Starting July 1, British Columbians could be paying more for goods they buy through online marketplaces such as Facebook and Amazon.
Rogers Communications Inc. will sell Freedom Mobile Inc. to Quebecor Inc. for $2.85 billion in a deal it hopes will appease federal regulators opposed to its proposed takeover of Shaw Communications Inc.
The deal comes after the antitrust regulator reiterated that it opposed Rogers’ plan to purchase Shaw, and is subject to approval by Canada’s competition watchdog and the federal department of Innovation, Science and Economic Development, the firms said.
It covers all of Freedom’s branded wireless and internet customers, infrastructure, spectrum and retail sites, they added in a statement.
Toronto-based Rogers made a $26-billion bid for Calgary-based Shaw and also offered to sell Shaw’s Freedom mobile unit to allay competition concerns as part of the deal.
The Competition Bureau had said the sale would weaken Freedom’s operations, reducing “competitive discipline” among national carriers and lead to a transfer of wealth from low- and middle-income groups to the wealthy Rogers and Shaw families.
Rogers, Shaw and Quebecor argued their agreement would effectively address those concerns and keep alive a “strong and sustainable” fourth wireless carrier in Canada, because the deal would expand Quebecor’s wireless operations nationally.
“The parties strongly believe the agreement effectively addresses the concerns … regarding viable and sustainable wireless competition in Canada,” the companies said in the statement, referring to the reservations of the competition watchdog and the industry minister.
The companies will also provide transport services and roaming services to Quebecor as part of the deal.
“We look forward to securing the outstanding regulatory approvals for our merger with Shaw so that we can deliver significant long-term benefits to Canadian consumers, businesses and the economy,” said Rogers’ chief executive, Tony Staffieri.
Quebecor beat out several other parties to reach the deal. Globalive Capital signed a network- and spectrum-sharing agreement with Telus Corp. in May to boost its bid to purchase Freedom. Formerly known as Wind Mobile, Freedom was founded by Globalive founder and chairman Anthony Lacavera in 2008.
Lacavera said in a statement Saturday that Globalive had offered $900 million more than Quebecor did to buy Freedom. He said its bid was rejected because Globalive is “a real independent and pureplay national long-term competitor.”
“Rogers is afraid to compete. They have shopped this deal to a succession of billionaire friendlies and friendly parties who won’t compete with them [and] are willing to sell Freedom back to them at any time,” Lacavera added.
Canadian law allows approval of mergers that harm competition if the companies can prove the mergers bring efficiency to the economy.
The Rogers-Shaw transaction announced in March 2021 already has approval from the shareholders of Shaw and the Canadian Radio-television and Telecommunications Commission. However, it remains subject to review by the Competition Bureau and the Minister of Innovation, Science and Economic Development.
The Competition Bureau expanded its opposition to Rogers’ proposed takeover of Shaw in new submissions made to the Competition Tribunal on Friday.
In legal filings released after markets closed, the agency challenged Rogers’ claims about efficiencies and said acquiring its closest rival is anti-competitive and would harm consumers through higher prices, lower-quality services and lost innovation.
It also argued the proposed sale of Shaw’s Freedom Mobile is “not an effective remedy,” because it won’t replace the growing competition Shaw Mobile would deliver in Alberta and British Columbia and would make Freedom “a subsequently weaker competitor” than it would have been.
Employers in Canada were actively seeking to fill about one million vacant positions at the beginning of April, up 44.4 per cent from the same period of the previous year, Statistics Canada said on Friday.
There was an average of 1.1 unemployed people for each job vacancy in April, down from 1.2 in March, and down from 2.4 one year earlier, the national statistical office said, adding that labor shortage trends continue in Canada with record-high job vacancies in many sectors.
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The number of job vacancies in the construction sector reached a new high of 89,900 in April, up 15.4 percent from March and up 43.3 percent from April 2021.
Job vacancies also increased to a record high in April in professional, scientific and technical services; transportation and warehousing; finance and insurance; arts, entertainment and recreation; and real estate and rental and leasing, the agency said.
In manufacturing, there were 90,400 vacant positions in April, up 7.3 percent from March and up 30.7 percent from April 2021. In accommodation and food services, employers were actively seeking to fill 153,000 vacant positions in April, little changed from the previous month.
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Meanwhile, in the health care and social assistance sector, the number of job vacancies decreased 15.1 percent to 125,200 in April from its peak of 147,500 reached in March 2022, but was 21.3 percent higher than in April 2021. There were 97,800 job vacancies in retail trade in April, down 7.1 percent from March, but 27.9 percent higher than in April 2021, Statistics Canada said.
Starting July 1, British Columbians could be paying more for goods they buy through online marketplaces such as Facebook and Amazon.
That’s because the B.C. government has made changes that require these online marketplaces that have annual gross revenues of more than $10,000 to collect the provincial sales tax on goods and services sold on their sites.
It shifts the responsibility to companies like eBay and Amazon to collect the PST, rather than the small businesses that may use a marketplace facilitator site to sell their products, according to the B.C. finance ministry.
In addition, these marketplaces are also being required by the province to charge PST to individual sellers for use of their services, such as help with listing the sales of goods, advertising, warehousing and payment collection.
It’s the latest move by the province to create a more even playing field for online operations that continue to increase their share of the economy.
The B.C. government expects the PST rule changes will generate an additional $100 million in revenues this fiscal year and $120 million the following year.
The Retail Council of Canada, which has offices in B.C., says the move to treat online marketplaces the same as brick-and-mortar stores makes sense because it puts businesses on an equal footing.
But the addition of the PST for services purchased by sellers in B.C., often small businesses, will simply add costs for consumers here and make local sellers uncompetitive as other jurisdictions in Canada have not introduced a similar measure, said Karl Littler, senior vice-president of public affairs for the Retail Council of Canada.
“It doesn’t exist anywhere else. It’s a new tax between a marketplace facilitator, like an Amazon or like a Best Buy or like a Facebook, and somebody who’s selling goods,” said Littler.
The council is concerned that small B.C. merchants will be paying seven per cent on these online marketplace services, irrespective of whether the end-customer is in B.C. or elsewhere. This will make them less competitive versus other businesses operating in other North American jurisdictions.
In B.C., people who buy goods and services through online marketplaces will be charged the PST on top of the now higher-priced goods themselves, a sort form of double taxation, argued the retail council.
As well, the changes serve as a disincentive to marketplace services to locate facilities, and thus jobs, in B.C., says the retail council.
In a written response, finance ministry officials said the application of the PST to marketplace services attempts to keep pace with the changing digital economy.
There is no explicit breakout for the tax on services from online marketplace facilitators, but in an email the ministry said it expects it to account for less than 10 per cent of the estimated additional $100 million in tax revenue that will be collected.
Werner Antweiler, a professor in the Sauder School of Business at the University of B.C., said having online marketplaces collect the PST on goods and services closes a loophole in taxation and helps collect tax from sellers abroad.
What’s different about B.C.’s approach is the inclusion of the PST on online marketplaces services provided to online marketplace sellers, said Antweiler.
It may be that other provinces or the federal government will follow suit, but this new rule may disadvantage online facilitators setting up in B.C., as B.C. would be hard pressed to enforce tax collection outside its own jurisdiction, even in another province.
“There is a trade-off. While the economic rationale to tax all services, including online marketplace services provided to sellers, is sound, B.C. going this alone puts B.C. at a disadvantage,” said Antweiler.
In 2020, the B.C. government introduced new rules that required sellers of software and telecommunications services, such as Netflix, had to collect the PST.
That measure was expected to generate $11 million in new tax revenues in 2020-21 and $16 million in 2021-2022.
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Earlier this week, regulators in the United States ordered Juul to pull its vaping products from the market, dealing a major blow to one of the most powerful players in the industry.
The company is appealing the decision by the U.S. Food and Drug Administration (FDA), asking a federal court to block a government order to stop selling its electronic cigarettes.
While the attempted ban in the U.S. doesn’t directly affect Canada, some health advocates say it raises questions about the slow pace of regulation in this country.
Here’s a closer look at the FDA’s decision and what’s happening in Canada.
Why was Juul banned?
As part of the FDA’s review process, companies had to demonstrate that their e-cigarettes benefit public health. In practice, that means proving that adult smokers who use them are likely to quit or reduce their smoking, while teens are unlikely to get hooked on them.
In its decision, the FDA said that some of the biggest e-cigarette sellers like Juul may have played a “disproportionate” role in the rise in teen vaping. The agency said that Juul’s application didn’t have enough evidence to show that marketing its products “would be appropriate for the protection of the public health.”
On Friday, the e-cigarette maker asked the court to pause what it called an “extraordinary and unlawful action” by the FDA that would require it to immediately halt its business. The company filed an emergency motion with the U.S. Court of Appeals in Washington as it prepares to appeal the FDA’s decision.
That dispute is far from over.
What about in Canada?
Juul’s vaping products, as well as those sold by other companies, remain available in Canada.
Health Canada proposed a ban on flavoured vaping products last June. At the time, it cited research indicating that flavoured vaping products are “highly appealing to youth, and that youth are especially susceptible to the negative effects of nicotine – including altered brain development, which can cause challenges with memory and concentration.”
But after a round of consultations last year, that proposed ban still hasn’t been put into effect.
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Several provinces and territories have put in place their own limits on flavoured vaping products, citing their appeal to teenagers.
(Juul voluntarily stopped selling many of its flavoured cartridges in 2020 following criticism they were designed to entice youth.)
David Hammond, a public health professor at the University of Waterloo who researches vaping in youth, said banning Juul products in the U.S. won’t necessarily have a significant impact on the industry as a whole, given its declining market share and the variety of products available.
“You know, it’s like a tube of toothpaste. If you press at one point, you just kind of squeeze it to a different spot,” he said.
What does Health Canada say?
“Health Canada has no plans to remove any vaping products from the Canadian market that comply with the Tobacco and Vaping Products Act and the Canada Consumer Product Safety Act,” the agency told CBC News in an email.
The government has recently put in place new restrictions on the sector, including limits on advertising for e-cigarettes and the amount of nicotine in the products. It’s also undergoing a review of the legislation for vaping products that went into effect in 2018.
On its website, Health Canada warns of the risks of e-cigarettes, saying “the potential long-term health effects of vaping remain unknown” and the government continues to investigate “severe pulmonary illness associated with vaping.”
Last week, Health Canada announced another set of proposed regulations that would require vaping companies to disclose information about “sales and ingredients used in vaping products,” to help the government “keep pace with the rapidly evolving vaping market.”
How popular is vaping?
Vaping is popular among young people, with 14 per cent of Canadians between the ages of 15 and 19 having vaped in the last month of 2020, up from six per cent from the same month in 2017, according to the results of the Canadian Tobacco and Nicotine Survey.
Vaping is less popular for adults over the age of 25, with just three per cent reporting that they vaped within the last month in 2020.
Robert Schwartz, a senior scientist at Toronto’s Centre for Addiction and Mental Health, said the regulatory challenge is to strike a balance between making these products available to adults as an alternative to cigarettes, while at the same time limiting their appeal to younger non-smokers.
“We definitely are finding that young people who would not otherwise become cigarette smokers have started to use e-cigarettes and they fairly quickly develop a dependence on them,” said Schwartz.
“Our research is also demonstrating that some adults are able to quit by … using these cigarettes.”
What’s the holdup?
Like Schwartz, Hammond said vaping products could be a useful tool in helping wean smokers off cigarettes. He said it doesn’t make sense to put strict limits on vaping products if cigarettes, which are thought to be more harmful, are still available in corner stores.
“I don’t think the answer lies just with how they are regulated,” he said. “I think it lies with the industry and reframing these products as something that a 50-year-old uses to quit smoking and not a 15-year-old grabs on the way to a party.”
Hammond, who sits on Health Canada’s advisory board for vaping products, said the agency could stand to move more quickly given the stakes.
“There’s no doubt these are difficult questions and the market shifts rapidly. But it’s not an area where slow, plodding regulation is a good fit,” he said.
Cynthia Callard, executive director of the advocacy group Physicians for a Smoke-Free Canada, said that, while the context is different in Canada, the FDA decision “is a reminder that governments can and should bar market access to products which cannot be shown to benefit public health.”
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