SNC-Lavalin is facing.”
It’s the latest move since the engineering and construction giants hired Andreas Pohlmann as chief compliance officer, pledging a commitment to ethical behaviour and strong governance.
“Amnesty programs are known to be highly effective means of getting to the bottom of ethics and compliance issues in large organizations,” said Mr. Pohlmann.
“While the vast majority of SNC-Lavalin’s employees will have nothing to report, this offer of amnesty will allow us to uncover and quickly deal with any remaining issues,” he said in the statement.
“Our goal is to turn the page on a challenging chapter in the company’s history, so we can focus all of our attention on creating value for our stakeholders.”
Under the program, an SNC employee would file a “request” with Mr. Pohlmann between early June and the end of August.
The company promised it won’t claim for damages or fire workers who “voluntarily, truthfully and fully” report any breach of its code of ethics and business conduct.
Notably, that doesn’t go for executives in the office of the president or management committee groups, or “anyone who directly profited from an ethical violation.”
- SNC-Lavalin offers amnesty for whistleblowers
- Barrie McKenna: Supply, demand: For every bribe made, there's an outstretched hand
- SNC-Lavalin sought Ottawa's help to give Gadhafi's son vice-president's job
- Some of SNC's missing millions found in Montreal real estate, RCMP alleges
- SNC-Lavalin hit with rating downgrade
- SNC-Lavalin says former executive's illegal actions justify firing
Canadians concerned, but happy
Canadians increasingly believe that inequality in the economy is on the rise, but are the most satisfied in the world with their own financial position, according to a new study.
Some 76 per cent of Canadians believe the gap between the rich and the poor has increased over the past several years, while 18 per cent think it is unchanged and just 2 per cent feel it has declined, according to the study of 39 countries by the Pew Research Center, which released its findings last week.
But less than half – 45 per cent – see inequality as a problem, The Globe and Mail's Tavia Grant reports.
Among advanced economies, that compares to a high of 84 per cent in Greece and a low of 33 per cent in Australia.
When it comes to personal finances, Canadians top the list of believing theirs is good, at 82 per cent, followed by Germany, Australia, the United States and Britain.
That's among advanced economies. When emerging markets and developing economies are added, Malaysia joins Canada at 82 per cent.
At the bottom of that list is Greece, where unemployment is raging, at just 15 per cent.
“Among wealthier nations, Canadians, Germans and Australians stand out as especially satisfied with their personal finances,” the study says.
“All three also tend to have more positive views about the state of their national economies.”
On that score, 67 per cent believe the economy is in good shape. That matches the level in Australia, but is below the 75 per cent of Germany, which tops that list.
The study also looks at what it calls the “North American divide” between the United States and Canada, where 701 people were polled in early March.
“By almost every measure, publics in Canada and the United States see the world they are experiencing through different lenses,” it says.
“Canadians are generally happier with their economic lives, although the U.S. public is more optimistic about the future.”
The differences are, indeed, stark in some notable categories:
Some 58 per cent of Americans see unemployment as a “very big problem,” compared to 37 per cent in Canada. On public debt being a trouble spot, the comparison is 61 per cent to 40 per cent. On not having enough money to buy food, 24 per cent to 9 per cent. On not having enough for medical care, 31 per cent to 11 per cent. And on not enough money for clothes, 27 per cent to 11 per cent.
- Read the study
- Tavia Grant in Economy Lab: Canadians believe income inequality getting worse
- Linda Nazareth in Economy Lab: Income inequality data still giving off worrisome economic signal
- With Carney set to leave, calls grow for shift in rate stance
- Economy to pick up in first quarter before braking again
- Carl Weinberg in Economy Lab: Europe's problem isn't a recession - it's a depression
How executives rank
A fevered pace of CEO turnover at Canada’s largest companies is leading to high compensation bills as firms pay millions in severance to former executives while also shelling out to attract new leaders, The Globe and Mail's Janet McFarland reports in her annual look at executive compensation.
A review of CEO pay at Canada’s 100 largest companies shows at least 21 firms on the list have had CEO changes since the start of 2012, and many of the arriving and departing executives are filling the top of the pay charts
Canada’s CEO compensation leader in 2012 was Hunter Harrison, who was paid $49-million after becoming chief executive officer of Canadian Pacific Railway Ltd. following a high-profile proxy battle with a dissident shareholder who wanted to change leadership at the company.
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