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Business Briefing Lululemon suggests it could quit Canada over temporary foreign worker rules

Briefing highlights

  • Lululemon suggests it could quit Canada
  • Bombardier cutting 7,500 jobs
  • BAT proposes buying rest of Reynolds
  • Canadian inflation edges up
  • Lululemon warns on TFW rules

    Lululemon Athletica Inc. suggests it could quit Canada because of the restrictions of the Temporary Foreign Worker Program.

    “Our industry’s lifeline in Vancouver depends on attracting and quickly onboarding top global talent,” Lululemon, one of Canada’s best-known brands, said in a submission to a federal government committee.

    “We are requesting that these current constraints be modified to allow us to continue on our aggressive growth plans from within Canada,” it added in its summer brief to the Standing Committee on Human Resources, Skills and Social Development and the Status of Persons with Disabilities.

    The committee’s recently released report made several recommendations, finding “that there are specific areas of concern that need to be addressed to better ensure the TFW Program functions in an effective manner that is not only responsive to labour market needs but that also fully respects the fundamental rights of those who use it.”

    Lululemon has been talking to the federal and provincial governments for some time about immigration programs and the company's ability to attract key employees faster.

    Lululemon’s chief executive officer, Laurent Potdevin, said Friday the company is committed to Canada.

    “As a company firmly rooted in Vancouver for 18 years, we are proud of our Canadian heritage and deeply committed to remaining here for the long term,” he said in a statement.

    Like some other companies, notably those that are small businesses, Lululemon said there are huge problems with the program.

    And with 3,300 Canadian employees, more than 1,000 of them at the Vancouver head office, it warned that the business is under threat in this country because of the rules.

    “In order to continue to grow as a Canadian success story, we require - and will require - top experienced global talent,” it said.

    “Despite our investments in training and education, including partnerships with post-secondary institutions, Canada simply does not produce enough skilled, specialized workers to meet our demand. Our assessment of the effectiveness of the TFW program is that it is not able to effectively and efficiently meet our industry’s labour market requirements.”

    Lululemon wants its industry to have an exemption from the Employer Transition Plan's labour market impact assessment, similar to that under which certain other groups operate.

    “Exemptions have already been granted to the film industry, Canadian universities, and Microsoft, who are no longer required to conduct a labour market test for each application or create an individual transition plan,” the company said, citing instances of foreign employees who must wait several months, or “an entire business cycle,” which translates to lost opportunities for Lululemon, Vancouver, British Columbia and Canada.

    “Two-year transition plans that are specific to each application are not feasible for high-skilled roles for global companies that are experiencing high growth,” Lululemon said, adding it has already gone “above and beyond” those plans.

    “We should not face restrictions in hiring those who do not fit within the prescribed transition plans. Such policy is illogical and counter to economic interests and sound business practices.”

    Bombardier cuts deep

    Bombardier Inc. is cutting another 7,500 jobs as the Canadian plane and train maker tries to rebuild profit amid deepening concern about production delays for its flagship C Series airliner and tough competition bearing down on its rail business, The Globe and Mail’s Nicolas Van Praet reports.

    The cuts represent about 10 per cent of its current global work force.

    The reductions are expected to cut across Bombardier’s different business lines, from aerospace to train building, with the rail unit bearing two-thirds of the hit. Roughly 2,000 jobs are expected to be cut in Canada.

    BAT proposes swallowing Reynolds

    British American Tobacco PLC put a spark in the cigarette market with a bid to buy the rest of Reynolds American Inc.

    BAT already owns 42.2 per cent of the company, and is offering to buy the rest in cash and stock it said valued the company at $56.50 (U.S.) a share. That was before markets opened.

    The proposed deal, worth $47-billion, sent related stocks higher.

    “It is another effort within the tobacco industry to consolidate in the face of slowing demand in developed markets,” said CMC Markets analyst Jasper Lawler.

    “It’s no coincidence that the merger comes just months after the U.K instituted plain packaging rules for cigarette packets,” he added.

    “BAT’s large stake in Reynolds meant this merger was always on the cards. Low interest rates won’t last forever so BAT’s chief executive Nicandro Durante has decided now was the time to make the move and take advantage of cheap financing.”

    Inflation edges up

    Inflation in Canada is on the rise. Or on the decline if you strip out gas pump prices.

    The annual pace of inflation rose in September to 1.3 per cent from August’s 1.1 per cent. But if gas is excluded, it’s down to 1.5 per cent from 1.7 per cent, respectively, according to the latest reading from Statistics Canada.

    The agency also reported that retail sales dipped 0.1 per cent in August, largely on lower sales of autos and parts, and general merchandise.

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