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CN Rail lowers 2024 earnings forecast due to strike uncertainty

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Canadian National Railway Co. lowered its forecast for earnings growth Tuesday as it faces the threat of a worker strike.

The Montreal-based railway, which earned $1.11 billion in the second quarter, said it is seeing international customers route shipments away from Canadian ports in the face of continued labour uncertainty at the company.

CN is awaiting a decision from the Canada Industrial Relations Board on whether some shipments would be considered essential services in the event of a strike by the Teamsters Canada Rail Conference, the union that represents CN’s engineers and conductors. Though no strike or lockout can take place until at least 72 hours after that decision is made — a decision the company expects on or about Aug. 9 — the situation is casting a cloud over CN’s business.

“The prolonged nature of this process, which prior to the CIRB referral was to conclude in May, is impacting our customers, and it is impacting our business — particularly in (the area of) international intermodal where customers have taken actions to reroute vessels away from Canadian ports until the labour question has been resolved,” said CEO Tracy Robinson on a conference call with analysts Tuesday.

Robinson said the company’s second quarter was “challenging.” She added CN’s volumes were tracking well ahead of plan until May, when contract talks between Canada’s largest railway and the union got bogged down.

“Starting late May we saw a sharp reduction primarily in our international volumes on concerns of a work stoppage,” Robinson said. “This is volume destined to the U.S. that has shifted to U.S. ports. So we have lighter volumes in the third quarter than expected.”

In June, the Teamsters rejected an offer from CN to enter into binding arbitration, a development that raised the risk of a strike. Then-labour minister Seamus O’Regan, who recently announced his resignation from cabinet, asked the CIRB to address the question of whether some shipments would continue as essential services in the event of a strike or lockout.

CN said Tuesday it does not expect the situation to escalate to a full-fledged strike or lockout, and its revised forecast makes the assumption that the current traffic diversions do not increase.

Still, the company said it is lowering its forecasted adjusted earnings per share growth for the year to the mid- to high-single-digit range, compared to an earlier forecast that predicted earnings-per-share growth of approximately 10 per cent.

Robinson said CN expects to have more certainty on the labour front after the CIRB issues its decision. She said the company’s position on a collective agreement with its engineers and conductors has not changed in recent months — it is still looking to create a structure around work scheduling that would improve crew availability in light of new federal rules around mandatory work and rest rules for critical railway employees.

The Teamsters have said CN is trying to squeeze more availability out of its train crews as a way to compensate for labour shortages. The union has said the railway’s proposal would see workers required to move across the country for months at a time to fill labour shortages in remote areas of Canada.

CN said Tuesday its net income for the quarter was five per cent lower than the $1.17 billion in the same three months of 2023.

On an adjusted basis, the company said it earned $1.17 billion in the second quarter of 2024, or $1.84 per share compared with $1.76 per share in the prior year’s quarter.

The railway reported revenues of $4.33 billion, a seven per cent increase year-over-year.

Its operating ratio, a key measure of railway efficiency where a smaller number is better, increased from 60.6 to 64 per cent year-over-year.

CN’s share price declined by $2.59, or 1.54 per cent, to close at $165.35 on Tuesday.

This report by The Canadian Press was first published July 23, 2024.

Companies in this story: (TSX:CNR)

The Canadian Press. All rights reserved.

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Gould calls Poilievre a ‘fraudster’ over his carbon price warning

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OTTAWA – Liberal House leader Karina Gould lambasted Conservative Leader Pierre Poilievre as a “fraudster” this morning after he said the federal carbon price is going to cause a “nuclear winter.”

Gould was speaking just before the House of Commons is set to reopen following the summer break.

“What I heard yesterday from Mr. Poilievre was so over the top, so irresponsible, so immature, and something that only a fraudster would do,” she said from Parliament Hill.

On Sunday Poilievre said increasing the carbon price will cause a “nuclear winter,” painting a dystopian picture of people starving and freezing because they can’t afford food or heat due the carbon price.

He said the Liberals’ obsession with carbon pricing is “an existential threat to our economy and our way of life.”

The carbon price currently adds about 17.6 cents to every litre of gasoline, but that cost is offset by carbon rebates mailed to Canadians every three months. The Parliamentary Budget Office provided analysis that showed eight in 10 households receive more from the rebates than they pay in carbon pricing, though the office also warned that long-term economic effects could harm jobs and wage growth.

Gould accused Poilievre of ignoring the rebates, and refusing to tell Canadians how he would make life more affordable while battling climate change. The Liberals have also accused the Conservatives of dismissing the expertise of more than 200 economists who wrote a letter earlier this year describing the carbon price as the least expensive, most efficient way to lower emissions.

Poilievre is pushing for the other opposition parties to vote the government down and trigger what he calls a “carbon tax election.”

The recent decision by the NDP to break its political pact with the government makes an early election more likely, but there does not seem to be an interest from either the Bloc Québécois or the NDP to have it happen immediately.

Poilievre intends to bring a non-confidence motion against the government as early as this week but would likely need both the Bloc and NDP to support it.

Gould said she has no “crystal ball” over when or how often Poilievre might try to bring down the government

“I know that the end of the supply and confidence agreement makes things a bit different, but really all it does is returns us to a normal minority parliament,” she said. “And that means that we will work case-by-case, legislation-by-legislation with whichever party wants to work with us. I have already been in touch with all of the House leaders in the opposition parties and my job now is to make Parliament work for Canadians.”

She also insisted the government has listened to the concerns raised by Canadians, and received the message when the Liberals lost a Toronto byelection in June in seat the party had held since 1997.

“We certainly got the message from Toronto-St. Paul’s and have spent the summer reflecting on what that means and are coming back to Parliament, I think, very clearly focused on ensuring that Canadians are at the centre of everything that we do moving forward,” she said.

The Liberals are bracing, however, for the possibility of another blow Monday night, in a tight race to hold a Montreal seat in a byelection there. Voters in LaSalle—Émard—Verdun are casting ballots today to replace former justice minister David Lametti, who was removed from cabinet in 2023 and resigned as an MP in January.

The Conservatives and NDP are also in a tight race in Elmwood-Transcona, a Winnipeg seat that has mostly been held by the NDP over the last several decades.

There are several key bills making their way through the legislative process, including the online harms act and the NDP-endorsed pharmacare bill, which is currently in the Senate.

This report by The Canadian Press was first published Sept. 16, 2024.

The Canadian Press. All rights reserved.



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Sebastian Coe among 7 IOC members to enter race to succeed Thomas Bach as president

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GENEVA (AP) — Two former Olympic champions are in the race to be the next IOC president. So is a prince of a Middle East kingdom and the son of a former president. The global leaders of cycling, gymnastics and skiing also are in play.

The International Olympic Committee published a list Monday of seven would-be candidates who are set to run for election in March to succeed outgoing president Thomas Bach for the next eight years.

Just one woman, IOC executive board member Kirsty Coventry from Zimbabwe, entered the contest to lead an organization that has had only male presidents in its 130-year history. Eight of those presidents were from Europe and one from the United States.

Coventry and Sebastian Coe are two-time gold medalists in swimming and running, respectively. Prince Feisal al Hussein of Jordan is also on the IOC board.

Juan Antonio Samaranch Jr. of Spain is one of the four IOC vice presidents, whose father was president for 21 years until 2001.

David Lappartient is the president of cycling’s governing body, Morinari Watanabe leads gymnastics, and Johan Eliasch is president of the International Ski and Snowboard Federation. Coe is the president of track’s World Athletics.

All seven met a deadline of Sunday to send a letter of intent to Bach, who must leave the post next year after reaching the maximum 12 years in office. Bach declined at the Paris Olympics last month to seek to change IOC rules in order to stay in office longer.

A formal candidate list should be confirmed in January, three months before the March 18-21 election meeting in Greece, near the site of Ancient Olympia.

Only IOC members are eligible to stand as candidates, with votes cast by the rest of the 111-strong membership of the Olympic body.

The IOC is one of the most exclusive clubs in world sports. Its members are drawn from European and Middle East royalty, leaders of international sports bodies, former and current Olympic athletes, politicians and diplomats plus industrialists, including some billionaires like Eliasch.

It makes for one of the most discreet and quirky election campaigns in world sports, with members prevented from publicly endorsing their pick.

Campaign limits on the candidates include a block on publishing videos, organizing public meetings and taking part in public debates. The IOC will organize a closed-door meeting for candidates to address voters in January in its home city Lausanne, Switzerland.

The IOC top job ideally calls for deep knowledge of managing sports, understanding athletes’ needs and nimble skills in global politics.

The president oversees an organization that earns billions of dollars in revenue from broadcasting and sponsor deals for the Olympic Games and employs hundreds of staff in Lausanne, Switzerland.

Coe has been widely considered the most qualified candidate. A two-time Olympic champion in the 1,500-meters, he was later an elected lawmaker in Britain in the 1990s, led the 2012 London Olympics organizing committee and has presided at World Athletics for nine years.

However, he has potential legal hurdles regarding his ability to serve a full eight-year mandate. The IOC has an age limit of 70 for members, while Coe will be 68 on election day. The rules allow for a special exemption to remain for four more years, but that would mean a six-year presidency unless those limits are changed.

Coventry, who turned 41 Monday, also has government experience as the appointed sports minister in Zimbabwe.

The only woman ever to stand as an IOC presidential candidate was Anita DeFrantz, a former Olympic rower from the United States. She was eliminated in the first round of voting in a five-candidate election in 2001, which was won by Jacques Rogge.

Lappartient also is president of France’s national Olympic body and has carried strong momentum from the Paris Summer Games. He leads a French Alps project that was picked to host the 2030 Winter Games and was picked by Bach to oversee a long-term project sealed in Paris that will see Saudi Arabia hosting the Esports Olympic Games through 2035.

Eliasch is perhaps the most surprising candidate after being elected as an IOC member in Paris less than two months ago. The Swedish-British owner of the Head sportswear brand got 17 “no” votes, a notably high number in Olympic politics.

___

AP Olympics:

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Ontario considers further expanding pharmacists’ scope to include more minor ailments

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TORONTO – Ontario is proposing to further expand pharmacists’ scope of practice by adding to the list of minor ailments they can assess, allowing them to administer more vaccines and order some lab tests.

But while pharmacists see the proposal as an overdue solution to easing the burden on other aspects of the health-care system by leaning more on their professional expertise, doctors are raising concerns.

The government in early 2023 granted pharmacists the ability to assess and treat 13 minor ailments, including pink eye, hemorrhoids and urinary tract infections. In the fall of that year six more were added to the list, including acne, canker sores and yeast infections.

Now, the government is proposing to expand the list to include sore throat, calluses and corns, mild headaches, shingles, minor sleep disorders, fungal nail infections, swimmers’ ear, head lice, nasal congestion, dandruff, ringworm, jock itch, warts and dry eye.

As well, the Ministry of Health is looking for feedback on what lab tests and point-of-care tests might be required for pharmacists to order and perform as part of assessing and treating those conditions.

The government is also considering funding pharmacists to administer tetanus, diphtheria, pertussis, pneumococcal, shingles and RSV vaccines for adults, in addition to COVID-19 and flu vaccines. The province is proposing to allow pharmacy technicians to administer the same vaccines as pharmacists.

“Our government is focused on improving access to care in communities across the province and we have seen the success of our minor ailment program, connecting over 1 million people to treatment for minor ailments,” Hannah Jensen, a spokesperson for Health Minister Sylvia Jones, wrote in a statement.

Justin Bates, CEO of the Ontario Pharmacists Association, said the minor ailments program has been going well so far, and further expanding pharmacists’ scope can help avoid visits to family doctors and emergency rooms.

“We want to build health-care capacity through looking at pharmacies as a health-care hub and the pharmacists’ trusted relationship with their patients and to leverage that, because they are underutilized when it comes to what scope they can do,” he said.

But doctors are pushing back on the scope expansions.

“The bottom line here is that pharmacists are not doctors,” said Dr. Dominik Nowak, president of the Ontario Medical Association. “Doctors are trained for years and thousands of hours to diagnose and treat conditions.”

Nowak said that sometimes the symptoms that would seem to suggest one of those minor ailments are really a sign of a more serious condition, and it takes a doctor to recognize that.

“When I look at a lot of the minor ailments list, I think to myself, there’s nothing minor about many of these,” Nowak said.

“Many of these ailments rely on the patient … one, knowing the diagnosis themselves, so the patient’s own opinion. And last I heard, most of my patients haven’t been to medical school. And then two: it also relies on the patient’s own opinion about whether this is something minor or something serious.”

Bates said he has been “disappointed” at some of the messaging from doctors, and added that any notion that there is an increased risk to patient safety is “misinformation.”

“I want to support OMA and primary care, and I do – in hiring more doctors, solving some of their issues – but it shouldn’t come at the expense of other health professions gaining their … appropriate scope of practice,” he said.

“So it’s not a zero sum game here. We want to have physicians be comfortable with this, but … the way that some of these doctors are responding, it’s almost like hysteria.”

The government’s proposal on its regulatory registry is open for comment until Oct. 20.

This report by The Canadian Press was first published Sept. 16, 2024.



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