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Air Canada should face more consequences after two disruptions in a week, consumer advocate says



An airline consumer advocate says Air Canada should face tougher consequences for stranding passengers after two disruptions in a week.

Gábor Lukács, president of Air Passenger Rights, said Canadian airlines such as Air Canada currently don’t face enough consequences from the government each time they delay or cancel a flight.

“It feels like the airlines just have a free pass,” Lukasc told in an interview Friday.

Air Canada’s operations were jolted not once but twice in a span of seven days, impacting over 670 flights combined. On May 25, 241 Air Canada flights were delayed, and 19 were cancelled. This past Thursday, 362 flights were delayed and 48 cancelled, according to tracking service

Air Canada said the recently implemented system used to communicate with aircraft and monitor the performance of its operations was having technical problems.

In a statement to yesterday, the airline confirmed that both incidents occurred in the same system but were unrelated.

Currently, a traveller is entitled to between $125 and $1,000 in compensation for delays up to three hours or more, unless the disruption is a result of events beyond the airline’s control.

However, Lukács said he believes Air Canada is gatekeeping what really happened so they don’t have to pay passengers compensation.

“I’m confident that this is within the airline’s control,” Lukasc said.

The federal government has plans to strengthen the Air Passenger Protection Regulations. The proposed policy amendments would increase the maximum penalty for airline violations to $250,000, and hold airlines to regulatory costs of complaints.

Air Canada said no one was available for an interview on Friday.

By Friday afternoon, the Montreal-based airline told through an email statement the communicator system was stabilized and “it is functioning normally.”

However, “due to the effects of Thursday’s IT issues on our schedule, some flights may be delayed this morning as we reposition aircraft and crew,” Air Canada said.

There were 164 Air Canada flights, or 30 per cent of the airline’s scheduled load, had been delayed Friday as of 6:00 p.m. EDT, along with 36 cancellations, as seen on FlightAware.

Additionally, Air Canada Rouge had 62 flights delayed and 25 cancellations.

“That’s absurd, especially for a massive huge airline like Air Canada,” said Lukács.

A spokesperson for Transport Minister Omar Alghabra said the ministry has been in touch with Air Canada since the situation began, but did not confirm whether the airline could face any consequences, including fines.

“We expect all air carriers, including Air Canada, to uphold their obligations to keep passengers safe and protect their rights, and ensure all delays and cancellations are mitigated as soon as possible,” Alghabra’s office said in an email statement sent to on Friday.



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Hamilton steelmaker Stelco sold to Cleveland-Cliffs for $3.4B



Hamilton-based steelmaker Stelco Holdings Inc. is set to be acquired by U.S.-based Cleveland-Cliffs Inc. for $3.4 billion Cdn.

Stelco said it has agreed to sell all issued and outstanding common shares for $70 per share to the Ohio-based steel producer.

Stelco chief executive Alan Kestenbaum said he is confident Cleveland-Cliffs will remain a reliable supplier to its customers while maintaining Stelco’s “stature and reputation in Canada and maintaining our Canadian national interests.”

Profile of a man
Alan Kestenbaum is the CEO and executive chairman of Stelco. (Bedrock Industries)

Currently, Stelco maintains two major steelmaking facilities in Ontario — one each in Hamilton and Nanticoke.

CBC Hamilton reached out to Stelco for an interview. However, the company said no one was available for comment.

Stelco said in a news release that as part of the agreement, it will keep its headquarters in Hamilton and build on its existing 1,000-employee footprint in Canada. It will also retain Canadian representation on its management team.

The news release also said Cleveland-Cliffs will continue Stelco’s current community commitments, including collaboration with McMaster University and the CanmetMATERIALS research centre, and maintain the existing research chairs with McMaster. The company will also retain its partnership with the Hamilton Tiger-Cats and Forge FC, and its 40 per cent equity interest and the master lease of Tim Hortons Field.

Getting Nanticoke ‘the real gem,’ expert says

Kestenbaum acquired Stelco in 2016 after the company went into creditor protection in 2004 and was sold as a subsidiary to U.S. Steel Co. in 2007. It then returned to creditor protection in 2014 before signing an agreement to be acquired by Kestenbaum’s Bedrock Industries in late 2016.

Cleveland-Cliffs president and CEO Lourenco Goncalves said Kestenbaum was able to turn an “underperforming asset under previous ownership into a very cost-efficient and profit-oriented company.”

He said the deal “keeps national interests at the forefront and recognizes the importance of the workforce,” noting Stelco respects the union representing its workers, “treats their employees well and leans into their cost advantages.”

Profile of a man
Marvin Ryder is a marketing and business professor at McMaster University in Hamilton. (McMaster University)

Marvin Ryder, an associate professor of marketing and entrepreneurship at the DeGroote School of Business at McMaster University, said one of the likely reasons for the purchase of the company is to acquire Stelco’s plant in Nanticoke, which he said is a modern and efficient steelmaking operation.

“If I was interested in buying the former Stelco, it wouldn’t be for what it had in Hamilton, it would be for what it had down the road in Nanticoke… In many ways I would have called it the crown jewel of the Stelco operations,” he said.

In a news release, Cleveland-Cliffs said the transaction is expected to close in the fourth quarter of 2024, subject to approval by Stelco shareholders, receipt of regulatory approvals and satisfaction of other customary closing conditions.

Ryder said Stelco’s operation will be business as usual once the sale closes later in the year.

However, he said things could change a few years later. One possibility he sees is that instead of making steel at Nanticoke and transporting it to Hamilton for value-added finishing, the company could consolidate its operations at the Nanticoke site.

“I suspect they’ll keep [the finishing operations in Hamilton] at least for a while. But the real gem that they were acquiring wasn’t really the Hamilton operations, it was the Nanticoke operations,” he said.



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Corus Entertainment faces debt problem as it warns about company’s future



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The Corus logo at Corus Quay in Toronto on June 22, 2018.Tijana Martin/The Canadian Press

Corus Entertainment Inc. CJR-B-T has barely six weeks to ensure its survival.

Toronto-based Corus, which owns Global News as well as dozens of television and radio stations across Canada, has until Sept. 1 to negotiate some form of debt relief with its lenders. Otherwise, the company warned Monday, Corus may no longer be able to meet its debt commitments, which “may cast significant doubt about the company’s ability to continue as a going concern.”

Despite aggressive cost-cutting efforts – primarily cutting roughly 800 jobs or about 25 per cent of its total work force by the end of next month – analysts fear less spending will not be enough to offset major drops in revenue. The company reported $331.8-million in third-quarter revenue on Monday, a nearly 17-per-cent drop from the same period in 2023.

The company generated $18-million in cash during the third quarter, representing a 29-per-cent year-over-year decline. On an adjusted per-share basis, Corus lost 10 cents in the quarter, a stark reversal from the nine-cent-per-share adjusted profit the company reported for the third quarter of 2023.

“Management will need to come out with a much more aggressive cost-cutting drive in order to remain onside” with its lenders, Bank of Nova Scotia analyst Maher Yaghi said in a Monday morning note to clients. “We expect Corus to push further deep cuts in order to protect the balance sheet.”

Meanwhile, most of the company’s more than $1-billion in debt is due for repayment within the next few years. Corus has $290-million in bank debt set to reach maturity in 2027 and $500-million in bonds due the following year.

Starting Sept. 1, its debt agreements require Corus to maintain a maximum debt-to-EBITDA ratio of 4.25, meaning total debt cannot exceed 4.25 times its annual operating income. The company is currently allowed to hold up to the equivalent of 4.5 times its annual operating income in debt.

In a conference call with analysts on Monday morning, John Gossling, the company’s chief financial officer and co-chief executive officer, acknowledged “things are very tight and we are going to have to deal with it.” He said the company exceeded the 4.25 ratio by the end of its third quarter, putting it on a course to default, though he did not specify the exact size of the disparity.

In a note to clients published Monday afternoon, TD Cowen analysts Vince Valentini and Natale Puccia said the company’s debt-to-EBITDA ratio was likely to exceed 6.0 by the end of its 2025 fiscal year.

“We do not view this as a sustainable capital structure, so we expect the company to pursue a negotiated recapitalization with its banks and bondholders in the near-term,” the analysts wrote.

Corus was already struggling with declining revenues when it was informed last month that Warner Bros. Discovery Inc. would not renew the company’s Canadian rights to five popular specialty channels – including HGTV and Food Network – when its current deal expires at the end of this year. Corus rival Rogers Communications Inc. said at the time that it had won the rights to take over those channels starting in 2025.

Troy Reeb, a former Global News journalist who was previously the company’s executive vice-president of broadcast networks before being appointed co-CEO last month, told analysts on the Monday morning call that “misconceptions have emerged” since the Warner Bros. Discovery announcement.

Corus will continue to hold the rights to the Canadian content featured on the Warner channels that will be going to Rogers, Mr. Reeb said. In HGTV Canada’s latest broadcast year, for example, he said 12 of the top 20 shows were Canadian originals like Property Brothers “and all of them will be staying right where they are with Corus.”

“Our rebranding plans for these channels are progressing quickly and we expect to provide full details in the coming months,” Mr. Reeb said. “There is plenty of great food and home content out there in the international market that does not come from Warner Bros. Discovery.”

The TD Cowen analysts, Mr. Valentini and Ms. Puccia, also cut their rating on Corus stock to sell from hold and slashed their price target from 35 cents per share to just five cents per share. They calculate Corus will have an enterprise value of roughly $790-million by the end of 2025, well below the $1.077-billion in debt the company is still expected to hold at that time.

“It is possible that equity holders could end up with zero,” they said. “But we have assumed the Board (including Shaw family influence) will negotiate for a token ~1% of this enterprise value to remain with common shareholders.”

The Shaw family, which sold their namesake cable and internet provider to Rogers for $20-billion last year, holds a class of Corus shares granting them roughly 86-per-cent voting control of the company.



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LCBO reverses plan to open select stores on Friday as strike continues



The LCBO has reversed its plan to open select stores on Friday as retail workers continue to strike across the province, according to a statement from the Crown corporation on Sunday.

The alcohol retailer had initially announced that it would open 32 of its stores on July 19, but that they’d only be open on Fridays, Saturdays, and Sundays with “limited hours in effect,” even if a deal had not been reached.

However, the LCBO said on Sunday it has made an operational change as a result of its success in fulfilling online orders within a week and is re-allocating employees that they had planned to assign to the select retail stores.

More than 9,000 LCBO employees went on strike, closing 669 locations across Ontario, on July 5.

This is the second time the LCBO has scrapped plans to temporarily reopen stores. On Monday, the LCBO walked back on its plan to open five stores to allow bar and restaurant owners to buy alcohol after the Crown corporation said the union threatened to picket these locations.

“This pivot means that we will be able to improve how we serve Ontario bars and restaurants to help increase product selection, availability, and expedited delivery,” the LCBO said in its statement.

CTV News Toronto reached out to the Ontario Public Service Employees Union (OPSEU) for a response on the LCBO’s statement on Sunday afternoon.

The union representing striking workers has said the primary point of contention at the bargaining table is the Ford government’s expansion of alcohol sales in the province, which will see beer, wine, and ready-to-drink beverages available in some convenience stores at the end of the summer.

“We want this strike to end, remain committed to reaching an agreement with OPSEU, and encourage them to respond to our fair offer,” the LCBO said in a statement.


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