Tuesday, May 16, 2023

Schwartz to step down as Onex investors approve succession plan

ONEX CORPORATION (ONEX:CT)

60.05 0.17 (0.28%)
As of: 05/17/23 1:24:00 am
REAL-TIME QUOTE. Prices update every five seconds for TSX-listed stocks
Jul '22Oct '22Jan '23Apr '23556065707580
Chart Type - 1year
See Full Stock Page »

Gerry Schwartz will step down as chief executive officer of Onex Corp., the Canadian private equity firm he’s managed for nearly 40 years, after shareholders agreed to extend his voting control until 2026.

Investors backed the firm’s succession plan at the annual meeting Thursday by allowing Schwartz to hang on to the special rights attached to his multiple-voting shares for three more years. That paves the way for President Bobby Le Blanc to replace the founder as CEO. Schwartz will remain chairman.

“Onex is on a certain path to a one-share, one-vote structure,” Schwartz told shareholders. The share rose 1.1 per cent to $61 in Toronto.

Le Blanc, who was promoted to president in 2020, is taking control at a critical moment for the firm as it struggles with fundraising for its sixth flagship fund and lackluster returns. Buyout firms are contending with one of the most difficult investment climates since the 2008 global financial crisis, as higher interest rates make financing deals more expensive.

“It’s a true honor to have the opportunity to lead this team,” Le Blanc said.

 

McCain steps down as Maple Leaf Foods CEO, optimistic about 2023

MAPLE LEAF FOODS INC (MFI:CT)

26.24 0.16 (0.61%)
As of: 05/17/23 1:25:38 am
REAL-TIME QUOTE. Prices update every five seconds for TSX-listed stocks
Jan '23Sep '22May '2317.52022.52527.530
Chart Type - 1year
See Full Stock Page »

The head of Maple Leaf Foods Inc. said he's confident in the future of the company as he hands the reins of the protein producer to current president and chief operating officer Curtis Frank.

CEO Michael McCain will stay on as executive chair of the board of directors for the Mississauga-based firm, and said his family will remain as the company's largest shareholder through McCain Capital.

"When I started at Maple Leaf almost three decades ago, the world was a very different place and the challenges, while many, were perhaps not as profound as they are today," said McCain on a call with analysts Thursday. The company announced a year ago that McCain would be stepping down after taking the top job in 1998.

"Our vision to be the most sustainable protein company on Earth is inspiring and enduring. I could not be more thankful or prouder of the team that we have the resilience that they've shown over decades," he said. 

The remarks came as Maple Leaf reported a loss in its first quarter compared with a profit a year ago as it faced a difficult pork market, cost inflation and higher startup expenses. McCain said on the call that some of the post-pandemic difficulties the industry has faced are starting to abate. 

The company said Thursday it lost $57.7 million or 48 cents per share for the quarter ended March 31 compared with a profit of $13.7 million or 11 cents per share in the same quarter last year.

Sales in the quarter totalled $1.17 billion, up from $1.13 billion in the first three months of 2022.

The company said the increased revenue came as sales in its meat protein group rose to $1.14 billion compared with $1.09 billion in the same quarter last year. Plant protein sales fell to $37.4 million compared with $44.9 million a year earlier.

McCain said in a news release that the company's supply chain has made "exceptional progress back to full normalization," and the company has been raising prices to mitigate inflation. 

Maple Leaf is also taking advantage of renewed access to Chinese markets, he said.

McCain also said that the company hopes to achieve neutral adjusted earnings before interest, taxes, depreciation and amortization on its plant protein business this year.

"Our objective is for the plant protein business to be highly profitable," he said on the call with analysts. 

McCain said the company has seen demand in China for pork products go up, as European supply contracts. 

On an adjusted basis, Maple Leaf said it lost 12 cents per share compared with an adjusted profit of three cents per share in its first quarter last year.

Analysts on average had expected an adjusted loss of 10 cents per share and $1.16 billion in revenue, according to estimates compiled by financial markets data firm Refinitiv.

Analyst Irene Nattel at RBC Capital Markets said in a note that Maple Leaf's meat and plant protein businesses delivered marginally better results than forecast. 

Shares in the company were up almost 10 per cent Thursday at $27.43.

This report by The Canadian Press was first published May 11, 2023.

'BlackBerry' pockets rave reviews as tech leaders say phone story doesn't ring true

“BlackBerry” director Matt Johnson is enjoying the controversy simmering around his latest film.

Over the past month, some of the most influential people in Canada’s technology and business circles settled into sneak preview screenings of his darkly comedic spin on the rise and fall of the beloved Waterloo, Ont.-created smartphone.

And many emerged deeply confounded by what they saw.

After one Toronto viewing a week ago, a group of former employees at BlackBerry-maker Research In Motion gathered over drinks to discuss a mixture of Canadian pride and confusion they were feeling about the film's revisionist history of the company. 

As "BlackBerry" heads to theatres nationwide this weekend, amid heaps of buzz and critical raves, the film faces its share of sour notes from those unhappy with how freely — some say even carelessly — it plays with the truth.

Earlier this week, RIM’s former chief financial officer Dennis Kavelman published an opinion piece in the National Post calling the film an “obvious, lazy portrayal of tech bro culture” that “seems to go out of its way to diminish and tarnish the legacy of the founders and employees of one of Canada’s great technology stories.”

And a recent 18-minute YouTube video by former RIM employee Matthias Wandel – who also served as one of the production's consultants – ripped apart the accuracy of the movie trailer without having seen the film itself.

“Look, the fact that a Canadian movie is even getting this kind of attention is a miracle,” the director said last month during a run of press interviews.

“(That) there would be some comment on accuracy in portrayal or whatever, to me, is a compliment.”

Understanding Johnson's "BlackBerry" requires knowing a bit about his work with co-writer Matt Miller. Together, they're a pair of cinematic pranksters who crashed NASA disguised as a documentary crew for their 2016 film "Operation Avalanche" and blended fictional characters with real scenarios in their TV comedy "Nirvanna the Band the Show."

"BlackBerry" is very loosely based on “Losing the Signal,” a 2015 book by reporters Jacquie McNish and Sean Silcoff. The film effectively takes their facts and feeds them through a paper shredder before reassembling the jagged remnants of familiarity.

Johnson's movie is less interested in the finer details of a Canadian business story than he is in following a group of underdogs whose great idea changed the world and then vanished almost as quickly as they were blinded by success.

Former co-CEO Jim Balsillie is played by "It's Always Sunny in Philadelphia" actor Glenn Howerton as a nefarious troublemaker. His business partner Mike Lazaridis is portrayed by Ottawa-born Jay Baruchel as a socially inept visionary.

Johnson rounds out the trio of leads as RIM co-founder Doug Fregin, a composite of various RIM employees and elements of fiction.

The actors had not met Balsillie and Lazaridis before or during the film's production.

Both Howerton and Baruchel are receiving praise from audiences and befuddlement from those who knew the real co-CEOs and say they missed the mark by a mile.


Johnson sums up the negative feedback from former RIM staff as what you might hear from people with an idealized sense of self, unwilling to see their actions as the rest of the world does.

“Everybody’s John Wick in their head,” added a mildly agitated Baruchel, tipping to the invincible action hero.

Some of the film's pre-release attention surrounded Howerton's portrayal of Balsillie as a firebrand leader with equally ambitious and volatile tendencies. He took the role with the mindset of playing “a man who always thought he was the smartest guy in every room.”

“In order to be someone like Jim, with the amount of drive that he has, you have to be trying to fill some sort of a hole of neglect,” Howerton said.

“I don’t know if that actually exists for Jim," he added.

Even though he is the target of the film's greatest misinformation — at one point directly suggesting he's a criminal — the real-life Balsillie has been surprisingly eager to play along.

He called Howerton's portrayal a "roast" in a recent interview with The Canadian Press, a sentiment he's echoed at select appearances tied to the film's release. But he's also pointed to finer details he wished the filmmakers got right, including the design of his office.

Johnson, who candidly acknowledges the film would've probably benefited more from an agitated Balsillie in the press, takes the businessman's diplomatic stance as a sign he's secretly stung over how he appears in the movie.

“Jim, we really got you, my friend — I know it hurts, but that’s you," he said, addressing an absent Balsillie.

"It may not be the you that you lived day-to-day but it is the character of you sucked from history and put in a painting."

More surprises could be in store with the BlackBerry story following the theatrical release. An extended three-part episodic version of the film will air on CBC later this year.

In the meantime, Johnson is looking at various markers to determine whether "BlackBerry" is a success. One of them he might not even hear about.

"It’ll be if the next time Jim sees somebody in the street for real," he said.

"(And they say,) 'Hey, Jim Balsillie, I saw a movie about you.'"

This report by The Canadian Press was first published May 12, 2023.


'BlackBerry' film hails the must-have gadget that the iPhone turned into a forgotten relic

Almost everyone knows Steve Jobs' uncanny vision, relentless drive and technological wizardry hatched the iPhone, a breakthrough that continues to reshape culture 16 years after the late Apple co-founder introduced the device to the world.

But when Jobs unveiled the first iPhone in 2007, another smartphone was the must-have gadget. It was the BlackBerry, a device so addictive that it became known as the “CrackBerry” among tech nerds and power brokers hunched over a tiny keyboard that was best operated with both thumbs clickety-clacking.

Now the BlackBerry is “that phone people had before they bought an iPhone," a relic so irrelevant that the Canadian company that made it is now valued at $3 billion — down from $85 billion at its 2008 peak when it still controlled nearly half of the smartphone market.

But its legacy is worth remembering — and audiences will get a chance to learn more about its origins in the new film, “BlackBerry." The film out Friday in theaters is the latest movie or TV series to delve into technology's penchant for groundbreaking innovation, blind ambition, ego clashes and power struggles that turn into morality tales.

That formula has already spawned two Academy Award-nominated movies written by Aaron Sorkin, 2010's “The Social Network” delving into Facebook's founding and 2015's “Steve Jobs,” dissecting the Silicon Valley icon. Then came last year's flurry of TV series examining the scandals enveloping WeWork ("WeCrashed"), Uber ("Super Pumped") and disgraced Theranos CEO Elizabeth Holmes ("The Dropout"), which won Amanda Seyfried an Emmy for her turn in the starring role.

Unlike any of those biopics, “BlackBerry” is told as a dark comedy revolving around two amiable but bumbling nerds, Mike Lazaridis and Doug Fregin, who can't seem to execute their plan to create a “computer in a phone” until they bring in a hard-nosed, foul-mouthed businessman, Jim Balsillie.

Although “BlackBerry" is based on a meticulously researched book called “The Lost Signal,” director and co-star Matt Johnson acknowledged taking more liberties in the movie during an interview with The Associated Press. Among other changes, Johnson cited shifting some timelines, shaping the company culture through his view of the 1990s and infusing the key characters with "our own personalities and our own ideas.

“But our lawyers wouldn’t let us put anything in the film that was an outright fabrication,” Johnson stressed.

Johnson had to do a lot of guesswork in his role as the enigmatic Fregin, who sold all his stock in BlackBerry's holding company — then known as Research In Motion, RIM — around the same time Apple released the first iPhone and has kept a low profile ever since.

“Doug is true cipher, he has never done a taped interview," said Johnson, which led him to portray Fregin as a “kind of mascot figure who is tying the culture of the office together.”

Ironically, Johnson got a lot of his idea on how to depict Fregin from one of RIM's early employees, Matthias Wandel, who posted a YouTube video critiquing inaccuracies that he saw in the “BlackBerry” trailer. Before that, Wandel talked extensively to Johnson about RIM's history and even provided diaries that he kept while during the BlackBerry's development.

“I think when he sees the film he is going to be quite charmed by how much of his original notes are in the film,” Johnson said of Wandel. “It’s so funny that he has released that video (because) so much of my character is based on him. I stole everything from that dude. I owe him huge.”

Balsillie, RIM's co-CEO with Lazaridis, emerges as the film's most intriguing character. Actor Glenn Howerton (best known for his role in the TV series, “It's Always Sunny In Philadelphia”) portrays Balsillie in a way that casts him as both the story's chief antagonist and protagonist dropping f-bombs in tyrannical temper tantrums at the same time he is making savvy moves that turned the BlackBerry into a cultural sensation.

“It always felt like this was a guy who weirdly felt a little outside of sort of what people would consider to be sort of a titan of technology or business,” Howerton said of Basillie during an AP interview. “I played him as someone who had something to prove at almost all times, that he could play with the big boys.”

Balsillie eventually became entangled in legal problems tied to improper changes to the pricing of stock options — a tactic known as “backdating” that also ensnared Apple's former general counsel and former chief financial officer in 2007 for their handling of compensation packages awarded Jobs. Both Balsillie and Lazaridis left RIM in 2012.

Now that BlackBerry has faded from the public consciousness, Balsillie seems to be welcoming the renewed attention from the new film even though he quibbled with some aspects of his character during a recent interview with The Canadian Press.

Unlike Lazaridis and Fregin, Balsillie attended a recent showing of the film in Toronto and even walked the red carpet with Johnson and Howerton.

“In many ways, (Jim) was the hero, he was the character who changed for the better (in the film),” Johnson said. “The audience was just with him. It was almost a psychedelic experience to be in theater watching the movie with Jim, with Jim being the person who was laughing the loudest.”

Balsillie, who is mocked in one of the film's scenes for having never seen “Star Wars,” confided to Howerton that he enjoyed watching “BlackBerry” so much that it was the first movie he had ever seen twice in his life.


Cast of 'BlackBerry' film discuss the company's rise and fall

BlackBerry’s rise to prominence has had lasting impacts on today’s technology industry, and the company’s ultimate downfall tells a compelling story, according to cast members of the upcoming “BlackBerry” film.  

In an interview with BNN Bloomberg on Friday, Jay Baruchel and Glenn Howerton spoke about their respective roles in the film that chronicles the history of the Waterloo-based technology company. 

“The world that we live in today rests in large part on the shoulders of what these nerds did in Kitchener at the end of the 90s,” Baruchel said. 

In the film, Baruchel portrays Research In Motion Inc. (RIM) co-CEO Mike Lazaridis, and Howerton plays the role of Jim Balsillie, the other RIM co-CEO.  

“Their (BlackBerry’s) end is somewhat tragic, at least narratively, because they went from almost half the market share to zero after the advent of the iPhone,” Baruchel said. 

Baruchel said the story of the rise and fall of the Canadian technology company has all the elements of a good story, as well as “utter anonymity,” which he said is a “chronically Canadian thing.” 

“They're not household names, I think there's often a cult of personality around tech titans and innovators. For the most part, these guys are still under the radar,” he said. 

Howerton said key aspects of the film deal with the process of getting the BlackBerry smartphone to market.

“These guys were in a race the entire time to beat other people who are trying to do the exact same thing,” Howerton said. 

“I think that's part of the thriller aspect of the film, is watching, ‘How do we get this thing to market before somebody beats us?’” 

NOSTALGIA 

BlackBerry devices surged in popularity following the release of its first smartphone in 2002, but some now see the device as nostalgic. 

“It’s one of these products that seems to still occupy quite a sentimental and nostalgic bit of real estate in a lot of people's minds and certainly the people that used them,” Baruchel said. 

The device had a culture of its own, according to Baruchel.

DRAMA NOT DOCUMENTARY 

Howerton said he was set to meet Balsillie for the first time Friday night ahead of the film’s scheduled release on May 12.

Baruchel said that Balsillie appears to understand the movie is “not a documentary,” but rather a drama. 

“I believe certainly artistically, that there's a distinction between accuracy and truth. The larger sort of philosophical truth and the emotional truth of the story trumps absolutely everything,” Baruchel said. 

Canada 'extremely concerned' about fate of Line 5 pipeline in Wisconsin, embassy says

Canada is "extremely concerned" about the potential fate of the Line 5 pipeline, emissaries warned Tuesday in advance of a Wisconsin court hearing that threatens to shut down what they call a vital cross-border oil and gas corridor. 

The warning from Canada's embassy in Washington, D.C., comprised Ottawa's first formal comments about the pipeline in months — a lengthy, measured statement that nonetheless made plain its fears for Line 5's future. 

And it leaned hard into three areas always sure to get attention in the U.S.: protecting American jobs and growth, defending continental energy security and honouring treaty obligations to an important and trusted ally. 

"The energy security of both Canada and the United States would be directly impacted by a Line 5 closure," said the statement from the Canadian Embassy in D.C. 

"At a time of heightened concern over energy security and supply, including during the energy transition, maintaining and protecting existing infrastructure should be a top priority."

The economic argument is one the pipeline's proponents have been making for years: a shutdown would cause "significant economic disruption" across the U.S. Midwest, where it provides feedstock to refineries in Michigan, Ohio and Pennsylvania. 

Line 5 also supplies refineries in Ontario and Quebec, and is vital to the production of jet fuel for some of Canada's busiest airports. Some 33,000 U.S. jobs and US$20 billion in economic activity would be imperilled, the embassy warned. 

The source of the alarm is a court dispute in Wisconsin between the pipeline's owner, Alberta-based Enbridge Inc., and the Bad River Band of the Lake Superior Chippewa, through whose territory Line 5 runs. 

Spring flooding has washed away significant portions of the riverbank where Line 5 intersects the Bad River, a meandering, 120-kilometre course that feeds Lake Superior and a complex network of ecologically delicate wetlands.

The band has been in court with Enbridge since 2019 in an effort to compel the pipeline's owner and operator to reroute Line 5 around its traditional territory — something the company has already agreed to do. 

But the flooding has turned a theoretical risk into a very real one, the band argued in an emergency motion last week, and it wants the pipeline closed off immediately to prevent catastrophe.

"There can be little doubt now that the small amount of remaining bank could be eroded and the pipeline undermined and breached in short order," the band's lawyers argued.

"Very little margin for error remains."

Line 5 meets the river on Indigenous territory just past a location the court has come to know as the "meander," where the riverbed snakes back and forth multiple times, separated from itself only by several metres of forest and the pipeline.

At four locations, the river was less than 4.6 metres from the pipeline — just 3.4 metres in one particular spot — and the erosion has continued in recent days at an "alarming" rate, the motion said.

In one case, so-called "monuments" installed to measure the losses show that where there was more than 10 metres of riverbank in early April before the flooding began, only 3.7 metres remained as of last Tuesday.

"Significant erosion is continuing as of the filing of this motion, and the evidence strongly suggests that further bank loss could be substantial and result in exposure and rupture of the pipeline."

Wisconsin district court Judge William Conley is expected to hear oral arguments on the motion Thursday. It's not clear if he'll reserve judgment or rule immediately whether to order Enbridge to shut down the pipeline and purge its contents.

But Conley has already indicated a reluctance to shut down the pipeline, citing the potential economic and foreign-policy consequences, suggesting Tuesday's statement from the embassy was aimed squarely at him. 

"I think Canada is saying, 'Please be aware,'" said Kristen van de Biezenbos, a professor of energy law at the University of Calgary. 

Because there are no alternatives to Line 5 for shipping fossil-fuel energy to Ontario and Quebec, the stakes of a shutdown would likely be higher for Canada than for the U.S., she added. 

"Even knowing that it's not a great idea to be largely dependent on just one source of oil, there hasn't been anything done to change that," van de Biezenbos said. 

"It would be a serious problem for Canada if Line 5 was shut down — not just because of the wider economic impacts for the oilpatch in Alberta, but also because that is the main source of crude oil products for eastern Canada." 

Later Tuesday, lawyers for Enbridge began filing a raft of affidavits and sworn statements from pipeline safety experts, scientists, environmental engineers and even the company's own director of tribal engagement, all in opposition to the request for an injunction. 

One of them, from a Vancouver hydrologist named Hamish Weatherly, acknowledged that the threat of a rupture caused by erosion is higher than it was at the end of last year, but still far from critical. 

"It is thus my opinion based on my knowledge, training and experience that there is not an 'emergency' or 'imminent threat' of a release at the meander," Weatherly's declaration reads. 

A separate declaration from David Stafford, the company's U.S. pipeline compliance manager, said the U.S. Pipeline and Hazardous Materials Safety Administration has been kept apprised of all the latest developments. 

"Since receiving notification of the erosion at the meander, PHMSA has not expressed any concern regarding the safety of Line 5 at this location," Stafford asserts in the document.

Tuesday's filings also included a string of affirmations from senior executives across the Canadian energy sector from companies like Suncor, Cenovus, Imperial Oil, Shell Canada and Superior Gas, among others. 

Canada has already invoked a 1977 pipelines treaty with the U.S. in both Wisconsin and Michigan, where that state's attorney general is also in court trying to get the pipeline shut down. 

Talks under that treaty have been ongoing for months, with the latest session taking place last month in Washington. 

"Canada invoked the treaty's dispute settlement provisions because actions to close Line 5 represent a violation of Canada's rights under the treaty to an uninterrupted flow of hydrocarbons in transit," the embassy said. 

"If a shutdown were ordered because of this specific, temporary flood situation, Canada expects the United States to comply with its obligations under the 1977 Transit Pipelines Treaty, including the expeditious restoration of normal pipeline operations."

The key word there is "temporary," van de Biezenbos said. 

"The pipeline treaty makes it clear that you can order temporary shutdown of international pipelines between the U.S. and Canada for public safety reasons," she said.

"If there is a shutdown that's ordered because of the flooding, then as soon as the flood risk has been abated, then the pipeline has to be brought back online."

This report by The Canadian Press was first published May 16, 2023.

 

Lower child-care fees could see 100,000 more Ontario women in workforce: report

Ontario has the potential to see nearly 100,000 more women enter the labour market due to $10-a-day child care, but only if the province creates more daycare spaces, a report from the Financial Accountability Office said Tuesday.

Labour participation rates for mothers with children under six years old, the ages covered by the national child-care program, increased by 2.4 percentage points just from 2021 to 2022, the first year the reduced fees started taking effect, the report said.

Once fully rolled out, the $10-a-day child-care program in Ontario could increase labour market participation for women aged 25 to 54 from 84 per cent in 2022 to between 85.6 per cent and 87.1 per cent by 2027, adding up to 98,600 women to the workforce, the FAO said.

However, the 71,000 new child-care spaces promised by Ontario under the federal agreement won't nearly be enough to meet the demand for care, and if the government doesn't create more spaces it will offset some of the positive labour market impacts, the report warned.

Education Minister Stephen Lecce said that's why the deal with Ottawa includes an agreement to review any deficits that emerge halfway through the rollout, which will allow Ontario to ask for more funding in order to create more spaces and meet demand.

"You may recall, before we signed the deal with the federal government, we said, 'Look, we do think there's going to be some shortages to the federal contributions,'" Lecce said.

He believes additional funding from Ottawa would allow the province to create enough child-care spaces to accommodate the rising demand.

"We've had a constructive relationship with the federal government on this issue," he said. 

"At the end of the day, this has to be a bipartisan priority, when it comes to creating more affordability and reducing barriers for women to work in the economy." 

The FAO has calculated that increased demand for affordable care will leave the province short more than 220,000 spots.

Child-care advocates, operators and early childhood educators say a key component of expansion will be addressing current staff shortages and introducing stronger recruitment and retention policies. 

Lecce said he has completed a workforce stabilization strategy that he will unveil "in due course" that includes "more competitive packages." 

"We've got amazing early childhood educators and I'm thrilled that we're going to provide them even more incentives to stay."

The ministry estimated in documents from the beginning of the workforce consultations that Ontario would need about 14,700 new registered early childhood educators by 2025-26 but would fall about 8,500 short without further actions on recruitment and retention.

As part of Ontario's deal with the federal government, the province set a wage floor for RECEs — $18 an hour in 2022 and increasing by $1 a year up to $25. 

The Association of Early Childhood Educators of Ontario has called for an immediate $30-and-hour minimum wage for RECEs and $25 for the many non-RECE child-care workers. They would also like to see the implementation of a wage grid as an incentive to keep workers in the sector.

The FAO report also finds that labour market participation for women with young children lags significantly behind that of men with young children — a gap more than four times wider than among workers without young children.

As well, the FAO says that the gender wage gap, which sees women earn on average 87 cents for every dollar earned by men, has not improved in a decade.

This report by The Canadian Press was first published May 16, 2023.

Accounting errors, overspending lead Canopy Growth to sour on its $50M BioSteel investment


When Canopy Growth Corp. announced it took a controlling stake in a near-insolvent BioSteel Sports Nutrition Inc. nearly three years ago to help make a line of CBD-infused sports drinks, investors cheered the move, pushing its stock up as much as five per cent that day.

Now, that same investment has suddenly emerged as an albatross for the stumbling cannabis player, forcing Canopy to announce the embarrassing move of restating its financial statements for its 2022 fiscal year while former employees paint a picture of a dysfunctional organization rife with overspending.

Late Wednesday, Canopy released a filing stating a review of BioSteel's sales in 2022 found numerous "material misstatements" and accounting errors in its financial statements for its 2022 first-quarter, second-quarter, and third-quarter results as well as its audited statements for the fiscal year ended 2022, which should no longer be relied upon. It said it will re-file those statements as soon as possible, a company spokesperson said.

In addition to that revelation that sent Canopy's stock plunging by more than 14 per cent on Thursday, the company's once-lauded acquisition has been caught in a sweeping re-organization that's seen its co-founder John Celenza ousted following a testy exchange with Canopy's Chief Executive Officer David Klein in March, two people familiar with the situation told BNN Bloomberg.

Celenza -- who started BioSteel in 2009 with former NHL star Mike Cammalleri to find a nutritional recovery drink that wouldn't fall afoul of new NHL drug testing rules -- was described by one source as a high-energy leader who clashed with Klein. Canopy acquired a 72 per cent stake in BioSteel in Oct. 2019 for $50.7 million.


Celenza declined to comment when reached by BNN Bloomberg. A Canopy spokesperson declined to comment on Klein’s relationship with Celenza.

Sources who worked for BioSteel and its partners described the working environment at the company as chaotic and, at times, disorganized.  While the specific nature of the arguments between the executives is not fully known, sources said BioSteel's spending plans often clashed with Canopy's need to rein in costs within its struggling cannabis ventures.

While BioSteel's revenue has purportedly climbed 56 per cent in 2022 to $44.6 million, a rare bright spot in Canopy's floundering Canadian cannabis business, those sales may have come at a steep cost with costly endorsement deals awarded to a slew of NHL, NFL, MLB, and NBA players, the source said. Industry sources suggested endorsement deals with well-known athletes could start at $100,000, while contracts with professional teams could often be at least triple that amount.

A Canopy spokesperson declined to confirm whether Celenza was part of a recent wave of BioSteel departures that saw about 20 staff leave the company, citing a policy where they do not comment on individual departures. Those staff cuts were tied to an announcement Canopy made in February that it would transition to an asset-light model and close its Smiths Falls, Ont. headquarters. That announcement also reaffirmed management's expectations that those recent closures would result in positive adjusted EBITDA in its fiscal 2024, with the noted exception of its BioSteel business.

Canopy's review of its BioSteel business also comes at an inopportune time for the beleaguered cannabis company. Aside from reporting a $2.6 billion loss so far this current fiscal year, Canopy is also looking to secure shareholder support for its plan to ring-fence its U.S. investments and tack them onto its balance sheet.

Due to U.S. and Canadian regulatory restrictions tied to cannabis investing, Canopy hasn't formally acquired the three U.S. cannabis companies to which it has staked claims. It has pushed back a shareholder vote needed to begin the process of converting its stock to exchangeable shares needed to create the new U.S.-domiciled holding company which will control its U.S. cannabis investments.

That plan was seen as a way for Canopy to curry back investor support, specifically from institutional players at a time when U.S. Congress continued to delay any momentum on pro-cannabis legislation. As a result, Canopy's stock now trades at a level not seen since August 2015, a 98 per cent drop from its all-time high.

Citi's Clark says inflation cements her outlier call for June rate hike in Canada

The only economist in a Bloomberg survey who’s forecasting an interest-rate hike at the Bank of Canada’s next meeting is confident the latest inflation data prove she’s right. 

Even before Tuesday’s unexpected acceleration in headline inflation, Citigroup Inc.’s Veronica Clark had been predicting the central bank would raise borrowing costs by 25 basis points on June 7. Tuesday’s consumer price figures have cemented her call — and she’s surprised other economists have yet to change their forecasts. 

“The Bank of Canada is literally saying we’re waiting to see if we’ve done enough, and none of the data is telling you that you’ve done enough. I’m trusting what they say,” Clark said in a phone interview. “It’s been hard for markets to imagine another hike in Canada. But the Bank of Canada is first and foremost an inflation-targeting central bank, and inflation looks sticky, strong and much higher than 2 per cent.”


Rates markets reacted quickly to the unexpectedly hot inflation print. Swaps traders are now placing bigger bets on a hike in June or July and have reduced the odds of a rate cut in 2023 to zero. Just a week ago, traders were pricing in as many as two cuts over the next 12 months. 

The Bank of Canada raised its benchmark overnight rate eight straight times to 4.5 per cent before signaling a conditional pause in January. While Clark is currently the only economist among 28 forecasters in the survey who expect a hike next month, others have started flagging rising chances that policymakers will soon be pulled off the sidelines. 

“There is a highly compelling case for returning with a hike at the June meeting and if not then July’s odds go up,” Derek Holt, an economist with Bank of Nova Scotia, said in a report to investors. “I would assign high market probability to a June hike with info to this point.”

For Clark, the substantial upside surprise to April’s consumer price index signaled to markets that there’s a “distinct possibility” the bank needs to hike again after holding for two straight meetings. She also said surging home prices present a “clear risk” that inflation could accelerate further. 

Since the Bank of Canada’s first move in this tightening cycle in March 2022, Clark was right nine out of 10 times. Her only miss was in July, when the bank surprised markets with a full percentage-point increase to borrowing costs versus her call for a 75 basis-point hike.

Growing number of Canadians rely on credit cards to pay for essentials: Survey

A growing number of Canadians have turned to their credit cards as a means to cover essential items within the past year, a NerdWallet survey released on Monday revealed.

Seven in 10 Canadians (70 per cent) said they have used credit to pay for essentials items, including groceries and utilities, within the past 12 months, the data showed. Alternatively, one in three survey respondents (33 per cent) said they have redeemed credit card rewards to pay for mandatory items.

Of those who reported a change in their credit card habits in the last year, 68 per cent said it was because of the increased costs of goods and services.

While inflation in Canada has begun to cool, the latest consumer price index read showed an unexpected rise. In April, inflation rose 4.4 per cent annually, according to Statistics. The data was hotter than economists had forecasted. 

In this environment, of the Canadians who use a credit card, only 58 per cent reported paying the balance in full every month. Another 40 per cent said it will take them six months or longer to pay off all their debt while another 11 per cent said they were unsure as to how long it will take them to clear their consumer debt.

The survey showed Generation Z (53 per cent), aged 18 to 26, was less likely to rely on their credit to pay for essential costs of living in comparison to Generation X (76 per cent) aged 43 to 58.

Methodology: This survey was conducted online by The Harris Poll on behalf of NerdWallet from April 3-5, 2023 among 1,025 Canadian adults ages 18 and older. The study sample data is accurate to within +/- 3.8 percentage points using a 95% confidence level.