Telus pauses fibre optic network rollout across Alberta, blaming Ottawa's Huawei ban

Sammy Hudes, The Canadian Press

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.

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."

This report by The Canadian Press was first published June 13, 2023.

Air Canada pilots kickstart bargaining, hot on heels of WestJet crew wage gains

Christopher Reynolds, The Canadian Press

People look on as an Air Canada plane takes off at Trudeau Airport in Montreal, Sunday, June 11, 2023. THE CANADIAN PRESS/Graham Hughes

Air Canada pilots have kickstarted the bargaining process with their employer in a move that comes days after their fellow union members at WestJet ratified a new collective agreement.

Representing about 4,500 employees, the Air Line Pilots Association's Air Canada contingent said it has provided a bargaining notice to company management, the first step toward hashing out a new deal.

The decision comes two weeks after the pilots' group invoked a clause to end its 10-year collective agreement a year early and launch negotiations for a new one.

Key issues include a widening wage gap between Canadian pilots and their U.S. counterparts as well as job security and career progression, said Charlene Hudy, who heads the contingent.

“The Air Canada pilots have not been in a meaningful negotiating position since 2014, and in these negotiations we are striving for a historic contract for our Air Canada pilots to address this growing disparity between the United States and Canada,” she said in a statement.

The current deal will remain in force until Sept. 29 and its provisions will still apply after that date.

"Such negotiations usually take months, and this is just the beginning," said Air Canada spokesman Peter Fitzpatrick in an email.

“The current agreement, which has been in place for nearly a decade, is a testament to the productive relationship we have with our pilots. We expect the upcoming negotiations to be conducted in this same spirit."

Since landing on a deal in 2014, Air Canada pilots have received a two per cent pay hike each year.

The union's move comes after 1,800 pilots with WestJet and budget subsidiary Swoop ratified a new agreement that brings them onto a level pay scale, giving flight crews a 24 per cent wage bump over four years and resulting in Swoop's shutdown at the end of October.

Experts say the deal sets a new standard in Canadian aviation that will put pilots closer to U.S. pay levels and raise costs for airlines still recovering from hundreds of millions of dollars in losses during the pandemic.

The pending Air Canada talks also arrive as airlines face intense domestic and cross-border competition from ultra-low-cost carriers such as Flair Airlines and Lynx Air.

Labour shortages continue to plague the aviation industry as the sector emerges from COVID-19 and the past year's travel turmoil, with a dearth of workers in areas ranging from air traffic control to ground handling.

In March, Delta Air Lines pilots secured a deal that includes a 34 per cent pay hike over four years.

American Airlines pilots authorized a strike amid contract negotiations last month before reaching a preliminary deal.

United Airlines pilots are also in the middle of talks, pushing for even higher pay than their Delta counterparts, as well as comparable quality-of-life provisions.

This report by The Canadian Press was first published June 13, 2023.

Canada's population reaches 40 million

WE'RE AS BIG AS CALIFORNIA

June 17, 2023

Canada's population reached a milestone of 40 million as of June 16, 2023, Statistics Canada announced Friday.

Canada's population is currently growing at a record-setting pace. In 2022, the number of Canadians rose by 1,050,110, which marks the first time in Canadian history that the population grew by over 1 million people in a single year with the annual growth rate reaching 2.7 percent.

While the previous growth rate record in the 1950s was mostly attributed to the high number of births during the post-war baby boom, international migration accounted for nearly all growth recorded in 2022, the national statistical agency said.

Canada is by far leading the G7 countries for population growth and this has been the case for the last two decades, the agency said.

If this rate of population growth was to stay constant in the years to come, the Canadian population could double in about 26 years, Statistics Canada said.

How population growth is affecting everything from jobs to housing in the economy

Nojoud Al Mallees, The Canadian Press

Rapid population growth is challenging economists' understanding of the economy as they monitor how businesses and consumers are responding to high interest rates.

The Canadian economy has outperformed expectations so far this year, avoiding the slowdown many forecasters were anticipating in response to the Bank of Canada's aggressive rate hikes. The resilience of the Canadian economy prompted the central bank to raise interest rates again last week, saying that the risk of sticky inflation has risen.

But a closer look at the numbers shows high population growth is partly responsible for the strong economic results, potentially propping up the housing market at a time when high interest rates are supposed to suppress demand.

Here's how population growth is affecting jobs, growth and the housing market: 

JOBS

The Canadian labour market made a remarkable recovery post-pandemic and continued to add jobs even as interest rates began climbing last year.

But much of the growth in employment can be attributed to immigration. 

In 2022, Canada's population grew by more than one million people, setting a new record as the country welcomed more immigrants. The influx of people in the country has increased the labour force, which grew by 200,000 last year. Employment also rose rapidly as the economy added 400,000 jobs.

BMO chief economist Douglas Porter said the strong population growth is making economists like himself reconsider what a normal monthly jobs report should look like. Before the pandemic, the Canadian economy would add 10,000 to 15,000 jobs in a typical month, he said. 

"Now, it's more like 25,000. That's almost what we need in a month just to keep the unemployment rate from rising," Porter said. 

University of Waterloo economics professor Mikal Skuterud said headline figures — such as the number of jobs added — aren't always the most useful for understanding how well the economy is doing for the average person, especially amid strong population growth. 

"Employment levels are going to be increasing a lot, just because we're adding a lot of people to the population. But I don't think that tells us necessarily very much about the health of labour markets," Skuterud said.

ECONOMIC GROWTH

Higher population growth is also increasing the size of the economic "pie" as more people find jobs and spend money on goods and services. 

During the first quarter of the year, real gross domestic product — which measures the size of the economy — grew at an annualized rate of 3.1 per cent.

Consumer spending was also up considerably, rising at a whopping 5.7 per cent annualized rate.

While population growth doesn't account for all of the boost in economic activity, Porter said the rate of population growth should be somewhat taken into account when looking at growth figures. 

"We should also be at least somewhat keeping in mind what the underlying growth rate of the population is before we get all excited about two per cent growth, and it's the population is growing at two per cent. It's really not impressive," Porter said. 

To gauge how well the economy is going for the average person, economists tend to prefer looking at real gross domestic product per capita. That figure remained flat between the last quarter of 2022 and the first quarter of 2023. 

HOUSING

As the Bank of Canada looks to rebalance demand and supply in the economy, economists and the central bank are generally unsure what the net effect of higher immigration will be on inflation. 

But Royce Mendes, managing director and head of macro strategy at Desjardins, argues that population growth is interfering with the Bank of Canada's efforts by propping up demand in the housing market. 

"(Higher immigration is) coming with a side-effect of blunting the impact of monetary policy in terms of its effect on the housing market," Mendes said. 

Activity in the housing market slowed down significantly last year as the Bank of Canada started raising interest rates. More recently, however, the housing market appears to have levelled off as demand surges again.

A recent analysis by BMO found that for every one per cent of population growth, housing prices typically increase by three per cent. The finding has implications both for housing affordability, and the Bank of Canada's efforts to get inflation under control. 

In an interview with The Canadian Press last week, Bank of Canada deputy governor Paul Beaudry conceded that higher immigration may be blunting the effect of higher interest rates on the housing market. 

"We know that a big part of the housing market problem in Canada is the lack of sufficient supply," said Beaudry. "So having a lot of people coming in, and … not managing to kind of build enough is certainly creating a lot of that problem." 

This report by The Canadian Press was first published June 13, 2023.

Google should break up digital ad business over competition concerns, European regulators say

Kelvin Chan and Samuel Petrequin, 

The Associated Press   Jun 14, 2023

The Google logo is seen at the Vivatech show in Paris in Paris, France, Wednesday, June 14, 2023. 

(AP Photo/Thibault Camus)

BRUSSELS — European Union regulators hit Google with fresh antitrust charges Wednesday, saying the only way to satisfy competition concerns about its lucrative digital ad business is by selling off parts of the tech giant's main moneymaker.

The unprecedented decision to push for such a breakup marks a significant escalation by Brussels in its crackdown on Silicon Valley digital giants, and follows a similar move by U.S. authorities seeking to bust Google's alleged monopoly on the online ad ecosystem.

The European Commission, the bloc's executive branch and top antitrust enforcer, said its preliminary view after an investigation is that “only the mandatory divestment by Google of part of its services” would address the concerns.

The 27-nation EU has led the global movement to crack down on Big Tech companies — including moving closer to groundbreaking rules on artificial intelligence — but it has previously relied on issuing blockbuster fines, including three antitrust penalties for Google worth billions.

It is the first time the bloc has told a tech giant that it should split up key parts of its business over violations of the EU's strict antitrust laws, though details on what that could look like are not clear following the preliminary finding.

Google can now defend itself by making its case before the commission issues its final decision. The company said it disagreed with the finding and “will respond accordingly,” adding that the EU’s investigation focused on a narrow part of its ad business.

“Our advertising technology tools help websites and apps fund their content, and enable businesses of all sizes to effectively reach new customers," said Dan Taylor, Google vice president of global ads. "Google remains committed to creating value for our publisher and advertiser partners in this highly competitive sector."

The commission's decision stems from a formal investigation that it opened in June 2021, looking into whether Google violated the bloc’s competition rules by favoring its own online display advertising technology services at the expense of rival publishers, advertisers and advertising technology services.

Online display ads are banners and text that appear on websites such as newspaper home pages and are personalized based on an internet user’s browsing history.

European Commission Vice President Margrethe Vestager says Google is dominant on both sides of the ad-selling market. Google abused that position by favoring its own ad exchange, reinforcing its ability to charge a high fee for its services, the commission said.

“Google is representing the interests of both buyers and sellers. And at the same time, Google is setting the rules on how demand and supply should meet,” she said at a news conference. "This gives rise to inherent and pervasive conflicts of interest."

Vestager added that if Google sold off, for example, its real-time marketplace for buying and selling ads or a tool for publishers to manage their ads, “we would put an end to the conflicts of interest.”

The commission is seeking a forced sale because past cases that ended with fines and requirements for Google to stop anti-competitive practices have not worked, allowing the company to continue its behavior, “just under a different disguise,” she said.

"This is a big deal" and a sign that the commission has “lost all trust in Google and lost all trust in those behavioral remedies” mandating changes to the way it operates, said Rich Stables, CEO of rival search engine Kelkoo, which was involved in two of the EU's previous Google antitrust cases.

Google's ad tech business is also under investigation by Britain's antitrust watchdog and faces litigation in the U.S. that calls for the company to divest its digital ad tools.

European and U.S. authorities are acknowledging that “the only way to address this egregious conflict of interest is to force Google to divest part of its business,” said Max von Thun, director of the Europe office of the Open Markets Institute, a proponent of stronger antitrust enforcement.

The commission’s move is “a clear illustration of the power competition authorities have when they work in parallel,” he said.

Brussels has previously hit Google with more than 8 billion euros (now US$8.6 billion) worth of fines in three separate antitrust cases, involving its Android mobile operating system and shopping and search advertising services. The company is appealing all three penalties.

EU regulators can impose penalties worth up to 10 per cent of annual revenue and also could fine Google alongside any sale order.

Google brought in $54.5 billion in ad sales and YouTube earned nearly $6.7 billion in ad sales in the first three months of the year, but that marked a back-to-back slump as companies spend more cautiously.

___

Chan reported from London.

Brussels, my love? The EU’s groundbreaking attempt to regulate AI clears its first hurdle

Host Méabh Mc Mahon in the European Parliament in Strasbourg with MEPs Patrick Breyer, Arba Kokalari and Barry Andrews - Copyright Euronews

  

By Méabh Mc Mahon & Elly Laliberte • Updated: 17/06/2023 -

In this edition of Brussels, my love?, we discuss the EU's recent decision to be the first to regulate artificial intelligence. Some parties, however, were not completely happy with the final compromise.

This week we were joined by a panel of MEPs: Patrick Breyer, German MEP from the Pirate Party, Arba Kokalari, Swedish MEP from the Moderate Party, and Barry Andrews, Irish Fianna Fail MEP.

The European Parliament voted on the world’s first comprehensive set of rules for artificial intelligence this week. As the parliament headed for Strasbourg, all eyes were on MEPs for this groundbreaking vote which passed with 499 votes in favour, 28 against and 93 abstentions.

Arba Kokalari was one of the few who voted against the AI regulation, arguing that the regulation of facial recognition technology will hurt Europe

“The vote today from the European Parliament [is] shutting the door on using this very important technique in very specific matters as terrorism, child kidnapping. I think for me that was a red line to vote against,” she said.

However, Patrick Breyer said the regulation is a positive feat. “I think it’s been quite a historic week,” said the German MEP. “The parliament backing a full ban on real-time biometric mass surveillance saves our society from a future of mass surveillance.”

Discussions over implementing this regulation have started in EU capitals and the hope is to have this over the line by the end of the year.

Panelists also discussed the Commission’s proposal for an inter-institutional ethics board. This comes after months of scandal (such as the so-called Qatargate) in an attempt to clean up their image.

However, Barry Andrews believes the ethics board won’t be able to tackle such a large issue. “It was very disappointing,” he said. “The budget is €600,000 with three staff [members]. It's really impossible to see how that would make an impact or that it's proportionate to the problem that is being identified.”

European Parliament debates 'landmark rules' on AI regulation | DW News

 

ALL CAPITALI$M IS STATE CAPITALI$M

Freeland says production subsidies for Volkswagen will be tax-free, matching the U.S.

Nojoud Al Mallees, The Canadian Press

Finance Minister Chrystia Freeland said Wednesday that the federal government plans to make the production subsidies it's offering to Volkswagen tax-free to match the incentives offered by the U.S. Inflation Reduction Act. 

Her comments came after the  parliamentary budget officer published a report saying Canada's contract with the German auto giant to build an electric-vehicle battery plant in southwestern Ontario would cost the federal government up to $16.3 billion over the next 10 years. 

That figure is higher than what Ottawa previously said the deal would cost taxpayers, a sum that included a $700-million upfront capital investment and up to $13.2 billion in production subsidies.

The Parliamentary Budget Office estimate included the $700-million contribution for the construction of the plant and $12.8 billion in production support. 

However, the PBO said that for the production subsidies to be equivalent to the incentives offered by the U.S., the federal government would have to make tax adjustments totalling $2.8 billion. 

That's because the U.S. offers production tax credits that are tax-free, whereas the Canadian subsidies would have to be taxed under current tax legislation.

"The IRA tax credits are not taxable, and so it makes sense that the treatment of our incentives, which are designed to level the playing field, would be comparable. And that is how we will proceed," Freeland told reporters on Wednesday.

She said her government would change current tax legislation to make the subsidies tax-free. 

The PBO report published Wednesday provided a fiscal and economic analysis of the construction phase of the facility only, leaving out the operation phase. 

Yves Giroux, the parliamentary budget officer, said his office is unable to take on analysis of the costs and benefits arising from the operation of the plant until it receives clearance from the federal government and Volkswagen. 

He said the deal includes confidential information regarding minimum production levels that cannot be disclosed directly or indirectly.

"It's very hard to assess without doing further analysis and without being relieved of the confidentiality provisions that cover the production schedule," Giroux said in a media briefing. 

The analysis of the construction phase estimated that the deal would create a peak of 3,100 jobs at the start of 2026, but that figure would fall to 1,400 by the end of 2027.

The federal government announced in April the details of the deal — which would see Volkswagen build its first gigafactory outside of Europe —and promised it would create up to 3,000 direct jobs and 30,000 indirect jobs.

This report by The Canadian Press was first published June 14, 2023

Volkswagen subsidy to cost Canada $1.8bn 

more than forecast

Reuters | June 14, 2023 |

From left: Oliver Blume, CEO VW Group; Thomas Schmall, Group Board Member Technology; Hon. François-Philippe Champagne, Canada’s Minister of Innovation, Science and Industry. (Image courtesy of Volkswagen Group.)

Canada’s budgetary watchdog estimated on Wednesday that a deal offering Volkswagen production tax credits to build a battery gigafactory in the country will cost taxpayers about C$2.4 billion ($1.8 billion) more than announced.


The forecast comes as the government tries to sweeten a subsidy deal for Jeep maker Stellantis, which stopped construction at a more-than C$5 billion electric vehicle (EV) battery plant in Ontario, saying Ottawa had reneged on promises.

Canada and German carmaker Volkswagen in April together committed more than C$20 billion for the planned Ontario plant, the biggest single investment in the country’s EV supply chain.

This included up to C$13.2 billion in manufacturing tax credits through 2032 and a C$700 million federal grant.

In a review of the deal, Parliamentary Budget Officer (PBO) Yves Giroux said the tax credits would end up costing a bit less than estimated, but Ottawa would need to make about C$2.8 billion in tax adjustments to ensure Volkswagen gets the support it was promised.

Commenting on the report, Finance Minister Chrystia Freeland said that the Volkswagen investment was “fully accounted for” in her budget.

The point of difference stems from the investment’s tax treatment, which Freeland said was because Canada was trying to compete with the US Inflation Reduction Act’s (IRA) non-taxable incentives for clean-tech incentives.

“When the IRA came into force … the US frankly had just changed the game and we knew that Canada had to be at the table,” she told reporters in Ottawa.

Under Canadian law, any monetary support a business receives from the government is considered income, and is therefore taxable. To make the deal match IRA subsidies, the federal government would have to forgive the taxes levied, the PBO said.

Canada, home to a large mining sector for minerals including lithium, nickel and cobalt, is trying to woo companies involved in all levels of the EV supply chain as the world seeks to cut carbon emissions.

Giroux said the economic benefits of the construction of the Volkswagen facility “are marginal”, but the PBO did not estimate the benefits of the factory when it is fully operational.

“We are very confident in the value of the VW investment… we are really confident in the value of our green industrial policy,” Freeland said.

($1 = 1.3283 Canadian dollars)

(By Ismail Shakil; Editing by Alexander Smith and Angus MacSwan)

How a strike at B.C. ports could be a 'significant' economic blow

Ben Cousins, BNN Bloomberg   Jun 14, 2023

As more than 7,000 terminal workers at British Columbia ports approach legal strike action, concern is growing about what a job action might mean for the economy.

On Monday, the International Longshore and Warehouse Union Canada voted more than 99 per cent to strike against the B.C. Maritime Employers Association, meaning a work stoppage could begin on June 24 without any progression in negotiations.

Now, experts are sounding the alarm that job action could seriously hurt the economies of not only British Columbia, but Canada as a whole.

“Any kind of slowdown can have significant disputations to our economy,” Bridgitte Anderson, president and CEO of the Greater Vancouver Board of Trade, told BNN Bloomberg Tuesday.

“The impact would be quite far reaching and that is why we’re so concerned about any kind of impact due to labour disruption. It could take days, weeks or months to resolve.”

In addition to snags on the supply chain, Anderson worries job action will hurt Canadians’ wallet in a time of already high inflation. 

“We are held a little bit hostage by what happens at the ports with importing and exporting, and so we're really relying on the two sides to come together and to work to find a solution so that we don’t have any work stoppages,” she said.

On its website, the B.C. Maritime Employers Association acknowledged how “critical” the ports are to Canada’s economy.

“That’s why we’re dedicated to making reasonable efforts to conclude agreements without further disruptions to the supply chain,” a statement reads on the site.

According to the BCMEA, member ports handled $180 billion in cargo in 2020 and contributed $2.7 billion to the national GDP.

Meanwhile, John Corey, president of the Freight Management Association of Canada, said even the threat of job action has repercussions.

“This could be a huge problem,” he said. “Weeks before a strike actually happens, while negotiations are taking place, shippers are looking for alternative routes and the current routes that they have are the most efficient so any other route is less efficient and also more expensive.”

Corey added that the supply chain experiences about seven days of backlog for every day of stoppage.

“The problem right now is the supply chain, there’s no slack in it,” he said. “If there’s any small disruption it takes a long time to clear that out.”

“Being shut down for even a day … is billions of dollars.”

Dan Fong, an investment analyst at Veritas Investment Research, worries a disruption will hurt an already fragile supply chain.

“That’s going to exacerbate a lot of the volume weakness that we’re seeing,” he said.

Bell cuts 1,300 positions, radio stations and foreign bureaus in restructuring

Sammy Hudes, The Canadian Press

BCE Inc. is cutting 1,300 positions, shutting or selling nine radio stations and closing two foreign bureaus as the company plans to "significantly adapt" how it delivers the news in the face of rising financial pressure.

The plan entails "moving to a single newsroom approach across brands, allowing for greater collaboration and efficiency," said Richard Gray, vice-president of news at Bell Media, in an internal memo distributed to staff Wednesday morning and provided to The Canadian Press.

The company's media branch "can't afford" to continue operating with its various brands — such as CTV National News, BNN, CP24, its local TV news stations and radio channels — independently of one another, said Bell chief legal and regulatory officer Robert Malcolmson in an interview.

"It's a consolidation of news gathering, news delivery," he said.

The layoffs include a six per cent cut at Bell Media, but Malcolmson said cuts, amounting to around three per cent of its total workforce, are happening across the organization.

“This thing affects all layers of the company and isn’t targeted at any one band of employees.”

Management positions at BCE are also being slashed by six per cent, while there will also be 20 per cent fewer executive roles in the company compared with 2020.

About 30 per cent of the positions being eliminated are current vacancies that won't be filled.

CTV's foreign bureaus in London, U.K, and Los Angeles are set to close while its Washington, D.C. presence will be scaled back.

Bell Media said it would also shut down Edmonton's TSN 1260 Radio, Vancouver's BNN Bloomberg Radio 1410 and Funny 1040, Winnipeg's Funny 1290, Calgary's Funny 1060, along with London's NewsTalk 1290. It is also selling Hamilton's AM Radio 1150 and AM 820, as well as Windsor's AM 580, to an undisclosed third party, subject to CRTC approval.

In a separate internal memo sent on Wednesday, Bell Media president Wade Oosterman said the company is coping with "the ongoing migration of advertising revenue to foreign digital platforms" such as Facebook and Google, and a shift from cable, satellite and Fibre TV subscribers to digital streaming platforms.

"We are also faced with strong economic and inflationary pressures, a pullback in advertisers’ budgets, and a challenging regulatory environment that has been too slow to adjust," said Oosterman in his memo to staff.

In an open letter published online Wednesday, Bell Canada president and CEO Mirko Bibic said Bell Canada expects to lose more than $250 million in legacy phone revenues per year, while its news operations incur $40 million in annual operating losses. He said Bell radio stations have seen profit cut in half since the start of the COVID-19 pandemic.

"The job reductions are consistent with, but smaller than, similar reductions announced by other leading technology and media companies across North America in recent months," said Bibic.

Dwayne Winseck, a professor at Carleton University's School of Journalism and Communication, said the move to a more centralized newsroom would hurt local journalism, particularly on radio airwaves.

"One of the key things that I think has helped radio is its claim to local representativeness and so this really takes a knife to that," he said.

Gregory Taylor, an associate professor with University of Calgary’s communications, media and film department, said Bell's announcement is the culmination of "the last 10 years really coming home to roost."

"We've been told now for more than a decade that Canadian companies have to get larger to compete on a global scale. This was always questionable," he said. 

"And now we're seeing the danger element of it is that when there are problems with some of these companies, at various levels, it has impacts across the country."

Taylor said those affects would be felt locally, where the range of voices offered to Canadians would be limited.

"There's so much that's going to be potentially lost here," he said.

Malcolmson said regulatory challenges affecting both the telecommunications side and media arm left the company in an "unenviable place," with no choice but to make widespread cuts.

"We're obviously trying to do this in the most humane, least impactful way possible," he said.

Malcolmson did not rule out further layoffs in the foreseeable future, saying the company will take a wait-and-see approach to the regulatory environment.

He took aim at "relentless regulatory intervention" by the CRTC, under Ottawa's direction, that has prioritized measures to bring down the cost of telecommunication services.

Noting that the cost of wireless service has declined around 25 per cent and the cost of broadband high-speed internet has gone up by less than one per cent over the last three years, despite Canada's overall high inflation, Malcolmson said "maybe it's time to declare victory" for Ottawa.

"I think the government's sort of populist focus on pricing isn't necessarily in line with current reality and the government has created an intensely competitive industry structure that they should allow to play out," he said.

Telecommunications consultant Mark Goldberg said it's fair to criticize Ottawa for a narrow focus on price reduction at a time when much investment is still needed by Canada's major providers to meet consumers' needs.

"With this regulatory uncertainty, it's a difficult market to invest in."

But Winseck called it a situation that Bell could have avoided with better decision-making over the past decade.

"It seems to me that Bell is asking for the stars and the moon," he said. "It has a pretty favourable regulatory framework already."

A Reuters Institute report released Wednesday showed CTV News had the widest offline reach of English media outlets in Canada, and the second most online reach.

Still, Winseck said Bell has not invested enough "to allow itself to stand out as a major news provider."

The company has also failed to invest in its own domestic catalogue to compete on the streaming side, said Winseck.

"Without your own domestic catalogue, the days were numbered. It has basically withheld or starved its radio stations and its TV services of the investments that it would need to develop a robust catalogue of its own television and film programming."

Malcolmson lamented the process around two pieces of legislation designed to help Canada's struggling media sector. While Bill C-18 would require companies like Google and Meta to pay Canadian outlets for news content that appears on their platforms, he said it could be for naught if the companies follow through on threats to restrict or block news links on their sites in response.

The other, Bill C-11, aims to force platforms such as Netflix, YouTube and TikTok to contribute a percentage of their Canadian revenue to Canadian production, but Malcolmson said it's not going to solve the "fundamental problem" that popular American content is being "withheld" by major streaming platforms from appearing on Canadian TV.

In a tweet, Heritage Minister Pablo Rodriguez said the "sad news" about Bell's layoffs served as "yet another example of why bills C-11 and C-18 are necessary."

"A broke press is not a free press, and big tech needs to pay their fair share," the minister said.

The union representing some of the media workers being laid off said Bell should have let the two bills to finish working their way through the legislative process before deciding whether to make cuts.

"We think we think they should have waited and it's a shame that they didn't," said Randy Kitt, a spokesman for Unifor, which represents around 80 of the staff affected.

Kitt said it was a "devastating" day for members.

"We're surprised and we're not surprised," he said. "The media landscape in this country is extremely tough right now, which is why the government enacted two pieces of legislation to address it. We thought that Bell Media could have had other options to hold off until they saw relief from either C-18 or C-11."

Malcolmson said Bell has been waiting for regulatory reform for years and the company decided not to hold back cuts pending the outcome of regulatory consultations on those bills any further.

"We have to ensure that our business is able to operate in a viable way, and we can't wait two years and another, for example, $80 million of losses in news to see what the government might do.

"At some point, we have to say to ourselves, 'Is it worth funding this?'"

This report by The Canadian Press was first published June 14, 2023.

BCE is the parent company of BNN Bloomberg through its Bell Media division.

Ottawa commits $25M to create Canada's first-ever LGBTQ entrepreneurship program

The Canadian Press

A Pride flag flies on Parliament Hill in Ottawa on Thursday, June 8, 2023, during a Pride event. THE CANADIAN PRESS/Sean Kilpatrick

The federal government says it will invest $25 million to create Canada's first-ever LGBTQ entrepreneurship program.

Small Business and Economic Development Minister Mary Ng is expected to announce the funding Thursday in Kingston, Ont.

The program will be run by the CGLCC, a chamber of commerce for Canada's LGBTQ community, and will include three main components: A business scale-up program, an Ecosystem Fund and a Knowledge Hub. 

Darrell Schuurman, co-founder and CEO of the CGLCC, says "entrepreneurs who identify as 2SLGBTQI+ play a crucial role in contributing to the Canadian economy" but continue to face barriers when starting and expanding their businesses. 

He says the program will provide entrepreneurs with resources and support to tackle these obstacles and be successful.

The federal Economic Development Department says there are more than 100,000 LGBTQ-owned and -operated businesses in Canada that employ more than 435,000 workers and generate over $22 billion in economic activity.

Yet it says one in four LGBTQ entrepreneurs have faced discrimination or lost their business because of who they are.

This report by The Canadian Press was first published June 15, 2023.

First Quantum rebuffs informal approach from Barrick Gold

Dinesh Nair, Thomas Biesheuvel, Jacob Lorinc and Vinicy Chan, 

Bloomberg News   Jun 15, 2023

First Quantum Minerals Ltd. recently rebuffed an informal takeover approach from Barrick Gold Corp., the world’s second-largest producer of the precious metal, as miners scour the globe for deals, people with knowledge of the matter said.

Barrick made overtures to First Quantum in the last few months as part of its search for ways to expand in copper, the people said. First Quantum indicated it wasn’t keen on a combination and declined to enter any substantive talks, according to the people. 

Shares of First Quantum jumped as much as 13 per cent in Canadian trading Thursday, the biggest intraday gain since November. The stock was up 7.8 per cent at 2.06 p.m. in Toronto, valuing the company at US$17.3 billion. Barrick fell 1.7 per cent in New York trading, giving the company a market value of US$28.9 billion.

Barrick and First Quantum aren’t currently in formal discussions, the people said, asking not to be identified because the information is private. It remains unclear whether Barrick will revive its interest, according to the people.

Representatives for Barrick and First Quantum declined to comment.

ZERO PREMIUM

Barrick Chief Executive Officer Mark Bristow got the top job when the mining company he founded, Randgold Resources Ltd., was taken over by Barrick in a zero-premium deal completed in 2019. The South African has since expounded the virtue of doing deals to create value, not just to get bigger, and talked down the need for bumper premiums. 

Soon after taking the top job at Barrick, he went after Newmont Corp. with a hostile all-share no-premium bid that ultimately failed. By contrast, recent takeovers in the copper space have come with big premiums. 

BHP Group Ltd. offered a 49 per cent premium to OZ Minerals Ltd.’s undisturbed share price to seal a A$9.6 billion (US$6.6 billion) deal for the Australian miner. Rio Tinto Group last year bought out minority shareholders of Turquoise Hill Resources Ltd., which is developing a massive Mongolian copper project, for 67 per cent above its last close before the bid was unveiled. 

“Valuation is a significant hurdle,” Citigroup Inc. analysts Alexander Hacking and Steven Stroup said in a Thursday note. “Barrick has been disciplined on M&A recently and to make such an offer would imply a very bullish outlook for copper versus gold.”

While the proposed deal may never materialize, it does emphasize that First Quantum appears to be the most acquirable large-scale copper miner, the analysts said.

A deal with First Quantum would transform Barrick into a significant copper miner when the industry’s largest players are all seeking to expand production of the wiring metal. BHP and Rio Tinto are actively looking to grow their copper exposure, while Glencore Plc is pursuing an unsolicited US$23 billion takeover bid for Canada’s Teck Resources Ltd., chiefly to acquire its giant South American copper mines. 

Barrick’s move mirrors a wider groundswell of dealmaking interest across the world’s biggest miners — particularly focused on metals like copper and lithium that will be central to decarbonizing the global economy.

COPPER CHASE

The Canadian company also faces its own unique set of challenges. Barrick, once the world’s largest bullion producer, is wrestling with gold output at its lowest level since 2000 after a multiyear strategy to cut debt and sell off assets. Meanwhile, perennial rival Newmont is on track to close a deal with Newcrest Mining Ltd. that would cement its status as the biggest gold producer, leaving Barrick little chance of catching up anytime soon.

Bristow has spoken emphatically about the need for gold companies to enter the race for copper growth. He’s said that copper output is critical “if you want to be relevant” in mining, and last year launched an ambitious US$7 billion copper project in Pakistan that aims to be operational by 2028. 

Canada’s First Quantum has long been viewed as a takeover target in the mining industry, primarily for its massive copper mine in Panama. The operation, which accounts for about 1.5 per cent of global copper production, recently emerged from a monthslong dispute with the Panamanian government. 

First Quantum also owns copper, gold and nickel mines in Africa, Australia, Europe and the Middle East.