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Tesla stock has worst day in 8 months as investors digest Musk's potential $15B tax bill – CBC.ca

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Shares in the most valuable car company on Earth tanked on Monday because the richest person on the planet may have to pay some taxes.

Electric car maker Tesla’s shares were down by as much as seven per cent on Monday as investors digested news that the company’s controversial CEO, Elon Musk, may have to sell millions of shares in the company to pay a looming income tax bill of up to $15 billion US. 

In a bizarre Twitter poll over the weekend, Musk mused about whether or not he should sell about 10 per cent of his holdings in the electric car maker that has seen its value soar during the pandemic. Currently, Tesla is worth about $1.2 trillion US, more than the value of every other major vehicle manufacturer in the world, combined.

Musk, who owns 170 million shares in the company, said he would abide by the results of the poll either way, and more than half of his poll’s respondents told him to sell.

At current prices, Musk selling 10 per cent of his Tesla stock would net him about $21 billion US. 

Stock windfall brings hefty tax bill

While Musk is no stranger to making bizarre pronouncements on Twitter, the sell off in Tesla share started to make a little more sense when it emerged that he could be on the hook for a hefty tax bill next year, when stock options granted to him a decade ago are set to pay off.

In 2012, Musk was awarded about 23 million stock options in Tesla, when shares in the money-losing company that sold a few thousands cars every year were going for about $5 a piece. Today those same shares are changing hands at nearly $1,200 apiece, which means Musk stands to net up to $28 billion when they pay off — or “vest,” in investment parlance — in August of next year.

While a nice payday by any reasonable metric, that stock windfall would bring with it a hefty tax bill based on laws in California, where Musk has been a resident for most of the past decade.

The highest tax bracket in California is above 50 per cent when federal and state taxes are factored in, and media reports on Monday suggest the tax bill could be between $10 and $15 billion US. On the high end, that’s about four per cent of Musk’s current net worth of $338 billion US, which is the most of anyone on earth.

Musk famously does not get paid much of a conventional salary, preferring to take most of his compensation in stock-based forms. Bloomberg data shows he received a base salary of $0 in 2020, down from $23,760 in 2019 and $58,380 in 2018.

Though Musk tweeted about needed to sell as much as 10 per cent of his holdings to cover his tax bill, he wouldn’t actually need to sell that many shares, which is why analyst Daniel Ives of Wedbush Securities says that figure surprised some people and prompted the sell off in Tesla shares.

Tesla shares closed at $1,222 on Friday, and at one point on Monday were going for as low as $1,141. That’s a decline of 6.6 per cent, although the shares pared some of those losses in the afternoon.

If Musk does sell a large chunk of shares, “ultimately it’s a digestible number we are not overly concerned about,” Ives said. 

‘Rip the Band-aid off now,’ analyst says 

In a quarterly filing with regulators last month, the company acknowledges that stock sales by the CEO are not only possible, but they could also have a major impact on the stock price.

“If the price of our common stock were to decline substantially, Mr. Musk may be forced by one or more of the banking institutions to sell shares of Tesla common stock to satisfy his loan obligations if he could not do so through other means,” Tesla said.

“Any such sales could cause the price of our common stock to decline further.”

If Musk is going to sell, Ives says he’d prefer to see him do it fast.

“We would rather Musk rip the Band-aid off now and sell this portion of stock, rather than it lingering over the next year and feeding into any non-fundamental bear thesis on the story.”

Musk also recently mused about his willingness to donate $6 billion to solve world hunger, as long as the UN World Food Programme could show him exactly how it would spend the money to do that.

In addition to pontificating over whether or it’s worth his while to feed the world’s poorest people — a charitable move that would doubtless significantly bring down his tax bill — this year alone Musk has also caused the price of the doge cryptocurrency to skyrocket and then plummet again

He recently caused the share price of car rental company Hertz to jump and then crater by suggesting a deal for them to buy 100,000 of his company’s cars may not be a sure thing.

WATCH | Musk’s war of words over solving world hunger: 

Elon Musk’s $6B could stave off starvation for millions but won’t ‘solve world hunger,’ experts say

5 days ago

Wednesday, November 3 – A $6-billion US donation from SpaceX founder Elon Musk may help stave off starvation for millions currently facing famine, but it certainly would not “solve world hunger,” experts say. So if money isn’t the solution, what is? We’ll explore. 45:59

Another regulatory headache?

There’s also some question as to whether or not Musk has once again run afoul of securities laws with his tweeting.

In 2018, he made headlines for suggesting in a tweet that he had secured funding to take Tesla private for $420 a share, at a time when the company was worth far less than that. That sparked a run up in the company’s share price, before it fell back down again when he admitted the plan was far from certain.

The Securities And Exchange Commission launched proceedings against him for misleading investors with that tweet, and among the stipulations of that settlement are that Musk should refrain from saying things on Twitter that he should be telling regulators and investors about first.

Bloomberg Intelligence analyst Holly Froum says that Musk’s Twitter poll is “likely not contractually binding, but if Musk doesn’t abide by his plan, it could be considered misleading and give rise to securities fraud claims in the event of potential investor losses.”

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Ontario man who accidentally transferred $19000 to stranger's account left for weeks without solution – CTV Toronto

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An Ontario man says he has been fighting to get back $19,000 for months after making a “simple mistake” while trying to transfer money between two of his bank accounts.

Milton, Ont. man Roberto Guardado said he had just purchased a new home and in September was trying to transfer money from his Bank of Montreal (BMO) account to his CIBC account so that he could make the down payment.

He said he called BMO to arrange the wire transfer, figuring it would be the easiest way to move the funds to CIBC.

Guardado said he has two bank accounts with CIBC, one for his personal savings and one for business. He was trying to transfer the money into the savings account.

He said while making the transfer, he correctly read out his CIBC savings account number, but mistakenly gave the transit number of his CIBC business account.

The five-digit transit number helps the bank identify which branch the money is being sent to.

The mistake resulted in Guardado’s money being sent to a stranger’s CIBC account, he said.

CIBC

“I noticed the money went out but it didn’t go into my CIBC account,” Guardado told CTV News Toronto. “So I went home that day and I started looking on my computer and then I realized I gave the wrong transit number.”

He said he immediately called BMO, who told him they would launch an investigation. 

Despite calling the bank every few days for an update, he said it took five weeks before he got any answers.

Guardado said he was told that his $19,000 was deposited into someone else’s account and the person had withdrawn it. 

He said both BMO and CIBC told him nothing further could be done to retrieve his money.

“I couldn’t believe I made the mistake,” Guardado said. 

Guardado said he called the police, but was also told that because he initiated the transfer there was nothing to investigate.

BMO

“The police told me that because it’s not considered fraud they can’t do anything about it,” he said. 

‘JUST A SIMPLE MISTAKE’

Guardado said that while he fully admits the error was his fault, he doesn’t understand why the bank couldn’t help him quickly reverse the transfer.

“It was just a simple mistake and my money ended in someone else’s account,” Guardado said.

Because of the lost money, Guardado said he had no choice but to back out of the sale of his new home. 

Shortly after CTV News Toronto contacted CIBC and BMO about Guardado’s situation, he said he received a call from the banks telling him his $19,000 would be returned to his account. 

CIBC spokesperson Trish Tervit confirmed on Saturday they had resolved the issue with Guardado. 

“It’s important that when transferring funds between financial institutions that the sender ensures the recipient account number is correct as misdirected funds may be difficult to recover,” Tervit added. 

Guardado said CIBC told him this is a “unique situation” that is being resolved on a one-time basis. 

Meanwhile, a spokesperson from BMO said they had a “good conversation” with Guardado, but couldn’t comment further for privacy reasons. 

While this stressful two-month chapter is now over for Guardado, he said banks “have to come up with a better system” for when people make mistakes.

“It was a stupid mistake on my part, but the process to fix it has to be easier,” he said. “I was so stressed that I lost weight and I couldn’t sleep. It was bothering me so much.”

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Cargill beef-processing plant in High River, Alta. narrowly avoids strike action – CBC.ca

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Employees at Cargill’s beef-processing plant in High River, Alta., have voted in favour of a new labour contract, narrowly avoiding strike action and a possible lockout.

United Food and Commercial Workers Local 401 (UFCW), which represents workers at the plant, said Saturday that workers chose to accept the new contract offer, with 71 per cent voting in favour.

In a statement, UFCW said it was not an easy decision for staff at the plant, and called the contract vote a “bittersweet victory.” 

Workers had raised safety concerns after a COVID-19 outbreak at the plant in 2020 affected more than 900 people. The outbreak, which forced Cargill to temporarily close the plant — one of Canada’s largest — is linked to three deaths.

The union says the new contract includes procedures to ensure worker health and safety, benefits, and new rights for sick employees. 

After the two sides held talks on Tuesday, UFCW’s bargaining committee agreed to recommend the new offer to its members, Cargill spokesperson Daniel Sullivan said. Workers voted between Thursday and Saturday.

The union released parts of the proposed offer to CBC earlier in the week. The contract included $4,200 in retroactive pay for many Cargill union members; signing, holiday and COVID-19 bonuses; and a $5 wage increase.

Workers prepare beef to be packaged at the Cargill facility near High River, Alta. The plant is the site of what became the largest COVID-19 outbreak in North America last year. (Name withheld)

UFCW had said the plant’s roughly 2,000 workers would strike Monday unless an agreement was reached.

The union also they brought in tents, floodlights and heaters for the possible strike, while nearby fields were levelled to provide parking.

Cargill had also planned to lock out all UFCW union staff as of 12:01 a.m. Monday, according to a statement from the company’s vice-president of labour relations, Tanya Teeter, which was obtained and made public by the union.

“We are pleased to have reached an agreement that is comprehensive, fair, and reflective of their commitment to excellence at Cargill and the critical role they play in feeding families across Canada,” Jarrod Gillig, the company’s president of business operations and supply chain for North America protein, wrote in a statement to CBC Saturday.  

“As an organization that leads with our value to put people first, we truly believe this ratification is in the best interests of our employees and we are eager to move forward to build a stronger future – together.”

Reforms still needed: Union

“We also look forward to the citizens of Alberta joining with us in calling for reforms and restructuring in the meatpacking industry,” UFCW President Thomas Hesse wrote in a statement Saturday. 

“Workers have been ripped off. Ranchers have been ripped off. And we’ve all been ripped off at the supermarket counter. Government failed to protect these workers, as well as failing to protect Alberta ranchers and consumers. Change must occur.” 

The Cargill plant processes up to 4,500 head of cattle per day, accounting for about one-third of Canada’s beef.

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Job growth in Canada exceeded expectations in November – Canada Immigration News

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Published on December 4th, 2021 at 08:00am EST

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With employment soaring beyond predictions and unemployment dropping to near pre-pandemic levels, new labour force data suggest that Canada is on its way to a full economic recovery.

This past November, Canadian employers added 154,000 jobs to the economy. Last month’s growth exceeded analysts’ predictions of 38,000, which was closer to October levels. The gains pushed employment a full percentage point higher than pre-pandemic levels. Also, unemployment dropped to 6%, which is within 0.3 percentage points of what it was in February 2020.

Data from Statistics Canada’s Labour Force Survey reflect labour market conditions during the week of November 7 to 13. Proof-of-vaccination policies and other public health measures were largely similar to those in October.

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Labour shortages persist despite employment gains

Hiring in November was driven by the private sector both in full-time and part-time positions. Even so, Canada is still experiencing labour shortages across sectors like hospitality, retail, and health care. In September, there were roughly one million job vacancies across the country.

Most government COVID-19 financial assistance measures ended in late October. Some analysts say it may have pushed people to accept job offers. Among these measures was the Canadian Recovery Benefit for individuals, which had been accused of discouraging people from returning to work. The Conference Board of Canada says the lack of wage growth was an even greater disincentive, especially in low-wage service industries.

“November’s job growth suggests the withdrawal of the [Canadian Recovery Benefit] may have pushed some workers back into employment though alone this will not be sufficient to address the significant labour shortages affecting several industries,” writes economist Liam Daly.

RBC economist Nathan Janzen wrote that despite the surge in employment there were still “exceptionally low” levels of workers in the service sectors.

“Employment in accommodation & food services edged up 5k from October but is still more than 200k below pre-shock levels,” Janzen wrote. “Travel and hospitality spending has been rebounding, but with the unemployment rate now substantially lower, it is increasingly clear that there are not enough remaining unemployed workers out there to re-fill all of those jobs any time soon.”

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