Gildan accuses ex-CEO of close relationship with shareholders calling for his return

Rosa Saba, The Canadian Press

Gildan Activewear Inc. is escalating an ongoing public battle for control of the Montreal-based apparel company, accusing its recently terminated CEO of having inappropriately close relationships with some of the shareholders calling for his reinstatement.

Ex-CEO Glenn Chamandy failed to disclose that he invested in funds managed by an unnamed Gildan shareholder that is now calling for his return, the company said in a release Tuesday evening.

"Mr. Chamandy’s actions and lack of transparency with the board are further indication that new leadership was required at Gildan," the company said in the release.

Gildan said Chamandy also seems to have a closer relationship with U.S. investment firm Browning West than he does with other shareholders, resulting in special treatment.

Chamandy, who co-founded Gildan, was terminated on Dec. 10 after four decades at the company. He was replaced by Vince Tyra, who started the top job this week.

Chamandy did not immediately respond to a request for comment, but his email auto-reply referred to previous statements. He previously said he presented a comprehensive long-range plan in October showing Gildan's organic growth prospects for the next five years.

In the weeks after his departure became public on Dec. 11, several of Gildan's biggest shareholders, including Browning West, have called for Chamandy to be reinstated as CEO. Browning West is seeking a special meeting of shareholders to replace eight members of the Gildan board in order to bring Chamandy back.

Gildan describes Browning West in the release as an "activist hedge fund" leading an "aggressive and misleading campaign" to reinstall Chamandy as CEO.

Chamandy appears to have treated Browning West differently than Gildan's other shareholders, the company claims.

Around a week after Chamandy proposed a "high-risk acquisition plan" to the board and was "pressing them to retain him as CEO," he gave Browning West's co-founders and several of the firm's investors an exclusive visit to Gildan's Honduras manufacturing plant, the company said.

"The company has no record in recent history of any other Gildan shareholder and their own investors being hosted by the CEO to an exclusive visit to a Gildan facility," said Gildan, adding that Browning West appears to have been given a "vastly different view" on Gildan's potential future share price than what Chamandy told the board.

Browning West said it conducts site visits to gain a better understanding of its portfolio companies.

"As a result of our understanding of the operational complexity of Gildan’s manufacturing process, we know that Vincent Tyra – who lacks manufacturing experience and has a record of value destruction – is an extremely poor leadership choice," the investment firm said in a statement.

"It has likely become clear to all shareholders that the board is much more focused on self-preservation than accepting shareholders’ views and creating value.”

The firm owns a 5.02 per cent stake in Gildan as of Jan. 9, according to financial services firm Refinitiv. That's up from 3.9 per cent on Dec. 14, according to a Browning West press release that day.

Gildan's stock price currently sits at $42.25, down from $49.61 on the last trading day before the company announced Chamandy's departure.

Gildan has said it replaced Chamandy because he didn't have a credible long-term strategy for the company, and had lost the board's confidence in his ability to grow the organization.

The company provided fresh details in Tuesday's release, after accessing the former CEO's files and electronic information following his departure.

"In addition to rarely being in the office, holding few senior management meetings and never bothering to visit the Company’s newest manufacturing plant, Gildan has now learned that Mr. Chamandy sent on average no more than a handful of work emails a day and had few business-related meetings diarized on his calendar," the company said.

Gildan said that on Nov. 25, Chamandy sent the board a letter with an ultimatum to approve his "risky multibillion-dollar acquisition strategy" and succession plan. But the next day, before the board had responded, Chamandy began moving out of his office.

The company in its release also denied a recent claim by Browning West that the board intends to use "extreme delay tactics" by postponing its next annual meeting to as late as the fall of 2024.

With files from Tara Deschamps

This report by The Canadian Press was first published Jan. 16, 2024.

Related

• Vince Tyra moves up start date as CEO at Gildan after board request
  
• Fired Gildan CEO responds to board criticism in open letter
  
• Gildan board says fired CEO Chamandy was distracted by deals, golf resort
• 
  

RENT IS INFLATIONARY

Asking rents jump 8.6% in December to hit record $2,178 on average: report

The Canadian Press

A new report says the average asking price in December for a rental unit in Canada was a record $2,178 per month, relatively flat from the previous month but an 8.6 per cent jump year-over-year.

The data released Monday by Rentals.ca and Urbanation, which analyzes monthly listings from the former's network, showed the average monthly cost of a one-bedroom unit in December was $1,932, up 12.7 per cent from the same month in 2022.

The average asking price for a two-bedroom was $2,301, up 9.8 per cent annually.

Rents also increased by an average of 8.6 per cent for 2023 as a whole. This followed a 12.1 per cent increase in 2022 and a 4.6 per cent gain in 2021. Asking rents in Canada over the past two years have increased overall by a total of 22 per cent, or an average of $390 per month, according to the report.

Traditional purpose-built rental apartments posted the fastest price growth in 2023 with a 12.8 per cent increase, as rents averaged $2,076. Condominium rentals, with an average rent of $2,340, and home rentals, at $2,354, had slower annual growth of 6.9 per cent and 5.9 per cent, respectively.

Asking rents in December for a one-bedroom unit in Canada's two most expensive major cities, Vancouver and Toronto, continued to come down on monthly basis.

The west coast city had an average price of $2,700, which was 5.8 per cent lower than November, while the Ontario capital came in at $2,521, 2.8 per cent below the previous month. Despite that, the cities still marked increases on an annual basis of four per cent and 2.6 per cent, respectively.

Alberta had the fastest-growing rents among provinces for purpose-built and condominium apartments in 2023, with a 15.6 per cent annual increase in December to reach an average of $1,691.

Meanwhile, B.C. remained the most expensive province for apartment rents with an average asking rent of $2,500, despite a 1.4 per cent annual decrease. The average apartment rent in Ontario was slightly below at $2,446, increasing 3.7 per cent annually in December.

The report said the rental market in Canada will remain undersupplied in 2024, but there should be more balance, with rent growth expected to be closer to its five-year average of approximately five per cent.

"Rental demand is expected to remain strong, experiencing some moderation compared to 2023 due to a slowing economy, a reduced number of non-permanent residents, and an improvement in homebuying activity as interest rates begin to decline," it stated.

This report by The Canadian Press was first published Jan. 15, 2024.

Interest rate shifts will have little impact on rental costs: expert

Ben Cousins, BNN Bloomberg

a "for rent" sign is posted outside a home in Denver. U.S. home rental prices , The Canadian Press

A Canadian real estate expert believes renters will see little benefit to changes in Canada’s interest rates, even as rental prices across the country see sky-high increases.

A report from Rentals.ca and Urbanation, released on Monday, found the average asking price for a rental in December climbed 8.6 per cent year-over-year, to a record $2,178 per month.

Additionally, asking prices for a one-bedroom unit climbed 12.7 per cent on an annual basis to $1,932.

 “When you look at the last two-year period, rents have grown by about 22 per cent,” Shaun Hildebrand, president of Urbanation, told BNN Bloomberg in a television interview on Tuesday. “This just speaks to how strong rental demand is across the country right now.”

 “This is obviously much faster than income growth and it’s causing a real deterioration of rental affordability across the country.”

 While many economists believe rental prices could stabilize once the Bank of Canada brings interest rates down – expected later this year -- Hildebrand isn’t so convinced.

 “We’ve been underbuilding rental housing for decades, so there’s not going to be a whole lot of change, unfortunately,” he said. 

Hildebrand said lower interest rates may push renters into homeownership and other measures, such as the cap on foreign students, may help with rental supply. However, he added the overall impact of the measures will be muted. 

“That should take a little bit of steam out of the market, but still we’re expecting to see rent growth in the five per cent range for the country, which is bringing things back in line with the five-year average,” he said.

Hildebrand pointed to three factors hurting rental prices in the country: record population growth, soft real estate activity and a stable economy.

RENT HIKES SEEN OUTSIDE OF TORONTO, VANCOUVER

While rent prices saw increases of nearly 10 per cent nationally, Canada’s two biggest cities, Toronto and Vancouver, actually saw rent prices decline.

Vancouver saw average rent decline by 5.8 per cent in December compared to a month prior, while Toronto’s declined by 2.8 per cent in the same time frame.  

Meanwhile, cities that saw significant population growth, such as Calgary and Halifax, took the brunt of the rent price hikes.

“I think this speaks to some resistance in the market to how expensive rents have become and there’s been some outward migration from these big expensive cities into relatively more affordable markets,” Hildebrand said.

 

Immigration surprises are making the Bank of Canada's job harder

Erik Hertzberg, Bloomberg News

Record-breaking immigration is muddying the economic picture for the Bank of Canada, distorting key statistics and making its battle against inflation more difficult.  

A surge of newcomers – largely driven by an unplanned spike in foreign students and temporary workers – has pushed Canada’s population growth rate to 3.2 per cent, one of the fastest in the world.

The country added more than 1.2 million new residents in a year, an influx that has propped up gross domestic product, bolstered consumer demand and led to higher costs for homes, all while dragging on productivity and boosting the unemployment rate. It’s creating a puzzle for policymakers and economists.

Population gains are complicating the central bank’s ability to assess how restrictive interest rates truly are, according to Stefane Marion, National Bank of Canada’s chief economist. The Bank of Canada raised its overnight rate to five per cent with hikes last June and July after the economy — specifically consumption — showed surprising strength. 

“Were the last 50 to 75 basis points warranted when it’s all driven by a population surge which you can’t do anything about?” Marion said in an interview. “I think the Bank of Canada misread the situation.”

While pandemic supply-chain shocks were a forecasting dilemma faced by monetary policymakers around the world, the Bank of Canada is the lone major central bank setting rates amid an accelerating population boom. 

It’s inconvenient timing, adding risk to the central bank’s already damaged credibility as policymakers weigh how long they should hold borrowing costs at the highest level in more than two decades.  

“No one has models calibrated for this type of population flow,” Marion said. 

Last year, the central bank spent “considerable” time during its April rate-decision meetings discussing how population flows are affecting their interpretation of economic data. When the Bank of Canada hiked its benchmark rate in July, Governor Tiff Macklem called the impact of immigration on price pressures “roughly neutral.” 

But in a speech last month, Bank of Canada Deputy Governor Toni Gravelle acknowledged that population growth has led to higher costs for housing. Mortgage interest and rents were two major contributors to inflation of 3.4 per cent in December. Excluding shelter, inflation was a full percentage point lower, far closer to the bank’s two per cent target. 

Over the long run, immigration will help curb inflation, Gravelle said, adding two per cent to three per cent to the potential growth of the economy.

“It’s made traditionally used economic indicators harder to decode,” Dominique Lapointe, an economist with Manulife Investment Management, said by email. “It adds a unique layer of complexity to monetary policy decision-making.”

The country’s job market is another example. A month of employment gains must now be considered in the context of the expansion of the labour force, which grew three per cent at the end of last year.

In 2019, the economy added an average of 22,000 new jobs a month and the unemployment rate was stable. Last year, it gained about 36,000 jobs a month, yet unemployment rose. 

As growth slows in 2024, economists surveyed by Bloomberg say Canada’s unemployment rate is set to rise to 6.7 per cent later this year. That increase of 0.9 percentage points would be the biggest deterioration in labour market conditions among Group of Seven countries, according to forecasts. 

A rise in the unemployment rate of that size typically coincides with recessionary periods. But analysts say Canada is likely to add jobs in 2024 — it’s labour-force growth that’ll skew the rate higher.

Marion is one of many economists who say the influx of people is masking underlying economic weakness. After adjusting for population, Canada’s economy hasn’t grown since the second quarter of 2022, shortly after the Bank of Canada began its rate hikes. 

GDP per capita — an oft-cited measure of living standards — has receded to 2017 levels.

Additional demand has also put a floor under home prices, protecting the housing assets of millions of Canadians despite higher rates. That’s supporting wealth and adding to evidence that an important monetary channel for the central bank to thwart price pressures has been muted.

“Population growth is distorting everything and it’s really tough to get a sense of the health of the economy at this point,” Randall Bartlett, Desjardins’ senior director of Canadian economics, said by phone. “We still think we’re going to have a mild recession in the first half of the year. But if you look at it in a per-capita sense, we’ve been in recession for a while.”

Relying on more labour instead of capital investments also carries continued risks for Canada’s labour productivity, which has declined for six consecutive quarters and is a persistent source of criticism of Prime Minister Justin Trudeau’s government. 

“Part of the issue is that Canadian governments weren’t prepared for the influx of people,” Benjamin Reitzes, a rates and macro strategist with Bank of Montreal, said by email. “There wasn’t sufficient investment in all types and levels of infrastructure, and that’s likely been a drag on broader productivity.”

 

Nunavut premier asks Ottawa for $250 million to tackle territory's housing crisis

The Canadian Press

Nunavut Premier, P.J. Akeeagok is shown in his office in Iqaluit, Wednesday, Jan. 17, 2024. THE CANADIAN PRESS/Dustin Patar

Nunavut's premier is asking Ottawa to provide $250 million to help the territory build more homes, which he says is key to addressing health-care issues caused by overcrowding. 

P. J. Akeeagok said in an interview in his office today housing is his government's top priority and a lack of housing has been an issue for decades across the North.

He says while he understands $250 million is a significant ask, Nunavut residents "deserve the same access" to housing as those elsewhere in Canada.

Prime Minister Justin Trudeau and Housing Minister Sean Fraser have spent the past several months travelling the country, announcing millions in spending for cities to get more homes built at a time when the Liberal government is under immense pressure to increase supply as a way to tackle housing affordability.

Akeeagok says it was "incredible" to see the amount of resources Ottawa has been providing to cities across Canada to tackle the current housing crisis, and the $250 million would be proportionate to what the federal government has spent elsewhere. 

Another issue facing Nunavut is the increased cost of living, which he says people are feeling from higher food and fuel costs, particularly as households have no alternative but to use diesel. 

Akeeagok says he would "absolutely" like to see Ottawa provide it with a carve-out when it comes to the levy on its fuel, as the government did in Atlantic Canada, given Nunavut's 25 communities have no access to alternative power. 

This report by The Canadian Press was first published Jan. 17, 2024

Tech industry expecting more layoffs, but say hiring coming too this year

Tara Deschamps, The Canadian Press

Marissa McNeelands, left, and April Hicke, founders of Toast, a women's tech collective, attend the Collision conference in Toronto on Wednesday, June 28 2023. THE CANADIAN PRESS/Chris Young

Tech’s biggest names spent last year in layoff mode and if the last few weeks are any indication, that pattern is continuing into this year.

Two weeks into January, major tech firms such as Google, Amazon, Discord, Instagram and Duolingo have already made job cuts and several other firms are rumoured to soon be following suit.

Even as industry members and observers expect the cuts to continue, they're optimistic that layoffs won't hit last year's levels.

"I don't think that this is going to be anywhere close to the layoffs of 2023," said April Hicke, co-founder of women's tech collective and talent organization Toast.

She views many of the job cuts carried out in January as companies streamlining their operations to make their businesses even more revenue-focused, especially as advances in artificial intelligence arise and companies get a better handle on how COVID-19 has shaped their futures.

The COVID-19 pandemic brought a boom in tech hiring as more people spent time at home on their devices and as capital remained easy to access while interest rates were low. 

But when lockdowns and other restrictions related to the health crisis began to lift, many tech companies realized their businesses would not continue to grow at the same levels as they had during the pandemic's onset. 

At the same time, investors became more tight-fisted with their funding and interest rates were aggressively hiked to offset inflation. They have yet to be lowered.

"A lot of tech companies are highly leveraged, so when interest rates are high, they get squeezed and they have to cut costs and sort of get lean," said Tu Nguyen, an economist with accounting and consultancy firm RSM Canada.

"They can't afford to just have a lot of people without generating the maximum amount of output and profitability, so with a high interest rate, they do have to cut staff."

That's exactly what Canadian companies such as Shopify Inc., Lightspeed Commerce Inc. and Hootsuite Inc. did last year, along with giants like Amazon, Google and Meta.

By the end of 2023, aggregator Layoffs.fyi had counted 262,582 workers globally laid off by 1,186 companies.

It has so far counted 7,528 employees laid off globally at 48 tech companies in January.

But "these layoffs of the large major tech companies are not all necessarily negative for Canadian companies," said Benjamin Bergen, president of the Council of Canadian Innovators, an innovation policy organization supporting startups in the country.

The cuts have been a good opportunity for Canadian firms to pick up talent that would be harder to lure away from larger multinational companies.

While big names like Google and Amazon have so far dominated layoff talk, smaller firms like Toronto-based artificial intelligence and biomedical startup BenchSci have reduced their head count too this year and news aggregation startup Artifact recently announced it's closing down. 

"The companies that I think that are most feeling the pinch are the ones that are scaling up but have not achieved cash-flow positive operations, and that's where I think maybe in the domestic Canadian market, you're going to see more of the layoffs," said Bergen.

Nguyen felt the cuts will trickle in until about the middle of the year, when central banks start easing interest rates and companies get the confidence to hire again.

A fall 2023 survey conducted by the Council of Canadian Innovators found many tech organizations expected to be hiring in 2024.

"And in some cases, they're double-digit head count increases," Bergen said.

That's in line with some of what Hicke is seeing.

"Companies that were a little more reluctant to hire through 2023 are starting to be a little more bullish," she said.

Some 84 per cent of Toast's clients engaged the organization in a talent search last year with the bulk of that work coming in the final two quarters. 

Data, AI and machine learning roles were popular among job postings, but marketing and sales professionals were in the mix too, Hicke said.

This report by The Canadian Press was first published Jan. 17, 2024.

Duelling U.S. sandwich brands Jimmy John's and Jersey Mike's to expand in Canada

Tara Deschamps, The Canadian Press

A Jimmy John’s sandwich chain location is shown in a handout photo. THE CANADIAN PRESS/HO-Jimmy John's

A battle of the sandwich brands is materializing as a pair of U.S. sub companies announce big plans for Canada.

Inspire Brands announced Wednesday that its Jimmy John’s banner would use a franchise model to make its way outside the U.S. this year with a restaurant in the Greater Toronto Area and more to follow across the country.

Meanwhile, Redberry Restaurants said its Jersey Mike’s Subs brand, which already has two locations in Ontario, plans to open more than 300 Canadian restaurants by 2034. Some will be franchises, others owned by Redberry, which owns and operates more than 180 Burger King and Taco Bell locations.

Both companies are known for their customizable submarine-style sandwiches, which are served with sides like chips and cookies. At Jimmy John's, diners can also opt for wraps or an unwich, a sandwich which uses lettuce in lieu of a bun.

They will join a number of homegrown and foreign sandwich companies with years of operating in Canada, creating a fight for dining out dollars. 

Joanne McNeish, an associate professor at Toronto Metropolitan University specializing in marketing, said the news is "exciting" for the Canadian market, but the big question is whether these brands have enough appeal in a new market.

"There's some assumption particularly about the Canadian market (from some American brands) that 'Oh, they're just like us, so they'll eat the same,'" said McNeish.

"First of all, our population is far more diverse than their population ... Second of all, these are restaurants that pride themselves on large portions. That's not actually a Canadian sensibility."

McNeish suspects these brands are interested in Canada because people turn to lower-priced goods and comfort food during economic downturns. COVID-19 has also placed an emphasis on healthy eating.

But there are a wealth of rivals already catering to both.

The closest rivals for Jimmy John's and Jersey Mike's will likely be Subway, also a U.S. chain, Toronto-born Mr. Sub, which is run by the Thai Express- and Manchu Wok-owning MTY Food Group, and Firehouse Subs and Tim Hortons, which share a parent company with Popeyes Louisiana Kitchen and Burger King.

Coffee giant Starbucks and U.K. café brand Pret A Manger, which has been expanding in Canada through A&W, are also players in Canada’s fast food sandwich market, though both focus on more artisanal ingredients.

McNeish feels Jimmy John's and Jersey Mike's will need to spend heavily to build the necessary brand awareness because their competitors "will not hesitate to fight back" with discounts, loyalty programs and coupons.

"These are not tiny brands that will run out of cash against these promotional efforts," she said.

"There will be price promotions and it could then cause consumers to default to the brands they're loyal to and they're aware of and it will not allow Jimmy John's and Jersey Mike's to get the traction."

Jimmy John's, which also announced an international franchise agreement for Latin America on Wednesday, has yet to share where its first location will be or how many stores it hopes to open.

"We won't publicly announce the number, but ... we're approaching 3,000 in the U.S. and we have amazing runway to grow, so you could easily do that and more in Canada over a long period of time," Michael Haley, president and managing director of international for Jimmy John's parent company Inspire Brands.

Inspire Brands, which is also behind Arby's, Baskin-Robbins, Buffalo Wild Wings, Dunkin' and Sonic, will use Canadian franchisor Foodtastic Inc. to launch Jimmy John's in Canada.

Foodtastic has more than 1,100 restaurants across brands including Milestones, Freshii and Quesada.

Asked about what the Canadian Jimmy John's menu will look like, Haley said, "You want to be able to go to a Jimmy John's in Canada and feel like you're at a Jimmy John's.

"But we also want to ensure that we make those changes that are needed to resonate with the Canadian consumer."

Jimmy John's research revealed more than 60 per cent of Canadian consumers prefer a hot sandwich, so the chain will offer the option to have a sandwich toasted. Jersey Mike's offers hot grilled sandwiches in addition to cold ones.

"There's just little tweaks. Sometimes even the name of the sandwich can be adjusted to resonate and just have a better translation," Haley said.

On whether Inspire Brands will bring some of its other companies, including burger and fries giant Sonic, to Canada, Haley said, "We do see that many or most of our brands can and could resonate in Canada."

"Stay tuned on Sonic. I think that will be our sixth brand to come outside the U.S. and we're not too far off working through today what the international adaptation of the brand could look like."

This report by The Canadian Press was first published Jan. 17, 2024.

 

Pushback against DEI 'unwise': experts

Jordan Fleguel, BNN Bloomberg

As diversity, equity, and inclusion (DEI) initiatives come under fire from prominent billionaires, experts caution that women and people of colour are still massively underrepresented in leadership roles.

DEI policies have become common at many Canadian and U.S. institutions such as businesses and universities, in an effort to bring more diversity to corporate leadership structures.

Pushback again the policies has escalated in recent weeks, following the resignation of Harvard University’s first Black woman president, with Elon Musk and Lululemon founder Chip Wilson publicly stating their opposition to the movement.

But despite years of effort to bring more diversity to the corporate world, there have only been small inroads made by women and people of colour, according to Darren Rosenblum, associate dean of graduate studies at McGill University’s faculty of law.

In an interview with BNNBloomberg.ca, they said DEI policies are still needed to bring about change.

“I think there's a lot of room for further diversification,” Rosenblum told BNNBloomberg.ca in a telephone interview.

“For people to take this moment as an opportunity to push against that is really unwise because expanding the pool of leadership is an essential component of good governance.”

Wes Hall, executive chairman and founder of Kingsdale Advisors, has for years advocated for increased diversity and representation in Canadian boardrooms.

In an interview with BNN Bloomberg, he said DEI has often been unfairly used as a scapegoat for other issues organizations face, distracting from the policies’ true goals.

“The problem that a lot of people seem to be having is when it comes to all the problems that we see in the world today, they put it in the DEI bucket, saying if we didn't have DEI, we wouldn't have all these problems,” Hall said.

“Then (they think) when somebody gets an opportunity, it's not because they're capable of doing that job, it's because of this DEI movement … but DEI is really just about representation. Representation in the boardroom, representation in C-Suite and representation in society.”

HARVARD CONTROVERSY

Discussions around whether DEI policies are fair or even legal have been ongoing for years, but the conversation returned to the forefront this month following Claudine Gay’s resignation as president of Harvard University.

Gay, the first Black woman to ever hold the position, resigned following allegations of plagiarism, but first drew criticism for not strongly condemning antisemitism on campus in the wake of numerous reported incidents of anti-Jewish hate amid the ongoing war between Israel and Hamas.

A Harvard subcommittee and independent panel that investigated the plagiarism allegations against Gay found “a few instances of inadequate citation” in her past academic writing. 

“It has become clear that it is in the best interests of Harvard for me to resign so that our community can navigate this moment of extraordinary challenge with a focus on the institution rather than any individual,” Gay wrote in an email to the Harvard Crimson earlier this month.

Prior to her resignation, billionaire investor and Harvard alumnus Bill Ackman was one of Gay’s most outspoken critics, leading calls on social media for her to step down.

Ackman has since turned his ire towards DEI policies, arguing in a social media post that Gay was not awarded her position by merit, but rather through efforts to diversify Harvard’s leadership, saying “she did not possess the leadership skills to serve as Harvard’s president.”

Fellow billionaires Elon Musk and Chip Wilson also chimed in on the broader issue, with Musk calling DEI “another word for racism.”

Wilson, the controversial founder of Canadian athleisure brand Lululemon, recently criticised his former company’s “whole diversity and inclusion thing,” in a Forbes profile.

“They’re trying to become like the Gap, everything to everybody,” he told the magazine. “I think the definition of a brand is that you’re not everything to everybody … you’ve got to be clear that you don’t want certain customers coming in.”

Wilson, who started Lululemon in 1998, stepped down from the company in 2013 and relinquished his board seat but remains a shareholder.

NEED FOR REPRESENTATION

Hall, who has worked with Ackman in the past, said he doesn’t see much merit in the current anti-DEI arguments, because he still sees a glaring lack of representation that needs to be intentionally addressed.

“If you go outside and it's a beautiful sunny day and somebody walks outside and says it's really gloomy and cloudy out, are you going to argue with that person? Probably not,” Hall said.

“But if it's somebody you respect saying that, you probably would be a little bit puzzled, maybe disappointed, because it's clear that the sky is blue, but I live the issue. I live it. I see the fact that there's representation that's lacking in certain circles.”

FEW PEOPLE OF COLOUR ON BOARDS: PROF

Rosenblum said that women used to be a rare sight in corporate boardrooms, but thanks to consistent and intentional efforts to include them, “we've seen the number of organizations with no women on their board plummet.”

But people of colour, and more specifically women of colour, are still massively underrepresented, they noted.

“The numbers are just nowhere near the level where there would be any justification for making a claim that there are people in leadership positions who are there solely because of their race,” they said.

Hall agreed with that sentiment, noting that “when people talk about DEI and they blame Black folks, for example, the numbers say otherwise.”

“The numbers suggest that Black and Indigenous (people) are at the very bottom of the totem pole in terms of people who are benefiting from DEI, but when it goes sideways, they're the ones that get the blame.”

Hall said that despite the recent pushback against DEI, he has meetings every day with people who are intentional about changing society for the better, with diversity in mind.

“There are a lot more people in this world who want to see good happen… than people who want to see the contrary,” he said.

 

Oil sector CEO compensation jumps double-digits amid surging profits: report

Rosa Saba, The Canadian Press

CEO pay in the oil and gas sector has soared with the industry's post-pandemic resurgence and will likely increase even more with the completion of the Trans Mountain pipeline expansion this year, a new report projects.

The report released Wednesday by the Bedford Consulting Group looked at C-Suite salaries, bonuses and other forms of executive compensation at 143 North American oil and gas companies — 68 of which were headquartered in Canada.

It found that in 2022, the most recent year for which data is available, executive pay in the sector rose sharply. 

That year, chief executives' total compensation ranged from a median $425,255 at companies with total assets under $100 million to $16.6 million at companies with total assets topping $30 billion.

Five of the seven company asset tiers laid out in the report saw median CEO compensation rise by at least 20 per cent in 2022 from the year before. 

In some cases, CEO compensation rose by as much as 75 per cent, the report found.

The increase in executive pay came as the oil and gas sector rebounded from years of downturn and low commodity prices. Russia's invasion of Ukraine in early 2022 led to global fears about energy security, causing oil prices to spike.

Bedford managing partner Frank Galati attributed the increase in executive pay in 2022 to the industry's "strong position," as energy demand rebounded alongside a slew of new export terminals on the Gulf of Mexico coast.

In Canada, surging oil prices led a number of energy firms to report all-time record profits in 2022. 

Some companies were also criticized by environmentalists and politicians for directing significant profits to shareholders in the form of dividends and buybacks, rather than prioritizing investments in decarbonization.

While executive compensation data for the 2023 year is not yet publicly available, Bedford Consulting Group is already projecting that CEO pay will tick higher in 2024. 

The Trans Mountain expansion project, which is 98 per cent complete, is expected to add over half a million barrels per day of Canadian oil export capacity.

Improved market access is expected to help narrow the Western Canada Select differential, the discount Canadian oil companies typically take on their product in part due to lack of export capacity.

Bedford said that as a result, it expects to see further increases in executive compensation in the Canadian oil and gas sector in the coming years.

This report by The Canadian Press was first published Jan. 17, 2024.

WestJet Encore pilots kick off conciliation, starting countdown to possible strike

The union representing pilots with WestJet's regional subsidiary have started the clock on potential job action — though any moves on that front are still at least three months off.

The Air Line Pilots Association, which represents more than 300 WestJet Encore aviators, says it has kicked off the conciliation process by filing for help with the federal mediation service.

The request leaves the labour minister 15 days to appoint a conciliation officer who will work with both sides toward an agreement — with possible picketing or strikes to follow if a deal fails to materialize after two months of talks.

Carin Kenny, who chairs the union's WestJet Encore group, says negotiations have come to a "near standstill" as the pilots demand better wages, working conditions and career progression.

In June, 1,800 pilots with WestJet and the now defunct subsidiary Swoop ratified an agreement that granted a 24 per cent pay bump over four years.

Bargaining came down to the wire, with WestJet cancelling more than 230 flights in preparation for job action before a deal was reached hours ahead of the strike deadline in May.

This report by The Canadian Press was first published Jan. 16, 2024.

Extreme weather a growing risk to Canada's electricity grid: experts

Amanda Stephenson, The Canadian Press

A series of electricity grid alerts in Alberta during the deep freeze last week made headlines across the country, but experts say power systems all across North America are increasingly at risk of being overloaded during severe weather.

Francis Bradley, CEO of the industry association Electricity Canada, said there is virtually nowhere the electricity grid isn't vulnerable to the rising severity and duration of climate change-related extreme weather.

“Over the last two years or so, during these extremes of weather, we’ve seen new peaks hit in terms of electricity demand," Bradley said in an interview.

"And it's not just in Alberta. We saw new peak demands hit last summer in Ontario, we saw new peak demand hit last winter in Quebec, for example. In most regions of the country, the extremes are increasing."

South of the border, electricity grids have suffered the strain in recent years. Winter storms led to blackouts in Texas in 2021 and blistering heat waves have forced California to declare repeated emergency grid alerts.

In Canada, Albertans were warned in an emergency alert issued by the provincial government last weekend to immediately reduce their power usage to avoid potential rotating blackouts as temperatures approached -40 C.

No blackouts were required, with the Alberta Electric System Operator noting electricity consumption dropped significantly within minutes of the alert being issued.

But the operator's data shows grid alerts in Alberta during both heat waves and cold snaps are increasing in frequency. The electric system operator issued just four provincial grid alerts in the four-year period between 2017 and 2020, but has issued an additional 17 since 2021.

Electricity grid reliability has become a political issue in Alberta, where the phaseout of dispatchable coal-fired power plants combined with a dramatic increase in intermittent wind and solar capacity has sparked debate about the practicality of a rapid transition to green energy.

But Bradley said Alberta's problems are not unique. All jurisdictions are facing rising demand for electricity, spurred in part by the increased demand for electric vehicles and other clean-energy innovations, and no single province has a perfect solution.

"Ontario, for example, has had concerns and has asked customers to reduce consumption during heat waves in the past," he said.

"Yes, I've heard concerns expressed about the energy mix in Alberta, but you'll also hear concerns about the energy mix if you happen to be in British Columbia or Manitoba right now because of drought. They're extremely dependent on hydro, and that's problematic in a low-water year."

A report released in November from the North American Electric Reliability Corporation (NERC) warned that much of North America this winter is at an elevated risk of having "insufficient energy supplies" to meet demand in extreme operating conditions, such as "prolonged, wide-area cold snaps."

While in general, U.S. jurisdictions are more vulnerable to potential winter grid interruptions because they are less prepared for cold weather, the report also flags parts of Canada as being vulnerable.

Saskatchewan, for example, is noted as being at "high" risk of electricity demand shortfalls this winter due to increased demand projections, the retirement of a natural-gas-fired power plant and planned generator maintenance.

Both Quebec and the Maritimes were noted to be at "elevated risk."

Mark Olson, NERC’s manager of reliability assessments, said Alberta wasn't even flagged as a potential area of risk by the report — a fact he said that demonstrates how difficult electricity demand forecasting has become as extreme weather intensifies. It is hard for electric system operators to predict or plan for climate events that are completely out of the range of normal.

"I know Alberta's system operator there is evaluating things, but there's early indication that the demand level was even higher than a normal peak winter demand event," Olson said. 

"It looks like it was more like a once-per-decade type of cold weather event."

Rob Thornton, president and CEO of the International District Energy Association, said grid alerts are worrisome for the public but added it's important to understand that the risk of a catastrophic grid failure remains exceptionally low.

"The grid in North America is really reliable, it really is. It's an amazing engine and machine," he said. 

Still, he said events like those experienced in Alberta last weekend show the importance of developing policies that will ensure a resilient and reliable electricity system to 2050 and beyond. This will include finding the proper balance between dispatchable and intermittent sources of electricity, investing in additional capacity to meet growing demand, building more inter-jurisdictional connections and more.

"These events (grid alerts) cause, I don't know if anxiety is the right word, but certainly awareness," Thornton said.

"Mother Nature is showing some fangs from time to time."

This report by The Canadian Press was first published Jan. 18, 2024.