These are stories Report on Business is following Wednesday, Nov. 13, 2013.
Law professor on Ford
A Toronto law professor raises a fascinating issue today where the city’s embattled mayor is concerned.
York University’s David Doorey, a professor of labour and employment law, looks at how employment standards and human rights legislation would play into the scandal were Mayor Rob Ford a normal civic worker.
In his Law of Work blog, Prof. Doorey says it’s a virtual certainty that the mayor, as a “regular city employee,” would have been tossed from his job.
This came as city council debated a motion to ask the mayor to take a voluntary leave.
“If Ford were an employee, he’d have been fired for cause by now,” the professor told me later.
“This is really a point I want my students to grasp – we hold politicians to a much lower standard of accountability for their conduct than we do a Wal-Mart cashier or McDonald’s burger flipper.”
But he also cites an interesting, and little understood, fact: Alcoholics and drug addicts are deemed “disabled” under human rights law, and, thus, can’t be the target of discrimination, including, generally, termination.
(For the record, Mayor Ford has consistently denied he's a drug addict or an alcoholic.)
“This usually means in practice that an addict gets at least one (and maybe more than one) chance to take time off from work to go through a rehab program before they can be fired for substance-related misconduct,” the professor writes on his blog.
“In Ontario, it is also illegal to discriminate against an employee based on ‘perceived disability’ … Therefore, if an employer terminates someone who it thinks is an addict without first offering to accommodate the employee by allowing a period of rehabilitation, then it may be found to have violated the [Ontario Human Rights Code], even if in fact the employee is not an addict.”
The mayor admits he smoked crack – probably during a drunken stupor – but says he’s no addict. And he won’t step down.
No allegations have been proven in court.
Prof. Doorey looks at different scenarios for the mayor were he a normal worker.
In the first, what if “regular city employee” Rob Ford were to insist he’s not addicted, as he claims?
“The employer says, ‘Okay, good, then you are just a lying, dishonest, law-breaking poor excuse for a human being and you are fired for cause.’ Would Rob Ford have a human rights complaint on those facts?”
With no evidence of addiction, or repeated denial of addiction, human rights law wouldn’t be an issue, Prof. Doorey told me.
The other scenario is the employee apologizing and blaming his ill behaviour on an addiction. (Which, according to Mr. Ford, it isn’t.)
“Would the employer have a legal obligation to accept Ford’s request, or could the employer still terminate Ford?” the professor writes.
"If he is an addict, then he is considered disabled under the Human Rights Code,” he said of a hypothetical situation, in an e-mail exchange with me.
“If an expert on addiction could testify that his behaviour was caused by his addiction, then human rights law would demand that the employer accommodate the employee's addiction before firing them,” the professor told me.
“This usually means allowing the employee to take an unpaid leave (maybe with insurance benefits if there is short term disability insurance) to seek treatment, and once cleared by an addiction expert, given a chance to return to work.”
Where Yellen stands
The incoming chair of the Federal Reserve says the United States has rebounded from “the dark days” of the financial crisis, but has further to go.
Janet Yellen, who will appear tomorrow before the Senate banking committee for her confirmation hearing, noted that the private sector has created 7.8 million jobs since the depths of the meltdown, housing appears to have “turned a corner,” and the auto industry has made “an impressive comeback.”
In prepared remarks for the hearing, though, she cites what needs to be done.
“Unemployment is down from a peak of 10 per cent, but at 7.3 per cent in October, it is still too high, reflecting a labour market and economy performing far short of their potential,” she says in the text, which was posted on the U.S. central bank’s website today.
“At the same time, inflation has been running below the Federal Reserve’s goal of 2 per cent and is expected to continue to do so for some time.”
Ms. Yellen also cited the Fed’s dual mandate, of maximum employment and stable inflation.
Bank of England roils markets
Mark Carney’s Bank of England is making waves again.
Mr. Carney defended his forward guidance policy today, boasting that it has already helped Britain’s economy even though underlying assumptions have changed, The Globe and Mail’s Paul Waldie reports from London.
The central bank has said it won’t look at hiking its benchmark interest rate until unemployment eases to at least 7 per cent, which it wasn’t expecting until mid-2016.
Today, however, there are suggestions that will come much earlier, possibly by late 2015 or even sooner.
Suggestions of an earlier-than-expected rate hike sent the London market into a tailspin today, raising questions among observers after Mr. Carney also suggested that unemployment could ease earlier based on market interest rates, and the assumption that the central bank’s benchmark follows those.
“We’ve long warned of the perils attached to the Bank of England’s conditional promise not to raise its policy rate until [the second half of] 2016,” said Derek Holt and Dov Zigler of Bank of Nova Scotia.
“With this morning’s actions, the BoE has abandoned prior guidance and now believes that the unemployment rate will hit its 7-per-cent threshold by [the third quarter of] 2015 and therefore confirms market expectations that rate hikes might commence prior to the BoE’s earlier guidance of just a few months ago,” they added.
“Indeed, the BoE has shifted responsibility for forecasting when the unemployment rate with hit the 7-per-cent target to markets … That appears to be switching the traditional order of the horse and the cart.”
Loblaw cuts forecast
Canada’s grocery wars are coming home to roost for the country's major chains.
As The Globe and Mail’s Bertrand Marotte reports, Loblaw Cos. Ltd. cut its profit projection for 2013 today as its third-quarter profit slipped by 29 per cent.
Among the items hitting the latest quarter were costs related its takeover of Shoppers Drug Mart Corp. and its real estate spinoff.
Loblaw profit fell to $154-million or 55 cents a share in the quarter from $217-million or 77 cents a year earlier. Adjust profit slipped to 78 cents a share from 81 cents. Revenue rose 1.9 per cent to just over $10-billion.
Loblaw, of course, is facing heightened competition, as are other retailers.
Metro Inc., in turn, posted a dip in profit to $83.6-million or 88 cents a share in its fourth quarter, from $145.1-million or $1.46 a year earlier.
- Bertrand Marotte: Loblaw warns on profit for 2013, third-quarter earnings drop 29%
- Marina Strauss: Grocers feeling pressure from retail war with U.S. giants
EC to analyze Germany
The European Commission has launched a study into Germany’s current account surplus amid complaints from others in Europe and the United States.
Germany is the powerhouse of the continent, and records strong surpluses, leaving others to complain about the heft of its export might.
“A high surplus does not necessarily mean that there is an imbalance,” European Commission chief Jose Manuel Barroso told reporters today, according to Reuters.
“We do need to examine this further and understand whether a high surplus in Germany is something affecting the functioning of the European economy as a whole.”
Ontario asks for project study
The Ontario government is throwing up a political challenge to TransCanada Corp.’s plan to convert an existing natural gas pipeline to carry oil from Alberta to eastern Canada, The Globe and Mail's Shawn McCarthy reports.
The Liberal government has asked its energy board to conduct a public review of the proposed $12-billion Energy East project, especially its implications for public safety, greenhouse gas emissions and the reliability of the province’s natural gas supply.
Energy Minister Bob Chiarelli said the pipeline project has the potential to benefit the entire country through a better-connected energy network, but that the province has a responsibility to ensure those benefits outweigh the risks.
Canada’s finance minister is winning plaudits for his fiscal numbers. But some of the country’s provinces, not so much.
“Ottawa has managed to keep its finances on the straight and narrow through a prolonged period of sluggish growth,” chief economist Douglas Porter of BMO Nesbitt Burns said of Jim Flaherty’s economic and fiscal update yesterday.
“Exceptionally low borrowing costs and fewer spending pressures than faced by the provinces have helped.”
As The Globe and Mail’s Bill Curry and Carrie Tait report, the Canadian government now forecasts a budget surplus of at least $3.7-billion for fiscal 2015-16 given spending cuts, control of civil service salaries and asset sales.
That forecast, unveiled by Mr. Flaherty in Edmonton, is far fatter than the original projection of $800-million.
According to the government’s new fiscal forecasts, the 2013-14 deficit is expected to come in at $17.9-billion and the 2014-15 shortfall at $5.5-billion. By 2018-19, the surplus would widen to almost $10-billion.
The new projections, said deputy chief economist Derek Burleton of Toronto-Dominion Bank, move Canada’s Conservative government “one big step closer” to meeting its goal of a balanced budget by its 2015-16 fiscal year.
But issues remain.
“The re-emergence of a surplus would certainly provide the government with more fiscal wiggle room as it heads into a likely 2015 election,” Mr. Burleton said.
“Still, surpluses expected to be in the order of 0.2-0.4 per cent of GDP would pale in comparison to the vast ‘status-quo’ surpluses enjoyed by the Chrétien government in the late 1990s,” he added, referring to the showing under former Liberal prime minister Jean Chrétien.
“Those surpluses were ultimately divvied up between tax cuts and spending increases,” Mr. Burleton said in a report on Mr. Flaherty’s fall update.
“The government’s plan to income split would cost roughly $2-billion alone. And after such an extended period of restraint, there will be increased pressure to spend in a multitude of areas. Tough decisions on how to allocate the limited surplus will be required.”
The improved showing in Ottawa stands in stark different to the fiscal performances of some of the provinces.
“Over all, the combined provincial deficit is still on pace to fall by roughly $4-billion this fiscal year after Ontario stuck to its target, but there is downside risk in a few other provinces,” said senior economist Robert Kavcic of BMO Nesbitt Burns.
He pointed specifically to Quebec and Nova Scotia.
“The province has been projecting a return to surplus, but that now looks questionable,” he said of Quebec.
“Nova Scotia has not updated its fiscal outlook since the Liberal election win, but let’s just say there is downside risk to the surplus projection maintained by the prior NDP government.”
Manitoba, Ontario, New Brunswick, Prince Edward Island and Newfoundland and Labrador are particular laggards, with projected deficits out to 2014-15 at the earliest, for PEI and Newfoundland and Labrador, and 2016-17 at the latest, for Ontario.
- Bill Curry and Carrie Tait: Tories’ $3.7-billion surplus clears a path for promised tax cuts
- Trish McAlaster’s infographic: Ottawa’s forecast for a 2015 surplus
- Adrian Morrow: Ontario's recipe for revenue includes crackdown on tax cheats, black market
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