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Airlines lure Canadians to buy tickets for flights that will never take off – CBC.ca

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Rob Przybylski and Courtney Ross were slated to wrap up the month on a Costa Rican beach, sipping sugarcane cocktails with friends and family as they celebrated their wedding.

Instead, the Oshawa, Ont., duo say they and their 84 guests are out more than $216,000 after their Sunwing Airlines vacation package was cancelled due to the COVID-19 pandemic.

“They have basically told us that refunds are not an option,” said Przybylski, 35.

Like most Canadian airlines, Sunwing does not reimburse passengers for flights cancelled by the airline, instead offering travel vouchers valid for two years.

The couple’s original booking in April had been called off by the carrier as the virus shut down global air travel. Their destination, a Planet Hollywood resort on the Pacific Ocean, offered a refund, but Sunwing did not, Przybylski said. So they rebooked the trip for Nov. 27.

Sunwing cancelled the second flight last month, he said.

“We have 80 people that are out money, and a lot of them aren’t working now,” including his fiancée for much of this year, Przybylski said.

“My mom is the perfect example. She hasn’t travelled in 30 years. What is she going to do with a credit?”

‘Bait and switch’

Despite minuscule travel demand, Canadian airlines continue to schedule tens of thousands of flights per month, only to cancel the vast majority of them several weeks before takeoff.

The approach can leave passengers with a drastically changed itinerary or no flight at all, giving them little choice but to accept vouchers they may never use.

Rob Przybylski and Courtney Ross and their wedding guests can’t get refunded the $216,000 they spent on their destination wedding. (THE CANADIAN PRESS)

Air Canada cut more than 27,000 flights, or 70 per cent, from its November schedule between Sept. 25 and Oct. 9, according to figures from aviation data firm Cirium. It cut another 2,000 by the end of October.

WestJet, which recently began to offer refunds for cancelled flights, in contrast to its competitors, slashed its November schedule by about 12,400 flights, or 68 per cent, in one week last month. Air Transat scrapped 63 per cent of its flights for November in the same week, leaving it with 123 — down to 100 as of last week.

Comparable schedule cuts occurred in October and September.

“It’s called bait and switch,” said John Gradek, a lecturer at McGill University and head of its Global Aviation Leadership program.

The strategy is a response to a shift in customer behaviour, an attempt to woo wary travellers with ample flight options before drastically undersold seats prompt a scheduling cull.

“The industry cross their fingers and hope people buy, that they all of a sudden get this insane urge to fly,” Gradek said, calling the practice “deceptive.”

“‘Cynical’ is probably too light of a word,” he said. “It borders on the edge of misleading advertising, that you’re promoting and offering for sale stuff that you know there’s a high probability will not be what you’re actually offering to the customer.”

Carriers deny there is anything untoward about recent schedule gutting.

“Airline schedules have always been subject to change,” Air Canada spokesperson Peter Fitzpatrick said in an email, noting the company has had to cut capacity by more than 90 per cent since March.

“Overall, our schedule continues to operate as planned, and for any customers affected by changes we do provide advance notice and offer options.”

“We do our best to avoid cancelling flights at the last minute,” said Transat spokesperson Christophe Hennebelle.

Sunwing and WestJet did not respond immediately to questions.

Minister of Transport Marc Garneau says the situation is ‘complicated.’ (Adrian Wyld/The Canadian Press)

Transport Minister Marc Garneau called the situation “complicated,” saying he sympathizes with customers.

“I encourage the airlines to repay passengers if they can. At the same time, some of those airlines are in deep difficulty in terms of their own ability to continue to function if they were having to provide refunds to all of the customers.”

Air Canada held on to more than $2.4 billion in advance ticket sales as of July 31, a hefty sum to return after its revenues dropped 95 per cent year over year in its second quarter.

Travellers have a right to reimbursement for a service that was paid for but never rendered, regardless of airlines’ financial woes, say opposition MPs and consumer advocates.

The Conservatives, NDP and Bloc Quebecois have demanded refund requirements as a condition of any aid package to the industry.

Bloc Leader Yves-François Blanchet said Friday the government is “behaving like a branch of Air Canada.”

“The minister of transport for seven months, since the beginning of the crisis, has essentially shrugged his shoulders any time the need for passenger reimbursement has come up,” NDP transport critic Niki Ashton said in an interview.

The Canadian Transportation Agency said in March that airlines can issue travel credit instead of refunds for cancelled trips in the “current context,” though the agency later clarified that the online statement was “not a binding decision” and that reimbursements depend in part on the contract between airline and passenger.

European and U.S. authorities have demanded airlines reimburse travellers, on top of the strings attached to aid that range from limiting dividends and executive bonuses to cutting carbon emissions and carving out ownership stakes for government.

Back in Oshawa, far from the sands of a Costa Rican resort, Rob Przybylski took stock.

“I know I’m not the only one in this situation. The biggest thing for me is to get my money back for my guests.”

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Canada’s M&A boom fuels hiring spree, higher pay

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Record-breaking dealmaking in Canada is encouraging investment banks to beef up staffing, but the increased demand for bankers is forcing some to pay up in unique ways to attract new hires.

Canadian mergers and acquisitions (M&A) year to date surged to a record $206.5 billion and IPOs hit an all-time high of $5.6 billion, according to Refinitiv, after the pandemic crushed dealmaking in the first three quarters of 2020.

HSBC, JPMorgan Chase & Co and National Bank of Canada are expanding their M&A teams.

“It continues to be an active market with lots of active discussions with clients going on as well, and so that has absolutely spurred on a need to fortify the ranks within the teams,” said Scott Lampard, head of global banking for HSBC Bank Canada.

HSBC plans to boost overall investment banking headcount by 20%-25%, mainly at the analyst level to support pitching and executing deals, Lampard said.

PENT-UP DEMAND

With the pace of transaction expected to continue at pace, banks are paying more to hire and retain existing teams, offering a range of new services, like sending in a consultant to create the ideal home office, recruiters say.

“We’ve been doing this for nearly 20 years and we’ve never seen a market like this,” said Bill Vlaad, CEO at recruitment firm Vlaad and Company. “Everybody is scrambling,”

“Many of the banks have increased base salaries quite dramatically, mostly in 2021,” he said, adding salaries had increased 20%-40% across M&A roles.

“Now if you want to attract, you have to put something else on the table.”

To poach talent, banks are adding signing bonuses, extra vacation days, healthcare increases, special programs for mental wellness and home office perks, all tailored to individual requests, Vlaad said.

TD Securities, Barclays, CIBC World Markets are the top M&A advisers year to date. All three declined to comment on hiring plans.

Of the top deals announced this year, Rogers Communications Inc’s C$20 billion ($16.2 billion) bid for Shaw Communications Inc and Canadian National’s bid $33.6 billion offer for Kansas City Southern are the two biggest.

Despite the pandemic, five of the top six Canadian banks paid an average of C$3.1 billion ($2.50 billion) in total bonuses last year, up from C$2.9 billion ($2.34 billion) in 2019, an analysis of filings by Reuters showed.

Headcount at National Bank Finance will be up by four or five people in M&A versus the same time last year, David Savard, head of M&A at the bank, told Reuters.

That put the team at 28 for the large-cap M&A team and 10 for the mid-market team, he said, adding both areas were “booming”.

“There seems to be some pent-up demand for entrepreneurial-led companies and private companies doing M&A coming out of COVID,” he said.

David Rawlings, CEO for JPMorgan Canada, agreed headcount would be likely higher in the near future.

“We think activity will continue to be strong and are currently looking to selectively hire with a particular focus on senior diverse candidates,” said Rawlings.

($1 = 1.2453 Canadian dollars)

(Reporting by Maiya Keidan; Editing by Denny Thomas and Lisa Shumaker)

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French court overturns ruling saying sale of cannabidiol is illegal

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France’s highest appeals court on Wednesday overturned a ruling that stores in the country can’t legally sell cannabidiol (CBD), a non-psychotic compound related to cannabis that is being researched for a variety of medical applications.

Based on the free trade of goods within the European Union, the Cour de cassation ruled that judges could not find the sale of CBD in France illegal if it had been legally produced in a member state of the bloc.

The Court of Justice of the EU ruled last year that no national law can prohibit the sale of CBD legally produced in a member state, the French court also said.

“Without considering whether the substances seized had not been legally produced in another member state of the European Union, the court failed to provide a basis for its decision,” it said, referring to a ruling of a lower appeals court.

The Cour de cassation did not rule whether selling CBD in France was legal or not, and ordered a lower court to rule again on a case involving the owner of a shop selling CBD.

“We are happy”, CBD shop owner Mathieu Bensa, who was not involved in the case, told Reuters after the ruling.

“We did not understand why France was the last country in the European Union that had not given access to the sale of hemp plants”, he said.

Derived mainly from the hemp plant, CBD is increasingly used as a relaxant.

Cannabis stocks have attracted growing interest on world stock markets, particularly on the Toronto stock exchange after Canada became one of the first major economies to legalise the recreational use of marijuana.

Cannabis use is outlawed in France but the country has one of Europe’s highest consumption rates.

(Reporting by Matthieu Protard, Benoit Van Overstraeten and Ardee Napolitano; Editing by Mark Potter)

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Canada Energy Regulator allows resumption of Trans Mountain oil project

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The Canada Energy Regulator (CER) has issued a notice https://bit.ly/35Sm87H allowing Trans Mountain Corp to resume work on its Trans Mountain Expansion (TMX) oil pipeline project.

The company was ordered in April to halt work on a section of the project in Burnaby, British Columbia, for four months to protect hummingbird nests.

The C$12.6 billion ($10.17 billion) TMX project will nearly triple capacity of the pipeline, which runs from Edmonton in Alberta to the coast of British Columbia, to ship 890,000 barrels per day of crude and refined products when completed late 2022.

(Reporting by Arpan Varghese in Bengaluru; Editing by David Goodman)

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