(Reuters) – Bombardier Inc said on Thursday it would halt Learjet aircraft production and slash about 1,600 jobs this year as it becomes a pure-play business jet maker, after reporting an adjusted loss before interest and taxes for the fourth quarter due to the coronavirus pandemic.
After flagging likely layoffs in November, Montreal-based Bombardier announced further cost-cutting efforts to generate $400 million in recurring savings by 2023 and improve earnings this year while increasing its aftermarket business.
“We view 2021 as a transition year,” Chief Executive Éric Martel told analysts.
The layoffs include 800 people in Canada, mostly in Quebec, and 250 in Wichita where Learjet is made, Martel later told reporters.
Bombardier, which had previously planned to break even on free cash flow in 2020, now expects to turn cash flow-positive between 2021 and 2023.
The company’s shares were down 11% to C$0.65 per share in midday Toronto trading.
Bombardier has shed assets in recent years, transforming itself from plane and train maker to business jet manufacturer, to restore profitability and cut debt after facing a cash crunch in 2015.
In 2021, the company expects business jet deliveries in line with 2020, modest revenue growth, and adjusted EBITDA of more than $500 million, as it winds down production of the low-selling Learjet later in the year to focus on more profitable Challenger and Global jet models.
Analysts on average estimated 2021 adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) to be $661.3 million, according to Refinitiv IBES data.
Ahead of its March 4 investor day, Bombardier cited cost improvements on the Global 7500 jet and its growing service business as key earnings drivers.
Bombardier reported a 19.7% fall in business jet deliveries to 114 in 2020, in line with industry trends. But 2020 revenues from corporate aircraft activities rose 3%, helped by year-end deliveries of Global 7500 jets and a rebound in demand.
Bombardier reported 2020 free cash-flow usage from continuing operations of $1.9 billion, but expects to reduce cash burn in 2021 to better than $500 million.
The company said it now has pro forma cash and cash equivalents of about $5.4 billion, including proceeds from the sale of its transportation unit, and a pro forma net debt of about $4.7 billion.
Bombardier reported an adjusted loss before interest and taxes of $165 million for the quarter ended Dec. 31, compared with a profit of $168 million a year earlier.
(Reporting by Shreyasee Raj in Bengaluru and Allison Lampert in Montreal; Editing by Alexandra Hudson, Jonathan Oatis and Bernadette Baum)
Bank of Canada warns buyers of 'early signs' of overheating in housing market – CBC.ca
Despite early signs of overheating in Canada’s housing market, Bank of Canada Governor Tiff Macklem so far has no plans to raise interest rates until the economy and employment are back on track following the slump caused by COVID-19.
Speaking remotely to the combined Calgary and Edmonton chambers of commerce on Tuesday, Canada’s top central banker said that the economy would continue to need monetary stimulus, likely until 2023, even though there are already signs it could be distorting the residential real estate market.
“In that low-for-long world, there are risks that housing could get carried away, so that is something we will be looking at very carefully,” Macklem said in response to a question from a member of the remote audience.
Some observers have already expressed worries that the Canadian housing market is rising at an unsustainable pace, leaving critics — including some in the real estate industry — nervous of a boom, followed by a devastating bust once interest rates finally start to rise.
Women and youth hardest hit
But while Macklem also expressed concern, he said that even though the bank predicts the economy will begin to surge by the end of this year, high unemployment among Canada’s most vulnerable groups means the economy will continue to need a helping hand.
“Because women and youth hold so many of the jobs in the hardest-hit sectors, they have borne a disproportionate share of the job losses,” Macklem told his audience, and he said that many of the jobs that have disappeared will not come back.
Already, long-term unemployment — measured as people who want to work but have not found a job in more than 26 weeks — is currently holding at more than half a million people, a level not seen in the economy in 30 years. Macklem said failure to get those people into jobs will lead to what he called “labour market scarring.” In other words, it would result in permanent damage to the Canadian workforce.
He suggested that while the bank is holding rates at rock-bottom levels, in return employers in his audience need to contribute by helping to train the types of employees they needed. That applied especially in the digital economy.
WATCH | COVID-19’s unequal economic recession in Canada:
Low-wage jobs were hit the hardest. Not only did technology-related employment not fall as far, but the demand for tech workers has bounced back to levels higher than before the COVID-19 pandemic struck. And he said that employers must help create their own workforce in an economy that is increasingly digital and automated.
“Technology is no longer a sector,” Macklem said. “It’s every sector.”
But he said that rebuilding the workforce and the economy in that new form will be a process of months and years, and he reiterated that there is little fear of inflation and thus rate hikes because there remains plenty of slack in the economy.
Beware ‘extrapolative expectations’
But just as low rates have led to increased borrowing by businesses that has helped spur expansion and share prices, low mortgage rates have made it easier for prospective homeowners to bid up the price of houses.
So far, Macklem said, the move toward bigger houses further away from city centres has not been speculation so much as the need for more working — and learning — space for employees who no longer have to commute to the office. Part of the evidence for that is that larger, more distant homes are rising in value, whereas inner-city properties are attracting fewer buyers and renters.
But there are signs that the practical motivation for rising prices may be changing to the kind of speculative frenzy seen in 2016 and 2017 that the government tried to quell with tax measures and stress tests some of which were relaxed last year.
“What we get worried about is when we start to see extrapolative expectations, when we start to see people expecting the kind of unsustainable price rises we’ve seen recently go on indefinitely, and they’re basing their decision on those kinds of assumptions,” he warned.
And while he did not describe what kind of actions he would take to stimulate jobs without overstimulating housing, Macklem said the bank would keep a close eye on the housing market and think about how to contain a housing bubble that could lead to future trouble.
“When we see people starting to buy houses solely because they think prices are going to go up, that is a warning sign for us,” he told the audience. “We are starting to see some early signs of excess exuberance.”
Follow Don Pittis on Twitter: @don_pittis
What a 3rd wave of COVID-19 could look like in Canada — and how we can avoid it – CBC.ca
COVID-19 levels are declining from the devastating peaks of the second wave across much of Canada, but experts say the threat of more contagious coronavirus variants threatens to jeopardize our ability to prevent a third wave.
Canada has close to 850 confirmed cases of the variants first identified in the U.K., South Africa and Brazil, with at least six provinces now reporting community transmission — meaning there’s probably a lot more spreading beneath the surface than we know.
But as variant cases increase, overall COVID-19 numbers have dropped steadily in Canada, with just over 31,000 active cases across the country, about 2,900 new cases per week and 54 cases daily.
“Overall, we’re still doing well,” Dr. Theresa Tam, Canada’s chief public health officer, said during a news conference on Tuesday. “But things could change rapidly.”
So, is Canada destined for a third wave? Or will we be able to adequately respond to the threat of variants spreading across the country to avoid one altogether?
Parts of the country that have seen notable declines in cases have recently moved to reopen non-essential businesses and lift lockdowns in the face of fast-spreading variants, despite public health officials cautioning against doing so.
WATCH | Federal modelling warns COVID-19 cases will rise with variants:
Is a 3rd wave in Canada inevitable?
Much like the first and second waves of the pandemic in Canada, the situation varies greatly across the country for a number of different reasons — ranging from geographic and demographic to political.
But even provinces and territories that have had fewer COVID-19 cases are still at high risk of devastating outbreaks, overwhelmed health-care systems and severe outcomes for vulnerable populations if variants spread rapidly.
Tam said Newfoundland and Labrador is a cautionary tale for the rest of Canada, where an outbreak of the variant first identified in the U.K., also known as B117, led to a spike in new cases in the community during a time when public health measures were “less stringent.”
“Provincial health authorities knew something was different when cases escalated over a matter of days, even before laboratory evidence confirmed the presence of the B117 variant,” she said.
Dr. Isaac Bogoch, an infectious disease physician and scientist with Toronto General Hospital, said variants have made it hard for anyone to predict the likelihood of a bad third wave of the pandemic in Canada with any degree of confidence.
“When you factor in variants of concern and you factor in not enough immunity in the population to protect ourselves, it’s clear that a third wave is certainly a possibility,” he said. “But I wouldn’t say it’s an inevitability.”
Bogoch said the likelihood of a third wave depends on how Canadians respond to the loosening of restrictions and the increase in opportunities to mingle together and get into situations where the virus can more easily be transmitted.
“It also completely depends on how the provincial governments and the public health authorities choose to reopen their provinces and their ability to rapidly react to a rise in cases,” said Bogoch, a member of Ontario’s COVID-19 vaccine distribution task force.
“It doesn’t mean you have to stay locked down until everyone is vaccinated. It just means that as places reopen, they have to be extremely careful, proceed very slowly and be able to rapidly pivot if there’s any indication that there are cases plateauing or rising.”
What is the likelihood of a 3rd wave in Canada?
Raywat Deonandan, a global health epidemiologist and an associate professor at the University of Ottawa, says that based on what we know right now, a third wave is “mathematically inevitable” in Canada because of three key factors.
The first is we know what third waves typically look like from previous pandemics, such as the 1918 Spanish Flu, which saw a brutal third wave during the winter and spring of 1919 — around the same point of the pandemic we’re in now.
Deonandan said societal behaviour is another factor that could lead to a more severe third wave if variants drive outbreaks as restrictions left and Canadians don’t strictly adhere to public health guidelines.
And the third factor is variants, which Deonandan said could be the driving “mechanism” for a devastating third wave in Canada given the extent to which they’ve already spread in recent weeks.
But he said the likelihood of a bad third wave could change with two major caveats.
“The first is: It is avoidable with sufficient public health response and precautionary action, but our history shows us that most governments are unwilling to do the hard public health response, and most populations are unwilling to tolerate that level of action,” he said.
“The second caveat is of course vaccination.”
But the catch is we may not be able to vaccinate enough of the population fast enough in Canada to adequately slow the spread of variants in time before they take over.
“It’s a race against time. We want to get the vaccines out there now, before variants get in,” said Dr. Anna Banerji, a physician and infectious disease specialist at the University of Toronto’s Dalla Lana School of Public Health.
“I really believe that we can get on top of this if we get people vaccinated and then make modifications to the vaccines as we need to.”
WATCH | How vaccines can keep up with coronavirus variants:
Banerji said even if Canada has a third wave, it likely won’t be as bad as previous waves because she feels Canadians have learned tough lessons in the pandemic — such as in December, when people gathered over the holidays and cases skyrocketed.
“People see that our individual actions have an impact on the outcome, and so I think while people may feel disempowered, they’re realizing that their behaviour really does count,” she said.
“Once we get the vaccines out, things will change and we’ll start opening things up. So I’m still optimistic for the future, even if there’s a lot of fear out there.”
How bad could a 3rd wave be in Canada?
Deonandan said that while Canada may not be able to completely “vaccinate our way out of a third wave,” it could look completely different than waves we’ve seen in the past.
“What might happen is that our third wave is very high in cases but not as high in deaths, because we have done a pretty good job in vaccinating our long-term care centres if nothing else, and that’s where a large proportion of our deaths come from,” he said.
“But hospitalizations might be a different matter.”
Dr. Sumon Chakrabarti, an infectious disease specialist at Trillium Health Partners in Mississauga, Ont., said once those at highest risk are vaccinated, including seniors living in the community and in long-term care, hospitalizations will likely decrease.
“But people are going to worry if we open up, we’re just going to get tons of cases,” he said. “Yes — but they’re not going to be severe.”
Chakrabarti said if Canada sees a smaller third wave, or “wavelet,” the health-care system might be able to “absorb” the impact of COVID-19 better than previous waves and avoid becoming completely overwhelmed.
South Africa recently saw a notable decline in COVID-19 cases despite the variant first identified there driving a spike in transmission, which could bode well for other countries hoping to control that variant from spreading.
But experts caution that a decline in cases could be short lived, as evidenced by countries hit hard by B117, such as Portugal, Spain, Ireland and the U.K., that later saw an even greater spike in cases driven by the variant.
“We know how to prevent this from happening. We have the tools that work, we know how to do this, we can prevent a third wave,” he said.
“There’s no reason to have a third wave. There’s no reason to have another lockdown. This is not related to the virus, and we have enough information about how this virus is transmitted. This is truly based on policy.”
Deonandan said while he agrees that a third wave could be prevented, he’s all but convinced Canada is destined to face one because of a lack of political will from parts of the country that are already pushing to reopen.
“It’s highly likely. I think we could do heroic things to avoid it, but we won’t,” he said.
“But what is uncertain is what the hospitalization and death toll of a third wave will be — it might not be as severe.”
Why all Canadian households will soon receive free postcards in the mail – CTV News
A new initiative by Canada Post wants to help Canadians reconnect with the ones they love.
The Crown corporation announced Tuesday that over the next few weeks it will deliver approximately 13.5 million free postcards, one to every residential address in the country.
The postcards are part of a campaign called “Write Here, Write Now,” which launched in September 2020 to encourage Canadians to write heartfelt letters to family and friends.
“Meaningful connection is vital for our emotional health, sense of community and overall well-being,” Doug Ettinger, president and CEO of Canada Post said in a statement. “Canada Post wants everyone to stay safe, but also stay in touch with the people who matter to them.”
The company says there are six versions of the free postcards, which offer messages of love, appreciation or thanks.
Each household will receive one randomly selected postcard, and recipients can send it to anyone they want within Canada, at no cost.
Postcards can be mailed through any mailbox or taken directly to a post office. Best of all, no stamps are required.
The company says the postcards will start arriving in mailboxes across the country on March 1.
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