Business News

The rising price of oil may grab most of the headlines, but another commodity — natural gas — is on an even wilder ride and expected to hit fresh highs this summer.The war in Ukraine and resulting concerns about global energy security have driven up commodity prices world-wide. But where the price of oil is up about 85 per cent year-over-year, natural gas is up more than 200 per cent.As of mid-day Friday, the U.S. natural gas benchmark Henry Hub price was trading around $8.75 US per million British thermal units, or MMBtu. It surged to a 14-year high of more than $9 earlier in the week, from less than $3 at this time last year.”It’s like if oil went to $200 (per barrel), but it’s not getting the same kind of attention,” said Dulles Wang, a Wood Mackenzie analyst based in Calgary. “And I think there’s probably still more upside potential for natural gas prices.”Driving the growth in prices are surging liquefied natural gas (LNG) exports from the U.S. Gulf Coast, aimed at helping to meet global demand for energy, along with low North American storage levels.Consumers could see their bills for natural gas consumption, tracked by meters like the one above, climb above the 14-year highs seen earlier this week.

Twitter shareholders have filed a lawsuit accusing Elon Musk of engaging in “unlawful conduct” aimed at sowing doubt about his bid to buy the social media company.The lawsuit filed late Wednesday in the U.S. District Court for the Northern District of California claims the billionaire Tesla CEO has sought to drive down Twitter’s stock price because he wants to walk away from the deal or negotiate a substantially lower purchase price.San Francisco-based Twitter is also named as a defendant in the lawsuit, which seeks class action status as well as compensation for damages.A representative for Musk did not immediately respond to a message for comment on Thursday. Twitter declined to comment.’Take it or leave it’ offerMusk last month offered to buy Twitter for $44 billion US, but later said the deal can’t go forward until the company provides information about how many accounts on the platform are spam or bots.The lawsuit notes, however, that Musk waived due diligence for his “take it or leave it” offer to buy Twitter. That means he waived his right to look at the company’s non-public finances.WATCH | Twitter deal ‘temporarily on hold,’ Musk says:Elon Musk says $44B Twitter deal ‘temporarily on hold’14 days agoDuration 4:09Elon Musk says his planned $44 billion US purchase of Twitter is ‘temporarily on hold’ pending details on spam and fake accounts on the social media platform, but he is ‘still committed to acquisition.’In addition, the problem of bots and fake accounts on Twitter is nothing new. The company paid $809.5 million last year to settle claims it was overstating its growth rate and monthly user figures. Twitter has also disclosed its bot estimates to the Securities and Exchange Commission for years, while also cautioning that its estimate might be too low.To fund some of the acquisition, Musk has been selling Tesla stock and shares in the electric carmaker have lost nearly a third of their value since the deal was announced on April 25.In response to the plunging value of Tesla’s shares, the Twitter shareholders’ lawsuit claims Musk has been denigrating Twitter, violating both the non-disparagement and non-disclosure clauses of his contract with the company.”In doing so, Musk hoped to drive down Twitter’s stock price and then use that as a pretext to attempt to re-negotiate the buyout,” according to the lawsuit.Twitter’s shares closed Thursday at $39.54, 27 per cent below Musk’s $54.20 offer price.High profile sagaBefore announcing his bid to buy Twitter, Musk disclosed in early April that he had bought a nine per cent stake in the company. But the lawsuit says Musk did not disclose the stake within the timeframe required by the Securities and Exchange Commission.And the lawsuit says his eventual disclosure of the stake to the SEC was “false and misleading” because he used a form meant for “passive investors” — which Musk at the time was not, because he had been offered a position on Twitter’s board and was interested in buying the company.Musk benefited by more than $156 million US from his failure to disclose his increased stake on time, since Twitter’s stock price could have been higher had investors known Musk was increasing his holdings, the lawsuit claims.”By delaying his disclosure of his stake in Twitter, Musk engaged in market manipulation and bought Twitter stock at an artificially low price,” the lawsuit says.

The federal government has put out new policy directives for the Canadian Radio-television and Telecommunications Commission (CRTC) aimed at improving competition and giving consumers more options for their telecom services.The directives, which the regulator published on its website after markets closed on Thursday, are open for comment until July 19, after which they may come into force. Generally, they seek to redefine the CRTC’s mandate to make it more focused on stimulating competition among telecom services, and helping consumers in the process.Among the proposed directives is one that would force the large incumbent telecom providers to offer space on their broadband internet networks to smaller regional competitors, who then resell that service themselves.Known as “wholesale internet,” the regulator had, in 2019, mandated the big companies to provide that network space at a very low rate, before reversing that decision in 2021, much to the chagrin of smaller players who said they would have to raise their prices as a result.The policy direction would not reverse that 2021 decision but it would require the big telcos “to continue to give access to competitors at regulated rates so they can offer better prices and more choices to Canadians.”A government spokesperson said it would be “irresponsible” to implement the lower rates that were available prior to the 2021 decision.   “That does not mean to say that there is not room for improvement, or competition.”Colin Legendre, president of Coextro, an Ontario-based internet service provider, said he was “disappointed” in what he saw on Thursday.The government “kind of made a non-decision by not overturning the 2021 decision,” he told CBC News.He said the previous wholesale rates were good because they provided clarity for all companies in the space, but the 2021 decision made it impossible for smaller competitors to compete.Changes to wireless industry tooAnother proposed change would direct the CRTC “to improve its hybrid mobile virtual network operator (MVNO) model as necessary.”MVNOs are cellular networks run by third-party companies with no wireless infrastructure of their own, but which offer services on existing networks. Canadian actor Ryan Reynolds runs a MVNO called Mint Mobile, offering rock-bottom cellular services to Americans, but not in Canada.True MVNOs are not allowed to operate in Canada because of a 2021 CRTC ruling that declared they must have some sort of wireless infrastructure of their own to operate, meaning the only MVNOs possible in Canada would have to be regional players with their own networks that piggyback on other networks in places where they don’t operate.The new policy directive makes it clear the government would like to see how that MVNO policy unfolds”The government is prepared to move to a full MVNO model, if needed, to support competition in the sector,” the government said.Another proposed change would call on the CRTC to address unacceptable sales practices and lay out new measures to improve clarity around service pricing and the ability for customers to cancel or change services.François-Philippe Champagne, the minister of innovation, science and industry, says the new policy directives are part of the government’s push to boost affordability.”As part of our ongoing efforts to make life more affordable for Canadians, we are introducing a strong policy direction that requires the CRTC to focus on improving competition and supporting consumers,” he said on Twitter.

A federal consumer watchdog has found that visible minority and Indigenous customers at Canada’s big banks more often received inappropriate treatment from sales staff.In a mystery shopping review conducted in 2019 by the Financial Consumer Agency of Canada, the customers reported that information was presented to them in a manner that was not clear.They were also offered optional products, such as overdraft protection and balance protection insurance more often than other shoppers.The shoppers asked about chequing accounts and credit cards and reported on their experiences.Overall, the report found 74 per cent of the shoppers at 712 bank branches described their experiences as positive.However, the agency says the banks could improve service when it comes to product recommendations and employee communication. 

The British government unveiled a 15 billion-pound emergency aid package on Thursday featuring a 25 per cent tax on profits at oil and gas firms, to help offset increases in the cost of living.Treasury chief Rishi Sunak said the government would introduce the temporary windfall tax which is expected to raise 5 billion pounds (more than $8 billion Canadian) over the next year to help fund cash payments to help millions of people cope with sharply rising energy bills, Sunak said.”The oil and gas sector is making extraordinary profits,” Sunak said. “Not as the result of recent changes to risk taking or innovation or efficiency, but as the result of surging global commodity prices driven in part by Russia’s war. And for that reason, I am sympathetic to the argument to tax those profits fairly.”Cash rebates for householdsSunak said the government help will target the most vulnerable people, including disabled people and retirees. Some eight million of the country’s lowest-income households will receive a one-time government payment of 650 pounds (a little over $1,000 Canadian).Every household will also receive a 400-pound discount on domestic energy bills in October. That will help offset energy bills that have increased, on average, by 700 pounds a year this year.Britain’s energy regulator said this week that domestic energy bills could shoot up by another 800 pounds a year in the fall, as Russia’s war in Ukraine and rebounding demand after the pandemic push oil and natural gas prices higher.As is the case in many countries, inflation has skyrocketed in Britain in recent years, with the official rate hitting a 40-year high of 9 per cent. That compares with 6.8 per cent in Canada and 8.5 per cent in the U.S.The announcement of the windfall tax was change in direction for the government of Boris Johnson, which had previously said that imposing one would deter investment in the U.K.’s energy sector. But the government is under heavy pressure to act as skyrocketing energy and food bills cause financial hardship for British households.Sunak said the temporary levy would feature an “investment allowance” to motivate companies to invest in oil and gas extraction in the U.K.”For every pound a company invests, they’ll get back 90 per cent in tax relief. So the more a company invests, the less tax they will pay,” Sunak said.

When you were in high school, did you learn about leasing a car, the pitfalls of payday loans or how best to invest your money?Amy Smith certainly didn’t, and that’s why now, as a math teacher at College Avenue Secondary School in Woodstock, Ont., she’s invited various professionals with financial know-how — including a Realtor, a mortgage broker, a financial adviser and a car sales rep — to speak to her students.”I realized I didn’t learn this,” Smith said. “I don’t want my students to have that mindset like, ‘Oh, I’m signing a paper, but I really don’t understand what I’m signing for.'”Smith has been teaching her students about compound interest, investing and credit scores, with the help of community experts. She’s been focusing on buying and leasing cars with her Grade 9 students.”I know when I was younger, I had no idea about leasing and owning a car,” Smith said. “I had questions like, ‘Why would I want biweekly payments instead of monthly payments?'”Among other things, students learned about mortgages, investing and tenant rights.

Even when regular workers win their biggest raises in decades, they look minuscule compared with what CEOs are getting.The typical compensation package for chief executives who run S&P 500 companies soared 17.1 per cent last year, to a median $14.5 million, according to data analyzed for The Associated Press by Equilar.The gain towers over the 4.4 per cent increase in wages and benefits netted by private-sector workers through 2021, which was the fastest on record going back to 2001. The raises for many rank-and-file workers also failed to keep up with inflation, which reached 7 per cent at the end of last year.CEO pay took off as stock prices and profits rebounded sharply as the economy roared out of its brief 2020 recession. Because much of a CEO’s compensation is tied to such performance, their pay packages ballooned after years of mostly moderating growth.Mostly stock optionsIn many of the most eye-popping packages, such as Expedia Group’s, valued at $296.2 million and JPMorgan Chase’s $84.4 million, boards gave particularly big grants of stock or stock options to recently appointed CEOs navigating their companies through the pandemic or to established leaders they wanted to convince to hang around.The CEOs often can’t cash in on such stock or options for years, or possibly ever, unless the company meets performance targets. But companies still must disclose estimates for how much they’re worth. Only about a quarter of the typical pay package for all S&P 500 CEOs last year came as actual cash they could pocket.Whatever its composition, the chasm in pay between CEOs and the rank-and-file workers they oversee keeps widening. At half the companies in this year’s pay survey, it would take the worker at the middle of the company’s pay scale at least 186 years to make what their CEO did last year. That’s up from 166 a year earlier.At Walmart, for example, the company said its median associate made $25,335 in compensation last year. That means half its workers made more, and half made less.That’s up 21 per cent from $20,942 US a year earlier and came as the company’s average hourly wage for U.S. associates rose from $14.50 US in January 2021 to more than $17 currently. That increase was bigger than the raise CEO Doug McMillon got, on a percentage basis. But his 13.7 per cent raise netted him a total package valued at $25.7 million.Anger is growing over such an imbalance. Surveys suggest Americans across political parties see CEO pay as too high, and some investors are pushing back.Push to unionizeWorkers are trying to organize unions across the country, and the “Great Resignation” has emboldened millions to quit to find better jobs elsewhere. The U.S. government counted more than 4 million quits during April 2021 alone, the first time that happened. The monthly number has since topped 4.5 million twice.”That is going to add a huge cost to corporate bottom lines, to have these kind of turnover rates,” said Sarah Anderson, director of the global economy project at the progressive Institute for Policy Studies.”They should be thinking about what kind of message they’re sending to those people, about whether they’re really valued in their jobs,” Anderson said. “When the guy in the corner office is making several hundred if not thousands of times more, that’s sending a really demoralizing message.”Gains for CEO pay had been slowing in recent years, with the median rise easing from 8.5 per cent in 2017 to 4.1 per cent in 2019. It ticked back up to 5 per cent in 2020, which was a complicated year because the pandemic shut down the economy and profits at many companies tanked.For 2020, many companies rejiggered the intricate formulas they created to determine their CEOs’ pay. The tweaks made up for losses caused by the pandemic, something many boards said was an extraordinary event outside the CEO’s control.Then came 2021. Thanks to a reopened economy, super-low interest rates from the Federal Reserve and other factors, stock prices soared and the S&P 500 jumped nearly 27 per cent, setting records through the year. Earnings per share soared roughly 50 per cent.Throughout the year, CEOs had to navigate snarled supply chains and shortages of chips and other key materials that impacted businesses across industries, said Dan Laddin, a partner at Compensation Advisory Partners, a consulting firm that works with boards.”All this led to a desire to really reward” executives, said Kelly Malafis, also a partner at Compensation Advisory Partners, “because the financial performance was there, and the view was that management teams were exceptional in navigating the situation and delivering results.”Last year’s 17.1 per cent leap for median pay of S&P 500 CEOs was the biggest since a 23.9 per cent surge for 2010 compensation packages, according to the data analyzed by Equilar.Consider Marry Barra, CEO of General Motors. Her industry was particularly hard hit by the shortage of computer chips, which snarled auto production.Peter Kern, CEO of Expedia Group, had a total compensation package of $296 million.

The deaths of four miners in the West African nation of Burkina Faso has advocates calling for greater oversight of Canadian-owned mining companies operating overseas.Workers at the Perkoa Mine, which is owned by Vancouver-based Trevali Mining Corp., were trapped more than 500 metres below the surface on April 16 after heavy rain caused flash flooding, which breached two embankments outside the mine.Last week, the company said none of the eight missing workers were able to reach an underground refuge chamber. On Wednesday, Trevali reported the bodies of four workers have been found. Four more workers remain missing.Industry watchdogs have been disappointed with what they describe as the company’s apparent lack of capacity to respond to the flooding.Trevali and the Burkina Faso government have said water pumping equipment had to be imported from other countries, like Ghana and South Africa.

It is inevitable that if incomes fail to keep pace with a 6.8 per cent inflation rate, many Canadian wage earners are forced to scrimp. But economists who study financial behaviour have found that even those who can afford to keep spending are also looking for ways to cut back.Anyone who got a pay hike of less than 1.8 per cent this year actually took a more than five per cent cut in their “real” or after-inflation income. It means that those without savings, who spend what they earn, have no choice but to buy less — or go into debt.And retailers have begun to notice. Earlier this month, shares in U.S. chains Target and Walmart, and Canadian Tire in Canada, declined sharply as falling sales showed up in the bottom line, leading markets lower.Urge to economizeBut there are increasing signs it is not just those without savings who are looking for ways to spend less. Research on something called “the wealth effect” has shown that the many Canadians who have savings invested in real estate, stocks or cryptocurrency are not exempt from the urge to economize.”What we expect is that as wealth goes up, consumption would increase and as wealth declines, we would expect a decrease,” said Mark Kamstra, an economist who studies behavioural finance at York University’s Schulich School of Business in Toronto.Though originally based on economic ideas of how people should behave, the wealth effect actually happens in the real world, repeated studies have found.While at first some economists insisted the effect only applied to liquid investments, like stocks or bonds where returns could be extracted and spent, there is a growing body of research showing the notional value of your home — even if you have no plans to sell it and extract the value — can change your willingness to spend.When house prices are soaring at 20% a year, it’s hard for homeowners not to feel rich even if they have no plans to sell.

All participants at the Federal Reserve’s May 3-4 policy meeting backed a half-percentage-point rate increase to combat inflation they agreed had become a key threat to the economy’s performance and was at risk of racing higher without action by the U.S. central bank, minutes of the session showed on Wednesday.This month’s 50-basis-point hike in the Fed’s benchmark overnight interest rate was the first of that size in more than 20 years, and “most participants” judged that further hikes of that magnitude would “likely be appropriate” at the Fed’s policy meetings in June and July, according to the minutes.”All participants concurred that the U.S. economy was very strong, the labour market was extremely tight, and inflation was very high,” the minutes said, with risks of even faster inflation “skewed to the upside” given ongoing global supply problems, the Ukraine war, and continued coronavirus lockdowns in China.In that context, “participants agreed that the (Federal Open Market) Committee should expeditiously move the stance of monetary policy toward a neutral posture … They also noted that a restrictive stance of policy may well become appropriate.””Many participants” judged that getting rate hikes in the books now “would leave the Committee well positioned later this year to assess the effects of policy firming.”Highest inflation in 40 yearsU.S. stocks rose after the release of the report before reversing course. Futures traders eased up on their rate-hike bets, but are still solidly pricing in half-percentage-point increases in June and July, with quarter-percentage-point rises over the three remaining meetings in 2022.Bob Miller, head of Americas Fixed Income for investment giant BlackRock, said the minutes signaled that July would be a key pivot point for the Fed.With two more half-percentage-point hikes firmly in view, “the policy path after July will depend upon the trajectory of inflation and progress toward correcting the … imbalances in the labour market,” he wrote after the release of the minutes. “If those factors are improving, then the Fed gains some breathing room” to shift to fewer rate increases, but otherwise might be forced to lean harder on the economy.The minutes showed the Fed grappling with how best to navigate the economy towards lower inflation without causing a recession or pushing the unemployment rate substantially higher – a task “several participants” at the meeting this month said would prove challenging in the current environment.By the Fed’s preferred measure, inflation has been running at more than three times the central bank’s two per cent target.”A number” of Fed participants, however, said data had begun to indicate that inflation “may no longer be worsening.”But even they agreed it was “too early to be confident that inflation had peaked.”The economy remained strong, the minutes noted, with households in such good shape that Fed officials said it might be harder to get them to stop spending and take the pressure off of prices.Supply constraints on businesses “were still significant,” the minutes noted, hiring remained difficult, and “the ability of firms to meet demand continued to be limited,” a recipe for continued rising prices.With little certainty about when those conditions might ease, officials have begun laying out a broad range of positions around what might happen after the upcoming rate hikes, from an outright pause in hiking borrowing costs this fall to calls for an aggressive string of half-percentage-point increases at the September, November and December meetings.Inflation data has yet to show a convincing turn lower from the levels that have unnerved Fed officials and drawn comparisons with the inflation shocks of the 1970s and early 1980s.Some analysts, meanwhile, have raised their risks of recession, and investors in contracts linked to the federal funds rate have of late pared back their estimates of how high interest rates will rise.