Skip to main content

The Globe and Mail

Hoover axes ads as ABC kills All My Children, One Life

These are stories Report on Business is following Tuesday, April 19. Get the top business stories through the day on BlackBerry or iPhone by bookmarking our mobile-friendly webpage.

Follow Michael Babad on Twitter

Hoover takes a stand Hoover, the vacuum cleaner company, is pulling its ads from ABC after the network cancelled two well-known soap operas, All My Children and One Life to Live. ( General Hospital stays.)

Story continues below advertisement

Hoover's vice-president of marketing, Brian Kirkendall, told fans of the soaps on the company's Facebook page that his mom and wife follow both shows religiously, and that Hoover is "150 per cent committed to doing what matters most to you."

As a result, that Facebook page is now loaded with comments from Susan Lucci lovers (she has played Erica Kane for about four decades on All My Children) congratulating and thanking the company for its support, and pledging to buy its products. One woman said she kissed her vacuum cleaner.

"I want you to know from me personally that we hear you loud and clear," Mr. Kirkendall said in his note to "our loyal ABC soap fans.

"My wife and mother are both passionate viewers of All My Children and One Life to Live, as are many of my colleagues here at Hoover. We were and are as disappointed with this news as you are.

"In fact, we will discontinue our advertising with ABC this Friday, 4/22. We're making every attempt to pull our spots from these programs sooner," he said.

"Because we feel that's not enough, we also want to help get your voice heard with ABC. So, we've set up a special email address,, to help pull together the mass emotional outpouring of support for our beloved ABC soaps and get it to our contacts at ABC. Please, send your emails to us at, and we'll get every, single last one of them to ABC."

ABC is replacing the shows with new ones aimed at a younger audience.

Story continues below advertisement

Panel wants changes to TMX deal An all-party committee of the Ontario legislature wants the architects of a transatlantic deal between the Toronto and London stock exchanges to give shareholders of TMX Group Inc. an equal number of board seats.

The panel released its report today, recommending changes to address concerns that the transaction is not in Canada's best interests because majority control of the combined entity would reside outside this country, The Globe and Mail's Karen Howlett reports.

The concern is that the centre of gravity would move to London, Gerry Phillips, chairman of the committee, told the legislature.

Inflation surges Canada's annual inflation rate surged in March to 3.3 per cent, far more than expected and the fastest pace since September 2008, The Globe and Mail's Tavia Grant reports today.

That's up from 2.2 per cent in February, driven by sharply higher energy costs and, to a lesser extent, food prices. But even removing energy from the mix, consumer prices would still be up 2.4 per cent from a year ago, notably above the Bank of Canada's 2-per-cent target, Statistics Canada reported. Month over month, prices rose 0.8 per cent.

The central bank, which last week projected that inflation would indeed hit the 3-per-cent mark this quarter, is guided by the so-called core rate of inflation, which strips out volatile items such as energy. That rate climbed to 1.7 per cent from just 0.9 per cent.

Story continues below advertisement

"The broad-based price surge in March was much higher than expected right across the board, and raises some serious questions over just how much slack is left in the Canadian economy and just how much of a dampener the Canadian dollar really is on prices," said Douglas Porter, deputy chief economist at BMO Nesbitt Burns.

Consumers, of course, don't live by core prices. Here's the damage:

  • Energy prices climbed 12.8 per cent on an annual basis, gasoline almost 19 per cent.
  • Prices of food bought from stores rose 3.7 per cent, the fastest since August 2009. Overall food prices climbed 3.3 per cent, fresh vegetables by 18.6 per cent. Food prices have now increased for four straight months.
  • Shelter costs climbed 2.4 per cent.
  • Health and personal care products rose 2.6 per cent.
  • Costs for clothes and shoes jumped 0.9 per cent.

Some economists are still betting the Bank of Canada will hike rates in July, not sooner.

"The Bank of Canada must be feeling a little hot under the collar," said Emanuella Enenajor of CIBC World Markets.

"The data are surprising, and while it's only one month, they suggest that core inflationary pressures are finally catching up on the booming economic recovery in Canada," she added. "Although today's data raise the chance of a rate hike at the next Bank of Canada meeting, the BoC is likely to wait until July, not jumping the gun on monetary tightening due to one data point."

The inflation "shocker," said RBC Dominion Securities strategists Mark Chandler and Kam Bath, is hard for the Bank of Canada to ignore.

"We see good reason for the BoC to change its bias statement as soon as the May meeting and continue to expect the first 25-basis-point hike to come in July," they said.

The unexpectedly higher inflation reading, and expecations for rate hikes, helped push up the Canadian dollar , noted Scotia Capital currency strategist Camilla Sutton.

"The BoC has sounded fairly cautious on tighter policy with a strong [Canadian dollar] however after today's inflation print it is clear that temporary effects that were subduing inflation are coming out of base effects and inflationary pressures in Canada are building," Ms. Sutton said.

(If you want to drown your sorrows, take some solace in the fact that booze prices were flat on the year, and actually down by 0.7 per cent from a month earlier.)

Do we need a new acronym for PIGS? Strategists at Brockhouse Cooper pose this interesting question today: Is the U.S. the new Greece?

Here's what Pierre Lapointe and Alex Bellefleur said in the wake of yesterdays decision by Standard & Poor's to downgrade its outlook on the United States:

"Fiscal austerity of about 5 per cent of GDP is needed in order to restore the sustainability of its debt-to-GDP ratio. This is not inconsequential and will provide a headwind to the U.S. economy some time down the road. Whereas we initially thought austerity would be delayed until after the next federal election, we think the negative outlook from S&P might provide impetus for the current administration to front-load some austerity measures. The warning will increase the need for the current President to bolster his credentials as a responsible fiscal manager."

And here's what they said about Greece as fears of a default mount, despite the country's pledge that it won't seek a debt restructuring:

"Our view all along on the European debt crisis has been that Greece will restructure and apply a 50-per-cent haircut to the present value of its bonds outstanding. In our view, it remains in Greece's interest to implement as many austerity measures as possible before defaulting. Pushing through tough austerity measures before defaulting will improve Greece's post-default structural budget position and accelerate its return to the capital markets."

"In a world where governments in the U.S. and Europe are challenged by significant fiscal problems, investors should favour countries with solid public balance sheets and robust economic growth," they said.

"In our opinion, this means Asia-Pacific countries such as Korea, Taiwan and Australia as well as emerging countries such as Brazil and Russia. Canada is also in better fiscal shape than the U.S. and in our view is a better way of obtaining North American exposure."

Gold hits the mark Gold today topped the $1,500 (U.S.) an ounce mark for the first time before retreating on the Comex.

Analysts believe bullion, which reached $1,500.50, still has farther to go. Ed Sollbach at Desjardins, for example, projected earlier this month that bullion will hit $1,620 ounce this year, front-loaded in the year because of the "extraordinary liquidity" from the Federal Reserve's QE2 program and the needs of Japan after its devastation

"Investors are shocked and flocking to gold as the downgrade threw a cold blanket over the dollar," Lim Chae Myung of Hyundai Futures Co. told Bloomberg News. "The bullish trend becomes pronounced as more and more people get out of the dollar to buy hard assets."

Added James Steel, chief commodities analyst with HSBC in an interview with Reuters: "It's follow-through buying from yesterday after the market had absorbed an initial bout of profit-taking. The recovery of oil prices and the euro have combined to take gold to the $1,500 level."

Teck stock climbs Shares of Teck Resources Ltd. climbed today after the Vancouver-based miner posted a first-quarter profit of $450-million and analysts projected an even better showing later this year on higher coal prices.

As The Globe and Mail's David Ebner reports, the price of metallurgical coal is rising because of the extended impact of severe floods this year in Australia, the world's top exporter. Major producers such as Rio Tinto PLC have pushed through price increases of roughly 50 per cent for the second quarter compared with the first.

"We anticipate improved earnings from coal in the second quarter," Teck chief executive officer Don Lindsay said yesterday as the company posted its results.

Corporate tax cuts and jobs In our ongoing series, The Globe and Mail today takes an in-depth look at how cuts to corporate taxes affect job creation. Several observers responded by saying such tax cuts aren't about job creation, they're about things like productivity and the quality of jobs. Actually, they are about jobs, for now anyway. That's because Stephen Harper, who says the key in this election is the economy, says so. This is direct from the Conservative Party platform:

A re-elected Stephen Harper Government will not raise taxes on Canadian consumers and families, and we will not raise the tax rate on the businesses that create jobs for Canadians. We will stay the course with our low-tax plan for jobs and growth. We will keep helping create jobs, through:

  • training - providing skills training for Canadians who are out of work;
  • trade - expanding opportunities for Canadian businesses in the world's fastest-growing markets; and
  • low taxes - keeping taxes low, to allow businesses to invest, expand, and hire more workers.

RBC down on lumber RBC Dominion Securities has downgraded the stocks of several forestry companies, given a drop in lumber prices and the impact of the stronger loonie.

Those companies included Canfor Corp. , Interfor Ltd. and West Fraser Timber Co. .

All three were downgraded to "underpeform" by analyst Paul Quinn.

Goldman beats Street Goldman Sachs Group Inc. topped analysts expectations today, though with a drop in first-quarter profit.

Profit slipped to $2.74-billion (U.S.) or $1.56 a share, but still well above forecasts of 82 cents. And had the Wall Street giant not had to pay back a hefty sum to Warren Buffet, its per-share earnings would be $4.38.

"Generally improving market and economic conditions, coupled with our strong client franchise, produced solid results," said chief executive officer Lloyd Blankfein. "Looking ahead, we continue to see encouraging indications for economic activity globally."

J&J boosts guidance Consumer products giant Johnson & Johnson today boosted its outlook for the year, buoyed by a lower U.S. dollar and new products.

J&J earned $3.5-billion (U.S.) in the first quarter, or $1.25 a share, and forecast per-share earnings this year of $4.90 to $5. Sales climbed 3.5 per cent to $16.2-billion.

In Economy Lab today

Increased border security in the wake of the Sept. 11 attacks may be only a minor irritant in the context of a single border crossing, but a small cost multiplied by a large number of crossings can still end up being a very big number, Stephen Gordon writes.

In Personal Finance today

Rob Carrick explains what prospective home buyers need to consider about affordability.

Parents keen to improve their kids' financial literacy are tapping into a new, tough-love approach: If they want that allowance, they're going to have to get a job, create a budget, and maybe even sign a contract, Dianne Nice reports.

Versatile and ingenious, trusts can provide for education, split income and support children from previous marriages, Dianne Maley writes.

From today's Report on Business

Report an error
As of December 20, 2017, we have temporarily removed commenting from our articles. We hope to have this resolved by the end of January 2018. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to If you want to write a letter to the editor, please forward to