Rogers Communications Inc.’s decision to sell Shaw’s wireless carrier Freedom Mobile to Quebecor Inc.-owned Videotron Ltd. will just create a “weaker” competitor in the market, one telecom watcher said Monday.
Carleton University professor Dwayne Winseck saidit won’t be easy for Quebec-based Videotron to expand nationally, making it less of a challenger for Rogers.
Winseck said Videotron, which only operates in Quebec and parts of eastern Ontario, has had national ambitions for a while, but lacks brand recognition and hasn’t been able to strike strong deals with other national carriers, despite having fairly deep pockets.
Over the weekend, Rogers said it would sell Freedom to Quebecor for $2.85 billion, as it looks to get its $26 billion takeover of Shaw Communications Inc. over the finish line, arguing that the move would give Canadians “competition and choice.”
The deal will see Quebecor buy all of Freedom’s branded wireless and internet customers, as well as its infrastructure, spectrum and retail locations.
Winseck, whose expertise is media and communications, points to Shaw’s strong presence in Western Canada and the fact that its wireless service, Shaw Mobile, won’t be divested as part of the merger as another reason why it likely won’t be an easy go for Videotron as it tries to expand across Canada.
The Competition Bureau has been seeking to block the merger over concerns it would substantially lessen wireless competition, and the sale of Freedom was widely expected to be a condition of regulatory approval.
In new submissions made to Competition Tribunal on Friday, the regulatory agency expanded its opposition to the proposed takeover, challenging the telecom giant’s claims about efficiencies and economic benefits, while arguing that consumers will be faced with higher prices.
Rogers, Shaw and Quebecor said their agreement would effectively address competitive concerns and keep alive a “strong and sustainable” fourth wireless carrier in Canada.
“I don’t think it’s going to go far enough for the Competition Bureau,” Winseck said.
However, some analysts think the sale will move the deal forward and quell the bureau’s competition concerns.
“We believe this agreement increases the prospect of the transaction closing to over 95 per cent,” Canaccord Genuity analyst Aravinda Galappatthige wrote in a note to clients.
“We believe (Quebecor’s) strong operational track record, balance sheet, expertise and asset mix will make it more difficult for the regulator to argue that the Canadian wireless competitive landscape will be materially affected by the (Rogers-Shaw) merger,” said Desjardins analyst Jerome Dubreuil in a note to clients.
Quebecor was not the only contender in the mix leading up to this decision.
Globalive Capital’s Anthony Lacavera had been very vocal about his firm’s interest in buying Freedom, formerly Wind Mobile, which he founded in 2008. Halifax-based telecom company, Eastlink, and Xplornet Communications Inc., a New Brunswick-based rural internet provider, were also said to be interested in Freedom.
Winseck doesn’t believe there is another buyer that would create a strong enough fourth competitor.
“To me, the only viable alternative would be for somebody to come in that isn’t one of the existing players to take over Shaw lock, stock and barrel,” he said.
So far, the Rogers-Shaw transaction has received approval from the Canadian Radio-television and Telecommunications Commission. It still requires approval by the Competition Bureau and Innovation, Science and Economic Development Canada.
Competition Tribunal hearings on the matter are scheduled to begin the week of Nov. 7.
Rogers and Shaw shares were among the leading companies in trading on the Toronto Stock Exchange, gaining 6.4 and 8.3 per cent respectively.
Air Canada Cutting Back Summer Flights to Deal with High Airport Traffic – VOCM
Air Canada is cutting schedules through July and August in order to reduce passenger volume in light of a series of flight delays, cancellations and general chaos in the airline industry.
Reports indicate that more than half of flights at some Canadian airports have been cancelled or delayed. While the phenomenon is being experienced throughout North America, some of the worse scenarios have played out at Toronto Pearson. The situation is so bad, federal Transport Minister Omar Alghabra has called the baggage chaos experienced at Canada’s busiest airport “unacceptable.”
President and Chief Executive Officer of Air Canada, Michael Rousseau says the surge in travel has created unprecedented and unforeseen strains on all aspects of the global aviation system.
Recurring flight delays are being experienced around the world, says Rousseau, resulting in airport congestion and a “complex array” of persistent factors affecting airlines and their partners. Rousseau says the result has been flight cancellations and customer service shortfalls for which they “sincerely apologize.”
He says the schedule reductions through the busy summer months are intended to help reduce traffic volumes even though they will result in further flight cancellations affecting travellers.
Stock market news lives updates: Stocks fall, S&P 500 heads for worst first half in 52 years – Yahoo Canada Finance
US stocks dipped on Thursday, with the major averages on track to post steep declines for the month of June and first half of 2022 as concerns over heightened inflation and the prospects of a recession weighed on risk assets.
The S&P 500 fell by about 0.2% as of 12:48 p.m. ET, coming off session lows when the index was down as much as 2.1%. The Dow dropped about 100 points, or 0.3%, and the Nasdaq declined by about 0.4%.
Stocks held lower in early trading after a new report showed core personal consumption expenditures — the Federal Reserve’s preferred inflation gauge — decelerated slightly more than expected in May. This metric rose by 4.7% over last year compared to the 4.8% increase anticipated, according to Bloomberg data. Headline inflation, which includes energy and food price changes, also rose slightly less than expected, or at a 6.3% annual rate to match April’s pace. However, separate data showed real personal spending fell by a larger-than-expected 0.4% in May after a rise of 0.7% in April, suggesting consumers were pulling back on some spending with inflation at current levels.
The risk-off mood in equities extended to other asset classes including oil. West Texas intermediate crude futures fell back below $110 per barrel, and bitcoin prices sank to just over $19,000.
Thursday’s price action extended a streak of declines for US equities. These have been hit hard for months now as investors have weighed persistently hot inflation against risks of an economic downturn, as the Federal Reserve responds to inflation with faster tightening. Federal Reserve Chair Jerome Powell this week reaffirmed that the central bank’s main goal is bringing down inflation running at its fastest rate in over 40 years, suggesting that this aim will take priority over fully preserving activity elsewhere in the economy.
“Is there a risk we would go too far? Certainly there’s a risk,” Powell said at the European Central Bank’s annual economic policy roundtable conference in Portugal on Wednesday. “The bigger mistake to make — let’s put it that way — would be to fail to restore price stability.”
Powell earlier in June suggested either a 50 or 75 basis point interest rate hike would most likely be on the table following the Fed’s July meeting. And in the weeks since, a number of other key central bank officials have affirmed that the latter will probably be the most appropriate option, with inflation and consumer inflation expectations each remaining elevated.
Amid the myriad concerns facing markets as of late, stocks are on track to close out the worst first half of a year in decades. Based on Wednesday’s closing prices, the S&P 500 is set to post a 19.9% decline for the first six months of the year — its worst performance since 1970. For the month of June alone, the index is on track to slide by 7.6%.
All 11 major sectors in the index are heading toward monthly losses, with the cyclical energy, materials and financials sectors among the worst performers as fears over a recession have resurged. That leadership also reversed what was seen earlier this year, when energy stocks and outperformed amid oil and other energy commodities’ march higher. The more defensive health-care, consumer staples and utilities sectors outperformed in June.
Both the Dow and Nasdaq Composite also headed for marked monthly and year-to-date losses. As of Thursday’s close, the Dow had fallen 14.6% for the first half of the year, and the Nasdaq shed nearly 29%.
On the move
Bed Bath & Beyond (BBBY) shares extended losses after a more than 23% decline in the stock on Wednesday. The retailer reported same-store sales that sank more than 20% in the most recent quarter, and also announced CEO Mark Tritton would be leaving the company and the board, effective immediately, and that board member Sue Gove would take over on an interim basis.
RH (RH) shares tumbled after the furniture company slashed its full-year outlook to forecast a revenue decline, citing “the deteriorating macro-economic environment” and lower-than-expected demand. RH now sees revenue falling between 2% and 5% this year, versus a prior outlook for sales to come in flat to up 2%.
Constellation Brands (STZ) turned lower even after the beverage company posted first-quarter results that exceeded estimates on most major metrics. Comparable earnings per share came in at $2.66 versus the $2.50 expected, according to Bloomberg data, and beer net sales of $1.9 billion were $160 million better than expected.
Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter.
Do unions at Starbucks mean the labour movement is picking up steam? – CBC News
With seven years of experience as a barista, Sarah Broad knows how to make all kinds of coffee.
Now the Starbucks worker also knows what it feels like to be a union member and the face of a growing campaign by the United Steelworkers (USW) to unionize Starbucks stores in Canada.
“I never realized how passionate I would feel about the labour movement,” said Broad in an interview from her basement apartment in Victoria, B.C.
Broad, a shift supervisor at a Victoria location, helped organize her store in August 2020, the only one in Canada at the time. She’s one of a number of service industry and retail workers in North America joining the labour movement since the start of the pandemic.
The surge in interest has some labour leaders and experts wondering if this moment could mark a turning point for unions who have seen declining numbers in the sector for years.
In addition to efforts to unionize Amazon warehouses, in the U.S there are efforts to bring unions into Apple stores and Trader Joe’s. In Canada there’s been a successful campaign to organize a handful of Indigo locations and a PetSmart store.
A recent poll in the U.S. showed 68 per cent of Americans approved of labour unions, the highest number since 1965.
“I think this could be a watershed movement for Canadian and U.S. unions,” said Nicole Denier, an assistant professor at the University of Alberta in Edmonton who studies unions.
“We’ll see over the next year whether or not the momentum will continue to build.”
WATCH | Workers trying to unionize hundreds of Starbucks stores:
Baristas battle iconic brand
Starbucks is facing a wave of union drives.
An online tracker and map based on numbers from the U.S. National Labour Relations Board (NLRB) shows about 300 Starbucks shops in the U.S have filed to unionize in just six months, including the flagship roastery in the company’s hometown of Seattle. According to the tracker, run by a non-profit media organization that focuses on labour stories, more than half have been certified.
Broad says health and safety issues related to the pandemic, abusive customers and the high cost of living In Victoria made her and her coworkers seek union representation to make their working conditions better and improve their wages.
While the process was “a little intimidating,” she said that getting workers onboard in her store didn’t take long because most were “super gung-ho.”
It took a little over a month to get the store’s union certified under B.C. law, but took almost a year to negotiate a collective agreement with Starbucks Canada.
For USW it will be expensive to organize and support many small locations one at a time compared to organizing large factories, lumber mills or offices. But the small bargaining units are not the only challenge in organizing the service and retail sectors.
“The major issue is turnover in employees. It’s a younger, transient workforce,” said Mike Duhra, a USW representative for Western Canada.
Another factor, says Duhra, is that unions are so rare in the sector that some workers just aren’t familiar with them or don’t recognize how they can help.
Company executives have visited stores to discourage workers from unionizing in the U.S., and workers claim one location was shut down earlier this month because it recently unionized.
Starbucks announced company-wide enhanced benefits and wage increases in May, but they’re not being offered to workers in unionized stores in the U.S. or Canada.
A spokesperson for Starbucks Canada told CBC News the company believes it is better without a union, but it continues to “respect our partners’ right to organize.”
In addition, wage increases are not being offered to the unionized location in Victoria because it has “its own collective agreement, including its own unique wage increase schedule.”
Broad believes the unionized stores aren’t getting a raise because “they’re just trying to make us look bad and retaliate against us for unionizing.”
Economic conditions primed for union growth
Mikal Skuterud, an economist at the University of Waterloo, says the current tight labour market and high inflation both favour union growth.
“Unionization rates are procyclical,” says Skuterud, “so when the economy goes into a boom, unionization rates tend to go up.”
According to the NLRB, applications to start unions in U.S. workplaces are up 57 per cent this year compared to the first six months of 2021.
Equivalent data about union organizing in Canada is not available but Bea Bruske, the president of the Canadian Labour Congress said “we are seeing growing momentum in Canada towards unionization, especially amongst young workers.”
Even so, Skuterud says unions in the private sector in Canada could desperately use a boost.
“Unionization rates, particularly in the private sector, are the lowest they’ve ever been.”
USW’s Duhra says unions are indeed looking to move into new sectors for growth.
“We have to find new members … and this is a perfect industry where people need a union,” he said, adding that workers at Starbucks came to USW for help.
Will the momentum last?
Lawyer and professor Kenneth Thornicroft from the University of Victoria is skeptical that Starbucks will become a highly unionized company.
“Unless a union is able to get pretty deep penetration across the store network,” he said, Starbucks “can just wait them out,” and as members get tired of paying dues, stores will decertify.
Thornicroft points out that’s exactly how it played out when a handful of BC stores unionized in the 1990’s.
He believes unions might have a better opportunity for growth in the banking and financial services sector than in food service.
But Denier thinks the retail and food sectors are ripe for unionization because both industries have long been under-unionized.
In her view, workers aren’t just committed to getting better wages “but to having a voice in the workplace.”
She adds that workers are also focused on making companies that market themselves as progressive accountable for their public image.
For her part, the new union activist Sarah Broad is eagerly serving up advice and support to potential barista brothers and sisters trying to organize other stores.
“I’m so excited that they’re wanting to join and it’s going to be challenging,” she said, “but it’s so worth it.”
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