Why the MLS fight isn’t over, behind Google’s China move – The Globe and Mail

Top Business Stories

Why the MLS fight isn’t over, behind Google’s China move

Plus, how economic prospects are looking up. And, what do you call it when economists get all the indicators wrong?

Michael Babad

Globe and Mail Update

Today’s top stories from Report on Business :

CRTC backs payments for signals

Canada’s conventional television networks should be able to negotiate payment for their signals, which are currently available for free to cable and satellite distributors, the federal regulator ruled today.

During a set of hearings in November, the broadcasters – CTV Inc., CBC and CanWest Global Communications Corp., which owns the Global network – argued again that in an environment of crumbling advertising revenues and fragmented audiences, they should have access to an additional revenue stream from the distributors that make money providing those signals to Canadian homes.

The result is not exactly what the broadcasters wanted: fee-for-carriage, as was proposed in the past, would have seen the federal regulator require distributors like Rogers Communications Inc. and Bell Canada to pay the conventional networks the same way they pay for the signals of specialty and pay television services. Value for signal, on the other hand, simply puts the CRTC’s endorsement behind a negotiation process.

Under the new system, the broadcasters would have the choice every three years to negotiate value for their signals. If they choose to do so, they give up regulatory protections that require cable and satellite companies to carry all the conventional networks and to place them at a preferential point on the dial (on channel 8 instead of 508, for example). That three-year option was proposed by CTV at the hearings in November. Read the story

Fight over real estate fees not over

The fight over the Multiple Listing Service run by Canada’s realtors isn’t over yet. The Canadian Real Estate Association said today it approved changes that would give home buyers and sellers more power over their transactions on MLS. Under the change, a consumer will now be able to pay an agent a flat fee to list on the service, where about nine out of 10 of all deals are done. Agents must now pass along a seller’s home phone number, if that’s what the seller wants, to a potential buyer if asked. The association said in a statement that it believes it has now addressed the issues raised by the Competition Bureau, which has taken the issue to the Competition Tribunal.

But the Competition Bureau immediately responded that it plans to continue to challenge the “anti-competitive rules that deny consumer choice and stifle competition” despite the CREA changes.

“There is nothing in these proposals that we haven’t seen before and they do not solve the problem,” Melanie Aitken, the Commissioner of Competition, said in a statement. “They are a step in the wrong direction. These amendments amount to a blank cheque allowing CREA and its members to create rules that could have even greater anti-competitive consequences.”

The bureau said CREA’s amendments do not remove “existing roadblocks to real estate agents who list properties on the MLS from offering innovative services and pricing options to consumers.” Read the story

Google reroutes Chinese users through Hong Kong

Google Inc. said today that it is redirecting users of its search engine for China through Hong Kong, but will maintain a sales presence in China and continue research and development work there. The move follows Google’s threat to pull out of China after what the search giant said were cyberattacks through Gmail on human rights activists. Google said this afternoon it stopped censoring search services on Google.cn, and that Google.com.hk offers uncensored searches in “simplified” Chinese.

The move by Google is seen as an attempt to get around the censorship issues in China while still operating some services in, and profiting from, the huge, lucrative market.

“Figuring out how to make good on our promise to stop censoring search on Google.cn has been hard,” senior vice-president David Drummond said on a blog. “We want as many people in the world as possible to have access to our services, including users in mainland China, yet the Chinese government has been crystal clear throughout our discussions that self-censorship is a non-negotiable legal requirement. We believe this new approach of providing uncensored search in simplified Chinese from Google.com.hk is a sensible solution to the challenges we’ve faced – it’s entirely legal and will meaningfully increase access to information for people in China. We very much hope that the Chinese government respects our decision, though we are well aware that it could at any time block access to our services.” Read the story

Melnyk sells Biovail stock

Eugene Melnyk has now severed most of his ties to Biovail Corp. (BVF-T16.270.160.99%) , ending his involvement with the pharmaceutical company he founded in the 1980s. Mr. Melnyk filed documents with the Securities and Exchange Commission saying he had sold 9.6 million shares and now holds just 232,000. Mr. Melnyk hasn’t been directly involved in Biovail management since leaving as chairman in 2007. But he did spark a proxy fight in 2008, complaining about the direction the company was taking and proposing a new board. While he lost that battle, he did in 2009 manage to get one director of his choosing on the board. Read the story

Recovery looks more robust

Canada’s economic prospects are brightening faster than many observers had projected, based on recent indicators.

Coming off a strong showing at the end of last year, BMO Nesbitt Burns deputy chief economist Douglas Porter notes that “the trend really gathered momentum since dawn broke in March.” Auto sales have surged, housing starts hit a February level of almost 200,000 annualized, Canada’s trade surplus reached its best level in a year, some 60,000 full-time jobs were created last month, and manufacturing, home and retail sales have all jumped.

“While some of these high-side surprises came fully equipped with a ‘yes, but’ caveat … there is simply no mistaking that growth and inflation have more underlying power than even the most strident optimist would have believed just a few short months ago,” Mr. Porter said in a research note, and BMO now projects the economy will expand by 4.7 per cent in the first quarter.

“The conventional wisdom has relentlessly been that this will be a sub-par recovery, and the only debate has been whether we are headed for a U- or W-shaped rebound,” Mr. Porter added, referring to a slower recovery denoted by a U, or the dreaded W, as its shape suggests.

“It looks more and more V-shaped by the day, and policy makers still have their foot firmly planted on the gas pedal,” he said.

Mr. Porter is not alone. In a note titled “Eh Canada!,” Scotiabank’s Aron Gampel noted that “virtually everything Canadian is shining in the post-Olympic ‘golden aura,’ with investors buying stocks, bonds, real estate, companies, and the currency.”

But recent indicators are just that. They can turn from month to month, and economists still expect bumps on the path to recovery. Mr. Gampel noted several factors that indicate “a more gradual appreciation in Canadian prospects.” The Canadian economy remains closely tied to the United States, and Canada faces a long run of competitive pressures, he said, citing the impact of a stronger dollar on exporters. As well, he said, trade hurdles grow “more frequent and larger during times of international stress.”

Mr. Porter, by the way, isn’t beyond poking a little fun at Canada’s economists, including himself, in referring to the fact that most of the economic indicators of late have come in better than expected: “What do you call it when Canadian economists underestimate every economic indicator for a month? No, no, no … not par for the course … a trend.

Related : Economists boost growth forecasts

Ratio of Canadian manufacturing real GDP to U.S. manufacturing output

Dollar still ‘albatross’ for manufacturers, Shenfeld says

Canadians shouldn’t be fooled into thinking that the strong dollar (CAD/USD-I0.98-0.002-0.16%) is no longer a serious issue for the manufacturing sector, the chief economist of CIBC World markets says.

“When it comes to looking at the implications of a strong Canadian dollar, there are lies, damn lies, and manufacturing statistics,” Avery Shenfeld said in a recent report. “Of late, we’ve seen claims from some quarters that a near-parity exchange rate is no longer a serious concern, drawing their conclusions from the recent sharp upturn in Canadian factory shipments and GDP. But both the basis used for that comparison, and the timing of that conclusion, make such a finding far too premature.”

Mr. Shenfeld cited reports last week that followed Statistics Canada’s latest measure of the factory sector, which showed manufacturing shipments rose 2.4 per cent in January to the highest level since November, 2008. It marked the fifth consecutive gain for the sector. While Mr. Shenfeld was referring specifically to media reports, Finance Minister Jim Flaherty also pegged the loonie’s level as “competitive” while Industry Minister Tony Clement said companies are adapting to a strong currency.

Mr. Shenfeld noted that most export manufacturers, or those competing with imports, hedge some or all of their short-term currency risks, and it can take up to two years to feel the full effect of translating foreign sales into “fewer Canadian dollars.” He also noted that the latest figures are being compared to depressed levels at the height of the recession in 2009.

“Nobody doubted that at any level of the Canadian dollar, we would see what would look like a steep climb after a nearly 30-per-cent nosedive in real factory shipments,” he wrote. “Those impressed by the recovery to date need a reality check. Adjusted for inflation, manufacturing GDP and shipments are sitting at only 1997-98 levels, and nearly 20 per cent below the pre-recession peak. The effect of the strong Canadian dollar will show up in the extent to which the factory sector can make up that vast remaining ground.”

Mr. Shenfeld said there is a fair lag for the impact to be felt on Canada’s share of the sector’s activity in North America, adding in an interview that “it could take a couple of years before you have a sense of how much damage has been done to our manufacturing competitiveness.”

Posted via web from Toronto Real Estate News | Blog


About Tariq Sultan
Dear Readers, I am a dedicated Toronto, Ontario based real estate professional who has been successfully meeting and exceeding the needs of his clients for past several years. I am actively involved in the insurance, financing, and mortgage industry. Real estate is not only my career – it is my passion. I strive to continuously provide my clients with exceptional service to ensure they are fully satisfied when it comes to their real estate needs. For any real estate related inquires contact me today, I will be happy to assist you. Best wishes, Tariq Sultan

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