Prime Minister Justin Trudeau participates in a news conference on the COVID-19 pandemic in Ottawa, March 12, 2021.
Justin Tang/The Canadian Press
The first order of business is to stall. The next thing the Liberals have to figure out is how bad a political beating they will take if they approve the Rogers-Shaw deal. Or even if they just leave it hanging in the air during an election campaign.
Ordinarily, this kind of transaction – Rogers Communications Inc.’s $20.4-billion bid for rival Shaw Communications Inc. – would raise a few weak questions from government, slow-but-certain reviews and, eventually, public acquiescence.
But this deal, at this time, is a political problem for the governing Liberals.
This time, it is connected to the public’s sensitivity to the high costs of cellphone service, a Liberal campaign promise that hasn’t gone very far, and an expected federal election this year.
It’s worth remembering that in the 2019 election campaign, the Liberals promised to lower Canadians’ mobile-phone bills by 25 per cent – but only as a defence against the NDP, which was promising heavier regulation, including price caps, to make wireless plans more affordable.
That’s a pretty good indicator of the politics. Nearly everyone gets a mobile-phone bill, nearly everyone gets annoyed by it, and a lot of folks want government to do something about it. Some want the government to regulate prices, and those who don’t want Ottawa to foster competition.
The Liberals’ 2019 promise to lower Canadians’ wireless phone bills by 25 per cent within two years comes due this fall. But they haven’t done much other than redefining the way it is measured, to allow it to claim progress – by focusing on certain low-data phone plans offered by the telephone companies’ discount brands.
Now, the proposed Rogers-Shaw transaction would see one of the Big Three wireless companies – Bell, Rogers and Telus – buy out the fourth. For years, Liberal and Conservative governments have pursued the strategy of encouraging a fourth company that would force the Big Three to compete and lower prices. But Shaw is just the latest challenger to be bought out.
That makes approving the deal politically tricky for the Liberals. They are already taking a beating on all sides.
The NDP wants the Liberals to kill the transaction, arguing it would allow an oligopoly to consolidate and further “gouge” consumers. “I think people are going to start asking some hard questions,” New Democrat MP Brian Masse said in an interview.
Conservative industry critic Pierre Poilievre called for parliamentary hearings on the deal, saying his party would put the interests of consumers and workers ahead of the “corporate interests” of a “protected, regulated oligopoly.”
Cutting to the chase, Mr. Poilievre said his party won’t accept a reduction in the number of national players to three from four: Either the deal must be rejected, or conditions must be attached to the approval that would allow a fourth player to emerge. That second option would happen only if Rogers is forced to forgo some of Shaw’s assets, like wireless-spectrum licences, or some of its own.
So what do the Liberals do now? Stall. Killing a $20-billion transaction in a slow economy would be a big call. But it’s also risky to approve this one in a likely election year.
The government got a heads-up about the deal only Sunday night, according to John Power, a spokesman for Innovation Minister François-Philippe Champagne.
The Liberals are already noting that Rogers’ acquisition of Shaw has to be approved by the Competition Bureau, the Canadian Radio-television and Telecommunications Commission, and the Department of Innovation, Science and Economic Development.
The government will spin that it will judge the deal on affordability, competition and innovation. The companies will argue the expanded entity will be able to invest in 5G and will expand broadband networks. Maybe, given the glacial pace of CRTC reviews, the Liberals could hide behind pending reviews through a 2021 election. But maybe not.
If there is an election in June or October, you can expect the NDP to attack the Liberals on failing to act on wireless phone bills, and for failing to stop a few big rich companies from gaining a tighter stranglehold on the market. And the Liberals and NDP often fish in the same pool of voters. You can bet there are already Liberals in Ottawa who think there is more political upside in killing the deal than approving it.
Certainly, Canadian politicians know it’s not a vote-winning strategy to run as the friend of the phone company.
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.
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