New federal support for Canada’s pandemic-battered airline industry will be contingent on carriers providing refunds to passengers whose flights were cancelled, the government announced on Sunday.
Transport Minister Marc Garneau laid out the requirement as he announced that Ottawa is ready to respond to the sector’s desperate pleas for federal assistance by launching talks later this week.
Canada’s commercial airlines have been hit hard by COVID-19, with passenger levels down as much as 90 per cent thanks to a combination of travel restrictions and fear of catching the illness.
That has prompted airlines to furlough hundreds of pilots and technicians and discontinue dozens of regional routes since March. They have also cancelled numerous pre-booked trips, offering passengers credits or vouchers instead of refunds.
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Many Canadians have since expressed anger over not getting their money back. The Canadian Transportation Agency received 8,000 complaints between mid-March and the end of August, most of which are believed to be related to refunds.
3:01 Canadian government says conversations ongoing with airlines, exploring ‘all options’
Canadian government says conversations ongoing with airlines, exploring ‘all options’ – Oct 22, 2020
Passengers have also filed a handful of proposed class-action lawsuits and three petitions garnering more than 100,000 signatures that call for customer reimbursement.
Garneau acknowledged the challenges facing the sector as he revealed the pending talks.
“The air sector cannot respond to these challenges on its own, given the unprecedented impacts on its operations,” Garneau said in a statement.
“We are ready to establish a process with major airlines regarding financial assistance which could include loans and potentially other support to secure important results for Canadians,” he added. “We anticipate beginning discussions with them this week.”
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Yet Garneau also made clear what the government would be demanding from airlines, starting with refunds of what is believed to be millions of dollars in pre-paid flight tickets and a curb on cancelled routes.
“Before we spend one penny of taxpayer money on airlines, we will ensure Canadians get their refunds,” he said. “We will ensure Canadians and regional communities retain air connections to the rest of Canada.”
2:46 WestJet to refund some passengers whose flights were cancelled due to COVID-19
WestJet to refund some passengers whose flights were cancelled due to COVID-19 – Oct 22, 2020
It was not immediately clear whether that would include pushing Air Canada and others to resume dozens of routes that are currently suspended.
The tough words around refunds were cautiously welcomed Sunday as a good first step by Canadian Automobile Association vice-president Ian Jack, whose organization is one of the largest retailers of vacations and leisure travel in Canada.
“It’s the starter pistol, but it’s by no means a fait accompli,” Jack said. “We’ll be watching these negotiations closely. There is now a concrete, on-the-record commitment from the government that we expect them to honour.”
In contrast to Canadian authorities, the European Commission and the U.S. Department of Transportation have required airlines to refund passengers for cancelled flights.
6:06 Airports in Atlantic Canada “Decimated” by Airline Cuts
Airports in Atlantic Canada “Decimated” by Airline Cuts – Oct 16, 2020
The U.S. and European countries including France and Germany have also offered billions in financial relief to struggling carriers. Ottawa has provided no industry-specific bailout to airlines.
The pandemic has devastated the airline industry, with billions of dollars in losses for Canadian carriers amid grounded flights and tight international borders.
Canadian airline revenues in 2020 will fall by $14.6 billion or 43 per cent from last year, according to estimates in May from the International Air Transport Association.
The National Airlines Council of Canada, which represents major airlines, said it was encouraged by the news that Ottawa is looking to work with carriers and help “stabilize” the industry.
“The pandemic has had a devastating impact on airlines, our employees, on regional service and the communities we serve across the country. Airlines are struggling to remain viable because of the economic chaos crated by COVID-19,” President and CEO Mike McNaney said in a statement.
“All measures have been taken to reduce costs, and revenue has fallen beyond the means of even the most extreme cost cutting measures to address. The industry will not recover without strong federal leadership.”
TOKYO (AP) — Japanese technology group SoftBank swung back to profitability in the July-September quarter, boosted by positive results in its Vision Fund investments.
Tokyo-based SoftBank Group Corp. reported Tuesday a fiscal second quarter profit of nearly 1.18 trillion yen ($7.7 billion), compared with a 931 billion yen loss in the year-earlier period.
Quarterly sales edged up about 6% to nearly 1.77 trillion yen ($11.5 billion).
SoftBank credited income from royalties and licensing related to its holdings in Arm, a computer chip-designing company, whose business spans smartphones, data centers, networking equipment, automotive, consumer electronic devices, and AI applications.
The results were also helped by the absence of losses related to SoftBank’s investment in office-space sharing venture WeWork, which hit the previous fiscal year.
WeWork, which filed for Chapter 11 bankruptcy protection in 2023, emerged from Chapter 11 in June.
SoftBank has benefitted in recent months from rising share prices in some investment, such as U.S.-based e-commerce company Coupang, Chinese mobility provider DiDi Global and Bytedance, the Chinese developer of TikTok.
SoftBank’s financial results tend to swing wildly, partly because of its sprawling investment portfolio that includes search engine Yahoo, Chinese retailer Alibaba, and artificial intelligence company Nvidia.
SoftBank makes investments in a variety of companies that it groups together in a series of Vision Funds.
The company’s founder, Masayoshi Son, is a pioneer in technology investment in Japan. SoftBank Group does not give earnings forecasts.
Shopify Inc. executives brushed off concerns that incoming U.S. President Donald Trump will be a major detriment to many of the company’s merchants.
“There’s nothing in what we’ve heard from Trump, nor would there have been anything from (Democratic candidate) Kamala (Harris), which we think impacts the overall state of new business formation and entrepreneurship,” Shopify’s chief financial officer Jeff Hoffmeister told analysts on a call Tuesday.
“We still feel really good about all the merchants out there, all the entrepreneurs that want to start new businesses and that’s obviously not going to change with the administration.”
Hoffmeister’s comments come a week after Trump, a Republican businessman, trounced Harris in an election that will soon return him to the Oval Office.
On the campaign trail, he threatened to impose tariffs of 60 per cent on imports from China and roughly 10 per cent to 20 per cent on goods from all other countries.
If the president-elect makes good on the promise, many worry the cost of operating will soar for companies, including customers of Shopify, which sells e-commerce software to small businesses but also brands as big as Kylie Cosmetics and Victoria’s Secret.
These merchants may feel they have no choice but to pass on the increases to customers, perhaps sparking more inflation.
If Trump’s tariffs do come to fruition, Shopify’s president Harley Finkelstein pointed out China is “not a huge area” for Shopify.
However, “we can’t anticipate what every presidential administration is going to do,” he cautioned.
He likened the uncertainty facing the business community to the COVID-19 pandemic where Shopify had to help companies migrate online.
“Our job is no matter what comes the way of our merchants, we provide them with tools and service and support for them to navigate it really well,” he said.
Finkelstein was questioned about the forthcoming U.S. leadership change on a call meant to delve into Shopify’s latest earnings, which sent shares soaring 27 per cent to $158.63 shortly after Tuesday’s market open.
The Ottawa-based company, which keeps its books in U.S. dollars, reported US$828 million in net income for its third quarter, up from US$718 million in the same quarter last year, as its revenue rose 26 per cent.
Revenue for the period ended Sept. 30 totalled US$2.16 billion, up from US$1.71 billion a year earlier.
Subscription solutions revenue reached US$610 million, up from US$486 million in the same quarter last year.
Merchant solutions revenue amounted to US$1.55 billion, up from US$1.23 billion.
Shopify’s net income excluding the impact of equity investments totalled US$344 million for the quarter, up from US$173 million in the same quarter last year.
Daniel Chan, a TD Cowen analyst, said the results show Shopify has a leadership position in the e-commerce world and “a continued ability to gain market share.”
In its outlook for its fourth quarter of 2024, the company said it expects revenue to grow at a mid-to-high-twenties percentage rate on a year-over-year basis.
“Q4 guidance suggests Shopify will finish the year strong, with better-than-expected revenue growth and operating margin,” Chan pointed out in a note to investors.
This report by The Canadian Press was first published Nov. 12, 2024.
TORONTO – RioCan Real Estate Investment Trust says it has cut almost 10 per cent of its staff as it deals with a slowdown in the condo market and overall pushes for greater efficiency.
The company says the cuts, which amount to around 60 employees based on its last annual filing, will mean about $9 million in restructuring charges and should translate to about $8 million in annualized cash savings.
The job cuts come as RioCan and others scale back condo development plans as the market softens, but chief executive Jonathan Gitlin says the reductions were from a companywide efficiency effort.
RioCan says it doesn’t plan to start any new construction of mixed-use properties this year and well into 2025 as it adjusts to the shifting market demand.
The company reported a net income of $96.9 million in the third quarter, up from a loss of $73.5 million last year, as it saw a $159 million boost from a favourable change in the fair value of investment properties.
RioCan reported what it says is a record-breaking 97.8 per cent occupancy rate in the quarter including retail committed occupancy of 98.6 per cent.
This report by The Canadian Press was first published Nov. 12, 2024.
