A representative for the Bank of Montreal (BMO) is speaking publicly for the first time since an 12-year-old Indigenous girl and her grandfather were handcuffed while trying to open an account at the institution.
The incident, which touched off allegations of racial profiling, took place on Dec. 20, and saw Bella Bella man Maxwell Johnson, 56, and his granddaughter handcuffed by Vancouver police, after bank staff were “unable to validate” their government-issued ID.
LISTEN: CKNW’s Lynda Steele speaks with BMO executive Erminia Johannson
Erminia Johannson, group head of North American personal banking and U.S. business banking, spoke with Global News and CKNW on Thursday, after the bank announced a new Indigenous Advisory Council.
“We made a mistake here. Let’s be very clear. I want to make sure that is understood,” said Johannson.
“We are sad. We are broken ourselves in the sense of saying this should not have happened on our shift.”
But Johannson rejected the allegation that racism was in any way involved in the call to police reporting an alleged fraud.
“Our validation process identified a serious issue in the actual identification. This is where we should have stopped. I will keep repeating it and say our mistake was picking up the phone and calling the police,” she said.
“We set off a spark — I’ll use that language — that had unintended consequences that were extreme in this case. And we are heartfelt, sad, disappointed, embarrassed and apologetic on this situation.”
Attempt to open bank account ends in handcuffs for B.C. girl and grandfather
Johannson added BMO had conversations with “hundreds of Indigenous leaders, customers, employees” and conducted a review of what took place, and determined the incident “cannot be characterized” as racist.
Johnson told Global News that he provided Indian Status Cards, his own BMO bank card and a birth certificate, but that the teller told him “one or two numbers didn’t add up,” prior to the police being called.
Vancouver police have said they received a 911 call about a fraud in progress, identifying a South Asian man and 16-year-old girl as suspects.
Johannson did not answer directly when asked if there would be any repercussions for the employee or employees who phoned police, setting off the “spark.”
“Right now that employee is not in that branch as we speak,” she said.
“We’re all accountable for this. We’re taking action and we’re going to get this right.”
BMO demonstrators demand justice for B.C. Indigenous man and girl
Johannson said the bank has apologized to Johnson, but added BMO will have to “meet, talk, and do more than an apology.”
She also pointed to the bank’s new Indigenous Advisory Council, which includes eight Indigenous leaders from across Canada, as a commitment to review and improve BMO’s policies and work towards reconciliation.
Johnson, a member of the Heiltsuk Nation, declined an interview with Global News to comment on Johannson’s remarks. Instead he referred to his lawyer, who also declined comment.
In a statement, the Heiltsuk Nation said the appointment of the new council is “marred” by BMO’s continued denial that the incident involved racial profiling.
“Denying racism will not move us forward. This moves us backwards,” the nation said, adding it has yet to hear from BMO or the Indigenous Advisory Council.
“While today’s announcement would normally be a good first step, it’s hard to put weight on this advisory council because it has been assembled so quickly – it feels very much like a reactive gesture or public relations effort.”
The Heiltsuk Nation added Johnson would be commenting after the weekend.
Chief Patrick Michell of the Kanaka Bar Indian Band, the sole B.C. member of the new council, said he believes the body can have a positive effect.
“People are disappointed and angry about this and I don’t blame them. The Bank of Montreal has accepted responsibility for this and they’ve come up with a strategy moving forward,” he said.
“I’m looking at this incident, what happened — that’s yesterday. I’m more focused on making sure it doesn’t happen again tomorrow.”
Investigation ordered into handcuffing of grandfather and granddaughter
Michell said he wasn’t sure when the council would start its work, but that the first priority would be looking at the bank’s policies and practices.
He also said there were no plans as of yet to speak with Johnson or his granddaughter, but that he was open to the idea.
Johnson has previously indicated that he may file a human rights complaint over the incident.
British Columbia’s Office of the Police Complaints Commissioner has also ordered an investigation into the Vancouver police’s handling of the incident.
—With files from Srushti Gangdev
© 2020 Global News, a division of Corus Entertainment Inc.
Avoiding the stock market will likely hinder your retirement goals – BNNBloomberg.ca
News that stock markets are hitting new highs isn’t news at all. They’ve been hitting new highs for over a decade and before that they hit new highs. Over the long-term, they have always gone up.
All those highs can be problematic for long-term investors adhering to the ‘buy low, sell high’ principle, and sitting on the sidelines waiting for the next big market correction. Keeping a large chunk of savings in cash or fixed income is not an option for most Canadians who want to retire comfortably. Cash generates close to zero returns over time and two per cent is a stretch for safe, fixed-income investments like bonds.
Most retirement plans are based on an assumption that equity returns in the upper single digits will compound over time. That won’t happen for investors waiting for the lows to be low enough.
Being skittish about putting your retirement savings at risk is perfectly natural. Psychologists consider it a behavioural bias called loss aversion. Deep in the back of our minds, the pain of losing money is disproportionately stronger than the pleasure from gaining it, putting fear ahead of reason.
A recent study on loss aversion by Sun Life Financial attempted to quantify this bias in terms of dollars, by asking people how much they would need to gain in relation to the amount they would risk losing. The study found most respondents would not risk losing $100 if the potential gain was only $100. More agreed to take the risk as the potential gain increased. It found most investors would only risk the $100 if the potential gain was doubled.
Much of today’s loss-aversion sentiment could be rooted in the global market meltdown of 2008, which can also serve as a worst-case scenario since it was the worst financial collapse since the Great Depression of the 1930s. In both cases, losses were devastating, but markets eventually recovered and investors who overcame their fear and held steady recouped their losses.
Long-term charts of the benchmark S&P 500 and S&P/TSX composite index show steady gains in the decades before 2008. The S&P 500 lost half its value between October 2007 when the meltdown began and its March 2009 bottom. By October 2013, the S&P 500 topped its pre-meltdown high and has since doubled from there – as if the meltdown never even happened.
The plunge was much quicker and the recovery much slower for the TSX, which lost nearly half its value between June 2008 and February 2009. It wasn’t until June 2014 that the TSX topped its pre-meltdown high. It has since rallied an additional 20 per cent.
That’s not to say the next big correction won’t be tomorrow, but it’s a fact of life that most of us need to invest to retire comfortably and getting there usually requires taking a leap of faith in the equity markets. As the mandatory investment industry disclaimer says: “past returns are not an indication of future performance.” Investors cannot control the broader markets but there are hedging strategies that can help cushion the blows and outpace the highs, which are outlined below.
- Dollar cost averaging: Making regular contributions over time smooths out entry points in fluctuating markets. It allows investors to buy into stocks as they rise, and buy stocks that are down at a discount.
- Income-generating investments: Two per cent isn’t much of a return for fixed-income investments like bonds, but it does generate reliable returns in times of stock market volatility. Portfolios should have a fixed-income component that grows proportionally as the investor nears retirement and needs to withdraw cash. Stocks that pay reliable dividends are also a good source of income regardless of equity market conditions.
- Diversification: Spreading your equity investments among sectors and geographic regions can limit risk and open up your portfolio to opportunity. We often tend to look at stock markets as a whole but there are a lot of parts that move in different directions.
- Buying the best of the best: Most stocks get swept up in market advances and declines but the best ones tend to lose less on the downside and gain more on the upside. Finding the best stocks means doing your homework, getting professional investment advice – or both.
Payback Time is a weekly column by personal finance columnist Dale Jackson about how to prepare your finances for retirement. Have a question you want answered? Email email@example.com.
Bombardier's future in question after debt-reduction options being considered – Yahoo News Canada
The future of Bombardier Inc. is being called into question after the company said it was actively considering alternatives to reduce its staggering debt.
After exiting the commercial aircraft business, selling its aerostructures unit and unloading a large tract of land in Toronto, the company said it is working to reduce debt and “solve its capital structure.” Bombardier’s long-term debt stood at more than US$9 billion as of Dec. 31, 2018.
“We are actively pursuing alternatives that would allow us to accelerate our debt paydown. The objective is to position the business for long-term success with greater operating and financial flexibility,” it said in a news release Thursday that warned about weaker financial results for 2019.
What that means is unclear, says Walter Spracklin of RBC Capital Markets.
“What exactly this strategic alternative is constitutes the key ‘wild card’ in the Bombardier stock,” he wrote in a report, decreasing his target price by a third to $2.
“The stock reaction reflects the ever-mounting liquidity concerns, with many investors we talked to doubtful as to whether there is a solution.”
The company’s language suggests some urgency that can’t be resolved by just pushing out debt maturities, added Seth Seifman of JP Morgan.
“This suggests to us the potential to pursue strategic options, including a breakup and sale of all or part of the company,” he wrote. “It may include one or both of Bombardier’s two major businesses: bizjets and trains.”
Cameron Doerksen of National Bank Financial says aviation would be the most likely candidate for sale since transportation is a better stand-alone business.
“Our math shows that if Bombardier did sell its aviation segment and used the proceeds to de-lever and reacquire the Caisse de depot’s stake in Transportation, based on where pure-play rail equipment OEMs trade today, Bombardier shares could be worth $3.87,” he wrote. The pension fund manager holds a 30 per cent stake in Bombardier Transportation.
The Caisse declined to indicate if it is interested in purchasing more of the transportation unit, saying only that it supports “the continuing work of Bombardier Transportation’s management team to improve the subsidiary’s operating performance — including the actions taken to address certain legacy projects.”
Bombardier’s shares plunged 31.8 per cent to their lowest level in nearly four years following its release, which pointed to a possible withdrawal from a partnership with Airbus in the commercial aircraft previously called the C Series. The stock closed down 57 cents to $1.22 in heavy trading of 60.2 million shares on the Toronto Stock Exchange.
The financial miss is mainly due to actions taken to resolve challenging rail projects, the timing of milestone payments and new orders and the delivery of four business jets slipping into the first quarter of 2020, the company said.
It said it is reassessing its ongoing participation in the Airbus partnership about two years after giving up a controlling stake in the program to Europe-based Airbus SE.
Airbus owns 50.06 per cent of the joint venture, Bombardier 33.58 per cent and Quebec 16.36 per cent after injecting US$1 billion in 2016.
While the A220 program is gaining orders as it proves its value, additional cash will be required to support the ramp-up of production, a delay in reaching break-even and lower returns over the life of the program, it said in a preliminary announcement of its fourth-quarter and 2019 results set to be released Feb. 13.
“This may significantly impact the joint venture value,” Bombardier said, adding it will disclose any writedown next month.
Bombardier said it expects consolidated revenue for 2019 to total about US$15.8 billion and consolidated adjusted earnings before interest, taxes, depreciation and amortization of about US$830 million.
The company, which reports in U.S. dollars, had said in October it expected revenue between $16.5 billion and $17 billion for the year and adjusted earnings before interest, taxes, depreciation and amortization between $1.2 billion and $1.3 billion.
The company said it expects to earn zero adjusted EBITDA in the fourth quarter on about $4.2 billion in revenues with losses in transportation offset by earnings in aviation.
Consolidated free cash flow is expected to be around $1 billion in the fourth quarter, about $650 million lower than anticipated. However, the shortfall is expected to be recovered in 2020.
A total of 58 aircraft were delivered in the fourth quarter and 175 for the full year, including 11 Global 7500s.
Industry analysts called the financial warning negative with some cutting their price target for Bombardier’s shares.
“The key question is how much closer is the company to solving these issues, and what comfort can we get that new issues of similar scope and magnitude will not recur,” added Spracklin.
The operational issues of transportation and update on the A220 are disappointing, said Benoit Poirier of Desjardins Securities.
“Nevertheless, we note that the value of the A220 program is not currently reflected in Bombardier’s stock and therefore management’s decision to review its strategic options for the program should unlock value through deleveraging — even at a depressed valuation,” he wrote.
This report by The Canadian Press was first published Jan. 16, 2020.
Companies in this story: (TSX:BBD.B)
Ross Marowits, The Canadian Press
China's 2019 birthrate lowest in 70 years of communist rule – Al Jazeera English
China‘s birthrate dropped last year to its lowest level since the formation of the People’s Republic of China in 1949, adding to concerns of a long-term challenge for the government, as the ageing society and shrinking workforce pile pressure on a slowing economy.
To avoid a demographic crisis, the Communist government abolished the one-child policy in 2015 to allow people to have two children, but the change has not resulted in an increase in pregnancies.
In 2019, the birthrate stood at 10.48 per 1,000 people, down slightly from the year before, according to data from the National Bureau of Statistics (NBS) released on Friday.
The number of births has now fallen for three consecutive years. Still, there were 14.65 million babies born in 2019.
Many young couples in China are reluctant to have children because they cannot afford to pay for healthcare and education alongside expensive housing
Meanwhile, divorce rates are hitting records. In the first three quarters of 2019, about 3.1 million couples filed for divorce, compared with 7.1 million couples getting married, according to data from the Ministry of Civil Affairs.
Lowest number of births since 1961
He Yafu, an independent demographer based in southern Guangdong province, said the total number of births in 2019 was the lowest since 1961, the last year of a famine that left tens of millions dead. He said there were approximately 11.8 million births that year.
US-based academic Yi Fuxian, senior scientist at the University of Wisconsin-Madison, told the AFP news agency that even though China has abolished its one-child policy, there has been a shift in the mindset of the population, with people now used to smaller families.
According to official figures, China’s population stood at 1.4 billion by the end of 2019, increasing by 4.67 million from the year before.
But Fuxian believes that China’s population is over-estimated, and according to his work, the real population “began to decline in 2018”.
While China’s limit on family sizes could be removed altogether eventually, the demographer said citizens are still being punished for having three children, even though some areas have reduced punitive measures.
However, China has recently signalled that it might end limits on family size altogether. A draft of the new Civil Code, due to be introduced at the annual session of the rubber-stamp parliament in March, omits all mention of “family planning”.
‘Slow, long-term problem’
The one-child policy was introduced by former leader Deng Xiaoping to curb population growth and promote economic development, with exceptions for rural families whose first-born was a female, and for ethnic minorities.
The measure was mainly enforced through fines but was also notorious for forced abortions and sterilisations.
The result was dramatic: Fertility rates dropped from 5.9 births per woman in 1970 to about 1.6 in the late 1990s. The rate was below the level needed to replace the population – 2.1 births per woman.
The stagnated birthrate could pose a problem for the economy in the future, as the country’s workforce continued to shrink last year.
The NBS said 896.4 million people were of working age, between 16 and 59, in 2019, a drop from the 897.3 million in 2018.
This marks the eighth consecutive year of decline. The workforce is expected to decline by as much as 23 percent by 2050.
“The demographic problem is a slow, long-term one,” He told AFP.
“Because China’s education levels have been going up, in the short term, the population issue should not impact growth too much,” He told the news agency.
“But in the long run, if the trend continues, it would pose a huge drag on economic growth.”
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