Telus Corp. is blaming Ottawa’s ban on China’s Huawei Technologies Inc. for pausing its fibre optic network build in the city of St. Albert and elsewhere in Alberta, raising questions over the sanction’s spillover effects on connectivity in smaller communities.
The delay leaves many neighbourhoods in the city of about 70,000 without access to Telus’ PureFibre home internet network. The Vancouver-based company originally announced the $100-million project in 2019 to connect more than 90 per cent of St. Albert homes and businesses to its fibre optic network by the end of 2020.
During a council meeting last month, St. Albert’s director of information technology Joanne Graham told councillors that Telus informed the city on April 28 it had paused its PureFibre build “in all communities in Alberta with the exception of communities where they had a contract or a partnership with the municipality.”
In addition to factors such as high inflation and interest rates, Graham said Telus “very predominantly” cited the fallout of the federal government’s ban on Huawei technology.
“They have had to dismantle the Huawei infrastructure on all of their antennas and so primarily we’re seeing pressures on the capital that they had available for all the builds across Alberta,” she said.
The federal government announced in May 2022 it was banning Huawei from involvement in Canada’s 5G wireless network, along with ZTE, another Chinese state-backed telecommunications firm, though it had been mulling the move since 2019.
Canadian companies were given until June 2024 to remove or terminate 5G equipment from Huawei and ZTE, along with a deadline of December 2027 to get rid of existing 4G equipment provided by the Chinese companies.
In 2020, Telus announced it would be working with Sweden’s Ericsson and Finland’s Nokia as suppliers for its 5G network, ditching previous plans to rely on Huawei equipment for the rollout. Prior to that switch, Telus had warned the deployment of its 5G network could be delayed and be more expensive than anticipated if Ottawa went through with a ban on Huawei equipment.
Telus, which at the time used Huawei radio equipment in non-core portions of its 3G and 4G wireless networks, said in 2019 it did not believe Huawei posed a major risk to national security.
St. Albert councillor Mike Killick said the delay in the PureFibre rollout is felt by local residents, particularly those in older neighbourhoods that have yet to be retrofitted, as he highlighted the faster internet speeds and increased reliability that the technology is meant to provide.
“Some people on one side of the street can get the service and on the other side of the street they can’t,” said Killick, whose motion at council, which passed, called on Mayor Cathy Heron to write a letter to Telus requesting the company honour its original commitment.
“I certainly hear from all kinds of residents that are looking for this kind of service and are frustrated that there’s a pause on expanding for their neighbourhoods.”
In a statement, Telus said it is committed to keeping St. Albert residents, businesses and customers updated on the progress of its PureFibre rollout once it resumes. The company did not answer questions regarding when that would be, as well as the effect of the Huawei ban and where else in Alberta it has paused its fibre network build.
“Telus has completed more than two thirds of our PureFibre build in St. Albert, bringing our most advanced broadband Internet technology to the community,” said spokeswoman Brandi Merker.
“We understand how important connectivity is for the City of St. Albert and we are investing more than $7.2 million now through 2027 in network infrastructure, operations and spectrum to support vital network connectivity in the community.”
Innovation, Science And Economic Development Canada did not respond to a request for comment by deadline.
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Canada’s Huawei ban is in line with many of its allies. The U.S., U.K. and Australia have similarly blocked the Chinese company from participating in their 5G rollouts over security concerns, while last week the Financial Times reported the European Union is considering a ban on its members using Huawei equipment.
Telus should have been better prepared for the effect of Canada’s Huawei ban, said Gregory Taylor, an associate professor with University of Calgary’s communications, media and film department.
Taylor said the Canadian government “really dragged their feet” on imposing the ban compared to other countries, “largely to help accommodate the infrastructure that was being built” by companies such as Telus.
“It’s an impact that they should have seen coming since 2017 when the U.S. decides that they’re going to ban Huawei in their infrastructure,” he said.
“It was fairly clear that Canada was going to eventually follow suit. So this expense, yes, it is a substantial expense for the infrastructure providers in Canada, but it’s one that they’ve had ample time to see coming.”
But Taylor called the blame being placed on the Huawei ban now a “red herring,” suggesting that Telus is looking for ways to limit its spending given a decrease in profit reported in its latest quarter compared to last year.
“I think this is an excuse being put forth by Telus but I don’t think it really holds up to much scrutiny at all because Canada was the last of the Five Eyes countries to put in the Huawei ban,” said Taylor.
He also criticized the state of competition by telecommunications providers in Alberta in light of the merger of Rogers Communications Inc. and Shaw Communications Inc. earlier this year.
“Rogers is right now kind of restructuring, trying to figure out how they’re going to work this with bringing Shaw into the Rogers fold and I think that Telus recognizes that for this moment, they don’t face the same competition that they did,” he said.
Whatever the reason, Killick said it’s imperative that the delay doesn’t increase disparities in internet connectivity, both within the town and compared with the level of service available in major cities across the country.
“We know it takes time, obviously, to build it out,” the local councillor said. “But we just hope that we can find a way to continue to encourage Telus to do that and provide service across St. Albert to all residents.”
MONTREAL – Travel company Transat AT Inc. reported a loss in its latest quarter compared with a profit a year earlier as its revenue edged lower.
The parent company of Air Transat says it lost $39.9 million or $1.03 per diluted share in its quarter ended July 31.
The result compared with a profit of $57.3 million or $1.49 per diluted share a year earlier.
Revenue in what was the company’s third quarter totalled $736.2 million, down from $746.3 million in the same quarter last year.
On an adjusted basis, Transat says it lost $1.10 per share in its latest quarter compared with an adjusted profit of $1.10 per share a year earlier.
Transat chief executive Annick Guérard says demand for leisure travel remains healthy, as evidenced by higher traffic, but consumers are increasingly price conscious given the current economic uncertainty.
This report by The Canadian Press was first published Sept. 12, 2024.
Dollarama Inc.’s food aisles may have expanded far beyond sweet treats or piles of gum by the checkout counter in recent years, but its chief executive maintains his company is “not in the grocery business,” even if it’s keeping an eye on the sector.
“It’s just one small part of our store,” Neil Rossy told analysts on a Wednesday call, where he was questioned about the company’s food merchandise and rivals playing in the same space.
“We will keep an eye on all retailers — like all retailers keep an eye on us — to make sure that we’re competitive and we understand what’s out there.”
Over the last decade and as consumers have more recently sought deals, Dollarama’s food merchandise has expanded to include bread and pantry staples like cereal, rice and pasta sold at prices on par or below supermarkets.
However, the competition in the discount segment of the market Dollarama operates in intensified recently when the country’s biggest grocery chain began piloting a new ultra-discount store.
The No Name stores being tested by Loblaw Cos. Ltd. in Windsor, St. Catharines and Brockville, Ont., are billed as 20 per cent cheaper than discount retail competitors including No Frills. The grocery giant is able to offer such cost savings by relying on a smaller store footprint, fewer chilled products and a hearty range of No Name merchandise.
Though Rossy brushed off notions that his company is a supermarket challenger, grocers aren’t off his radar.
“All retailers in Canada are realistic about the fact that everyone is everyone’s competition on any given item or category,” he said.
Rossy declined to reveal how much of the chain’s sales would overlap with Loblaw or the food category, arguing the vast variety of items Dollarama sells is its strength rather than its grocery products alone.
“What makes Dollarama Dollarama is a very wide assortment of different departments that somewhat represent the old five-and-dime local convenience store,” he said.
The breadth of Dollarama’s offerings helped carry the company to a second-quarter profit of $285.9 million, up from $245.8 million in the same quarter last year as its sales rose 7.4 per cent.
The retailer said Wednesday the profit amounted to $1.02 per diluted share for the 13-week period ended July 28, up from 86 cents per diluted share a year earlier.
The period the quarter covers includes the start of summer, when Rossy said the weather was “terrible.”
“The weather got slightly better towards the end of the summer and our sales certainly increased, but not enough to make up for the season’s horrible start,” he said.
Sales totalled $1.56 billion for the quarter, up from $1.46 billion in the same quarter last year.
Comparable store sales, a key metric for retailers, increased 4.7 per cent, while the average transaction was down2.2 per cent and traffic was up seven per cent, RBC analyst Irene Nattel pointed out.
She told investors in a note that the numbers reflect “solid demand as cautious consumers focus on core consumables and everyday essentials.”
Analysts have attributed such behaviour to interest rates that have been slow to drop and high prices of key consumer goods, which are weighing on household budgets.
To cope, many Canadians have spent more time seeking deals, trading down to more affordable brands and forgoing small luxuries they would treat themselves to in better economic times.
“When people feel squeezed, they tend to shy away from discretionary, focus on the basics,” Rossy said. “When people are feeling good about their wallet, they tend to be more lax about the basics and more willing to spend on discretionary.”
The current economic situation has drawn in not just the average Canadian looking to save a buck or two, but also wealthier consumers.
“When the entire economy is feeling slightly squeezed, we get more consumers who might not have to or want to shop at a Dollarama generally or who enjoy shopping at a Dollarama but have the luxury of not having to worry about the price in some other store that they happen to be standing in that has those goods,” Rossy said.
“Well, when times are tougher, they’ll consider the extra five minutes to go to the store next door.”
This report by The Canadian Press was first published Sept. 11, 2024.
TORONTO – The U.S. Consumer Financial Protection Bureau has ordered TD Bank Group to pay US$28 million for repeatedly sharing inaccurate, negative information about its customers to consumer reporting companies.
The agency says TD has to pay US$7.76 million in total to tens of thousands of victims of its illegal actions, along with a US$20 million civil penalty.
It says TD shared information that contained systemic errors about credit card and bank deposit accounts to consumer reporting companies, which can include credit reports as well as screening reports for tenants and employees and other background checks.
CFPB director Rohit Chopra says in a statement that TD threatened the consumer reports of customers with fraudulent information then “barely lifted a finger to fix it,” and that regulators will need to “focus major attention” on TD Bank to change its course.
TD says in a statement it self-identified these issues and proactively worked to improve its practices, and that it is committed to delivering on its responsibilities to its customers.
The bank also faces scrutiny in the U.S. over its anti-money laundering program where it expects to pay more than US$3 billion in monetary penalties to resolve.
This report by The Canadian Press was first published Sept. 11, 2024.
