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Bombardier sells regional jet business to Mitsubishi

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Bombardier sells

Bombardier Inc. (BBD.TO) will sell its regional jet division to Japan’s Mitsubishi Heavy Industries Ltd. for US$550 million, marking the company’s exit from the commercial airline space.” data-reactid=”15″>Bombardier Inc. (BBD.TO) will sell its regional jet division to Japan’s Mitsubishi Heavy Industries Ltd. for US$550 million, marking the company’s exit from the commercial airline space.

The Quebec-based plane and train maker announced Tuesday that it has entered a definitive agreement with Mitsubishi to sell its CRJ aircraft program for US$550 million, as well as an assumption of US$200 million in liabilities.

Bombardier’s chief executive Alain Bellemare said in a statement that the sale represents the completion of the company’s aerospace transformation – one that has seen the company ditch its costly efforts to compete in the commercial aviation space against giants such as Boeing Co. and Airbus SE.

“With our aerospace transformation now behind us, we have a clear path forward and a powerful vision for the future,” Bellemare said.

“Our focus is on two strong growth pillars: Bombardier Transportation, our global rail business, and Bombardier Aviation, a world-class business jet franchise with market-defining products and an unmatched customer experience.”

Bombardier, which is approaching the tail end of Bellemare’s turnaround plan, has been exiting the commercial aerospace segment over the last two years as it searches for sustainable growth and profitability. The CRJ – once representing the significant chunk of Bombardier’s revenues but now unprofitable – was the last remaining aircraft in its Commercial Aircraft division.

Bellemare, who joined Bombardier in 2015, is streamlining operations at the company to focus on its more profitable rail and private jet business, two areas he has said will create the most value for shareholders.

The first major divestment came in October 2017, when Airbus acquired a majority stake in the company’s beleaguered CSeries program. Since then, Bombardier has sold its Q400 program and announced that it is looking to sell its aerostructure businesses in Belfast and Morocco.” data-reactid=”22″>The first major divestment came in October 2017, when Airbus acquired a majority stake in the company’s beleaguered CSeries program. Since then, Bombardier has sold its Q400 program and announced that it is looking to sell its aerostructure businesses in Belfast and Morocco.

Bombardier has now transformed “from an aviation powerhouse to a much smaller and leaner player”, aviation analyst and Teal Group vice president Richard Aboulafia wrote in a note.

“New management, brought in after things got desperate in 2015, quickly realized that they were running a ship that had set a course for the nearest iceberg,” he wrote.

“Selling off much of the company is a drastic measure, but it’s hard to see any other course that could have saved Bombardier, and they deserve a lot of credit.”

RBC Capital Markets Walter Spracklin called the deal “the end of an era” in a note to clients Tuesday.

“The net proceeds to BBD of $150MM is roughly in line with our expectations, and has no significant impact on our estimates, but overall we expect the deal to be a modest positive for valuation as the deal marks progress for the company towards its transformation strategy,” Spracklin wrote.

Altacorp Capital analyst Chris Murray wrote in a note Tuesday that he expects that the company’s aerostructures business will likely be the next divestment.

“We believe the next asset to be sold will be the company’s aerostructures unit as the company continues to refine its business lines to business aircraft and transportation,” Murray wrote Tuesday.

The CRJ deal will see Mitsubishi take over maintenance, support, refurbishment, marketing and sales for the aircraft, which includes its operations in Montreal, Toronto, as well as service centres in West Virginia and Arizona. The deal is expected to close in the first half of 2020.

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All passengers safe as Montreal-bound Air Transat flight makes emergency stop in Paris

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More than 300 passengers resumed their journey to Montreal Sunday after their Air Transat flight from Italy had to make an emergency landing in France.

The airline says flight TS571 took off from Venice Saturday but had to make an emergency stop at Paris-Charles de Gaulle airport due to a technical problem with a floor heating panel.

Spokeswoman Debbie Cabana says the landing went smoothly and the health of the passengers was not compromised.

The 310 passengers spent the night in Paris and departed for Montreal Sunday morning in a different aircraft.

Cabana says the passengers will be eligible for compensation.

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2 Stocks to Help You Canadians Retire Wealthy

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Young Canadian investors are facing retirement challenges.

Why?

Finding a good full-time job right out of college or university is not as easy as it was 20 years ago, as companies are less willing to spend the time and money to train people and prefer to hire more workers on contract. The gig economy has also expanded, meaning that more people are effectively self-employed, with no benefits.

When a full-time opportunity emerges, the benefits can vary significantly. Defined-benefit pension plans are becoming rare, and while defined-contribution plans can be generous, they shift risk from the company to the employee, as the payouts on retirement depend on the performance of the fund.

This is forcing Canadians to take more control of their retirement planning.

One popular strategy is to own top dividend stocks inside a self-directed RRSP and use the distributions to buy additional shares. Over time, the compounding process can create a substantial retirement fund and you can use the contributions to reduce your taxable income today.

Let’s take a look at two stocks that might be interesting RRSP picks right now.

Nutrien

Nutrien is the planet’s largest supplier of potash. It’s also a leading provider of nitrogen and phosphate. These commodities are all essential crop nutrients used by farmers to improve food production on their land.

Wholesale potash orders are negotiated each year with countries worldwide. China and India often set the bar for prices based on the agreements they secure with Nutrien’s marketing company Canpotex, and its competitors. Potash prices have improved in the past two years after experiencing an extended downturn.

Demand and global shipments are increasing, a trend that’s expected to continue as the world population is forecast to grow nearly 30% in the next 30 years.

Nutrien also has a retail division that sells seed and crop protection products to farmers. The business is growing through strategic acquisitions and Nutrien is investing in the development of digital solutions to help its customers manage their overall operations.

The fertilizer market undergo through periods of volatility, as has occurred in 2019 with record rainfall during the U.S. planting season affecting orders, but the long-term outlook for Nutrien is positive.

The company raised the dividend twice in the past year and the stock appears oversold today. Investors who buy now can pick up a 3.7% yield.

Bank of Nova Scotia

Bank of Nova Scotia (TSX:BNS)(NYSE:BNS) has invested billions of dollars over the past decade to build a large business in Latin America.

The primary focus is on the Pacific Alliance countries of Mexico, Chile, Peru, and Colombia. The trade bloc allows the free movement of capital, goods, and labour among the members and provides an opportunity for Bank of Nova Scotia to capture business from both companies and consumers.

Firms that enter new markets require cash management services and Bank of Nova Scotia’s presence in all four of the core Pacific Alliance countries should give it an advantage. In addition, demand for loans and investment products will expand with the growing middle class.

Bank of Nova Scotia recently raised its dividend. The current payout provides a yield of 4.75%.

Is one more attractive?

Nutrien and Bank of Nova Scotia should both be solid buy-and-hold picks for a self-directed RRSP.

If you only buy one, I would probably make Nutrien the first choice right now. The stock appears oversold and the market might be underestimating the company’s potential to generate significant free cash flow when prices increase.

This tiny TSX stock could be the next Shopify

One little-known Canadian IPO has doubled in value in a matter of months, and renowned Canadian stock picker Iain Butler sees a potential millionaire-maker in waiting…

Because he thinks this fast-growing company looks a lot like Shopify, a stock Iain officially recommended 3 years ago – before it skyrocketed by 1,211%!

Iain and his team just published a detailed report on this tiny TSX stock. Find out how you can access the NEXT Shopify today!


Fool contributor Andrew Walker owns shares of Nutrien. Nutrien and Bank of Nova Scotia are recommendations of Stock Advisor Canada.

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Street checks banned in Nova Scotia

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Nova Scotia’s justice minister says he will permanently ban street checks after a legal opinion co-authored by a former top judge found the Halifax police practice, which disproportionately targeted black males, is illegal.

“The decision that I’ve come to, based on a number of contributing factors, is we will move to make the moratorium to a permanent ban on street checks,” Justice Minister Mark Furey said Friday.

“It’s reasonable that any Nova Scotian is treated with respect and professionalism.”

Furey’s announcement comes after Michael MacDonald, a former chief justice of the Nova Scotia Court of Appeal, and Jennifer Taylor, a research lawyer, analyzed the controversial police practice of logging information about people they interacted with or observed.

They wrote in a review released Friday that street checks are not reasonably necessary for police to execute their duties.

“We have concluded that the common law does not empower the police to conduct street checks, because they are not reasonably necessary. They are therefore illegal,” the review says.

The practice came under the spotlight because of a CBC News investigation. That triggered a formal review by criminologist Scot Wortley that revealed black people were street checked at a rate six times higher than white people in Halifax.

‘Interfere with individual liberty’

The Nova Scotia Human Rights Commission called on MacDonald to offer a legal opinion on street checks, which are different from another controversial practice known as carding.

Friday’s report says street checks are when an officer interacts with or observes someone, and then records personal or identifying information into a database.

“The Wortley report confirms that street checks interfere with individual liberty, and disproportionately affect Black Nova Scotians,” wrote MacDonald and Taylor.

They say street checks are not authorized under the Nova Scotia Police Act, and they also put an individual’s privacy rights in question.

Their review says under the Charter of Rights and Freedoms, Canadians have the right to simply walk down the street or spend time in public spaces anonymously. When police document those moments, they’re no longer private.

In April, Furey ordered a moratorium on random street checks.

“We are not aware of the police having any difficulty executing their duties during this time, without the ability to record street checks,” wrote MacDonald and Taylor.

‘Nobody believed us’

MacDonald and Taylor say police still have other tools available, including the ability to gather information at traffic stops or police inquiries into suspicious activity.

“If the police are legitimately concerned for someone’s personal health or safety, that would be an appropriate reason to stop them and ask some questions.”

For Lake Echo resident DeRico Symonds, who organized a large march against street checks in March, the announcement is “a huge win” that’s long overdue.

“The black community was saying, ‘This affected us.’ Nobody believed us. Then it took another white male to validate that,” he said, noting both MacDonald and Wortley are white.

“That it took this amount of effort is absolutely disappointing,” he said. “If folks don’t get their driveway shoveled in Halifax, it’s an uproar, it’s immediate action.”

‘Larger systemic issue’

Symonds intentionally put the hood of his jacket up while doing an interview with CBC News to pay homage to those who have been the target of street checks for wearing a hood.

“We have to look at the larger systemic issue,” he said of ongoing racism.

It’s a comment mirrored by the justice minister.

Furey said since the April moratorium, he’s had many meetings with members of the African-Nova Scotian community. Youth, in particular, are passionate about making change, he said.

“This is about systemic racism in Nova Scotia. We’ll have another continued discussion around that.”

Furey said Friday he will immediately tell police in the Halifax Regional Municipality that the ban is now permanent.

“I anticipate we’ll have continued co-operation,” he said of Halifax Regional Police and RCMP. “Street checks based on race are unacceptable.”

Furey said he hasn’t actually read the report, and was basing his comments on two briefings about its contents. He said he will spend the weekend reading the 92-page review himself.

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