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WestJet strike averted as Ottawa imposes arbitration on airline, mechanics

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A possible long-weekend strike at WestJet has been averted.

The federal government on Thursday directed the airline and plane mechanics into binding arbitration, steering clear of a work stoppage that threatened to disrupt flights for hundreds of thousands of travellers over the Canada Day long weekend.

In a late-afternoon social media post, Labour Minister Seamus O’Regan said he was invoking his authority under the Canada Labour Code to end the impasse between the two sides as the clock ticked down toward a Friday evening deadline.

“Strong first agreements set unions and employers on the path of collective bargaining,” O’Regan said in a statement.

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“They set a strong foundation to build upon at the bargaining table and bring the parties one step closer to a strong second agreement and an even stronger third agreement — reached at the bargaining table. That’s what we want to see here.”

WestJet and the Aircraft Mechanics Fraternal Association both said they will abide by the order, with strikes and lockouts off the table.

“With the government’s actions, the summer travel plans of Canadians have been protected and we have a path to resolution,” said WestJet Airlines president Diederik Pen. No more flight cancellations are planned, after more than a dozen on Thursday.

The union, which had opposed arbitration by the country’s labour tribunal, took a less upbeat tone.

“There is no modern precedent for the minister’s action,” the association’s negotiating committee said in a statement. But it added that it will tell its approximately 680 workers “to refrain from any unlawful job action.”

Union members voted overwhelmingly to reject a tentative deal earlier this month and fought WestJet’s request for intervention by the Canada Industrial Relations Board.

In response to that request, the mechanics association served the company with an initial 72-hour strike notice on June 17, prompting WestJet to cancel nearly 50 flights last week before both sides agreed to resume negotiations.

The second strike notice came Tuesday amid tense negotiations over the collective agreement — the first between WestJet and the union.

The Calgary-based carrier had already begun to cancel flights this week, calling off roughly 25 trips on Thursday and Friday in anticipation of possible job action as early as 5:30 p.m. MDT on Friday. Affecting some 3,300 customers, WestJet’s decision to start concentrating its 180-plane fleet sought to avoid leaving aircraft in far-flung locations and stranding passengers and crew in the event of a work stoppage.

As negotiations around the contract dragged on in a windowless conference room at a hotel near Toronto’s Pearson airport, the tone of statements put out by the two sides grew chippier.

On Wednesday, the airline asked the tribunal to quash the latest strike notice and bar future ones — except on approval from the labour board. The affidavit from lawyer Simon Mortimer argued that the union was “moving backward” in the talks, pointing to one counter-offer from workers that called for “a 50 per cent cost increase” over the tentative agreement.

The union’s bargaining demands showed a failure to act in good faith and its public statements included “inflammatory” and “offensive” elements, the document claimed.

The union — the majority of its WestJet members are aircraft maintenance engineers (AMEs) who inspect each active plane daily — claimed the carrier was resorting to “false accusations” and “brinksmanship.”

In a statement, the mechanics’ negotiating committee retorted: “WestJet alleges that an AME strike would place the ‘company and the travelling public in peril at a critical time.’ It is difficult to conceive of a more inflammatory or offensive comment.”

Ian Evershed, a union representative involved in the talks, cited “some pretty intense moments” during the negotiations.

“We just aren’t seeing any progress,” he said in phone interview Wednesday.

Just over a year ago, the airline found itself in a similar situation after some 1,800 pilots threatened to walk off the job. WestJet averted a strike after reaching a last-minute deal in the wee hours ahead of a long weekend in May, but not before cancelling more than 230 flights and disrupting the travel plans of thousands of passengers.

The Canada Industrial Relations Board could opt not to suspend the right to a work stoppage as it hammers out a contract, but precedent and statements from the two parties suggests that outcome is a non-starter.

Both sides are slated to meet with the tribunal on Friday. “The board will then determine next steps or make the necessary rulings, as appropriate,” tribunal spokesman Jean-Daniel Tardif said in an email.

The mechanics are hoping for a raise well beyond WestJet’s initial offer of a roughly 10 per cent pay hike — it put forward a bigger one this week — in the first year of a five-and-a-half-year contract, Evershed said. He also pointed to counterparts in the United States who he said earn more than 1.5 times the current compensation level.

WestJet said it has offered a 12.5 per cent wage hike in the first year of the contract, and a compounded wage increase of 23 per cent over the rest of the term.

It also said the deal would protect work-life balance, ensure job security and attract more workers to the technical operations team.

This report by The Canadian Press was first published June 27, 2024.

Christopher Reynolds, The Canadian Press
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Japan’s SoftBank returns to profit after gains at Vision Fund and other investments

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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.

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Yuri Kageyama is on X:

The Canadian Press. All rights reserved.

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Trump campaign promises unlikely to harm entrepreneurship: Shopify CFO

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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.

Companies in this story: (TSX:SHOP)

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RioCan cuts nearly 10 per cent staff in efficiency push as condo market slows

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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.

Companies in this story: (TSX:REI.UN)

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